Swarthmore professor's essay: "Could college cost less?"

<p>Thanks, Interesteddad, it really lays out the differences. I suppose I don't know enough about colleges such as Muhlenberg--which must be the majority of colleges.</p>

<p>Wisteria:</p>

<p>Your list of cost saving areas is very comprehensive. I think you've identified most of the areas where the luxury colleges spend money.</p>

<p>One minor quibble. Swarthmore does have a few part-time faculty (33 if I recall). These are sprinkled here and there in areas that make sense -- language instructors, music instructors, etc. In some cases, faculty are shared with Bryn Mawr in areas where there wouldn't be enough demand at just one of the schools to justify an additional full-time slot.</p>

<p>BTW, it's easy to say that the luxury schools could "cut back" in some areas and that is probably true. For example, I know that Swarthmore spends a fortune planting and tending to the gardens that are everywhere you look. Every plant on the campus has a placard with its species name, for cryin' out loud. But, that is all funded from a specific endowment for the Arboretum given by a Scott Paper Company heir decades ago. The money's there and it can't be spent on anything else, so what can you do? Just enjoy the pretty campus and watch all the California kids suffer from hayfever.</p>

<p>Likewise on the $3750 summer research grants. I can't even count them. Most of these are also tied to specific named endowments, so they really aren't "discretionary".</p>

<p>The Debate Team is known to throw the best parties on campus. Yeah. The Debate Team (as my daughter says, "Only at Swarthmore...."). Why? Yep. Dedicated endowment.</p>

<p>Marite:</p>

<p>And the thing is, Muhlenberg is a very good school. Probably in the top 25% of US colleges and universities. You certainly don't have to spend like the Rockefellers to provide an excellent education. If anything, I think the Muhlenbergs may be making a mistake in thinking they have to match the frills. The market may work for efficiently if there were a much more transparent price scale. That's really what merit aid is all about -- pure price competion. But, it's hidden behind a fictcious sticker price.</p>

<p>The endowment issue, and the spending that results, is key to understanding why admissions is so insane at a few dozen schools while most colleges and universities are lucky to fill their freshman classes. Take Swarthmore: they charge $26,000 (on average) for a $68,000 product. Of course customers line up around the block. I mean, if you can get in, who in their right mind would pay Muhlenberg's average $25,000 fee when they can go to Swarthmore for an average of $26,000? In effect, Swarthmore is giving a $28,000 merit scholarship to every student paying full price and a $40,000 merit scholarship to every student (on average). Do that for many decades (or even centuries in a few cases) and, voila! Prestige. </p>

<p>Hence, the differences in acceptance rates and yields between schools when the average net price is quite similar.</p>

<p>Take the top of the USNEWs university list and the top of the USNEWs LAC list and you see nothing but schools with monster per student endowments.</p>

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One minor quibble. Swarthmore does have a few part-time faculty (33 if I recall). These are sprinkled here and there in areas that make sense -- language instructors, music instructors, etc. In some cases, faculty are shared with Bryn Mawr in areas where there wouldn't be enough demand at just one of the schools to justify an additional full-time slot.

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<p>That makes sense. I was sort of puzzled when I read the following table in "About Swarthmore," which seemed to imply that Swarthmore didn't have any part-time faculty, when you would expect that a small college might need a few part-timers in very specialized slots. Sharing with Bryn Mawr and/or Haverford makes good sense. </p>

<p>Faculty</p>

<p>Full-time Tenured and Tenure-track Faculty (2003-2004): 163</p>

<p>Faculty With Ph.D.s or Terimal Degrees: 158 (97%)</p>

<p>Women 63 39%
Men 100 61%
Total full time 163<br>
Minority 25 15%
Teaching Assistants 0 </p>

<p><a href="http://www.swarthmore.edu/about/quick_facts.html%5B/url%5D"&gt;http://www.swarthmore.edu/about/quick_facts.html&lt;/a&gt;&lt;/p>

<p>And yes, those dedicated endowments do really restrict the extent to which funds can be directed in ways that might be more highly valued by the students. An expensively maintained 400-acre arboretum is all very nice, but it's not clear to me that students might not be happier with a little bit less in the way of arboretum amenities and perhaps a correspondingly little bit less in the way of student loans!</p>

<p>But the real point of all the endowment spending is that, in some very real sense, the "customers" of the college are not just the current students. The customers are also the donors who had a vision of something they wanted to contribute to the future generations of students, something that perhaps those future generations themselves might not value highly enough to be willing to pay for themselves, like the arboretum or those debate team parties! And accounting for all those restricted funds is a major headache, which imposes costs in and of itself. But hey, it's the donors' money and Swarthmore didn't have to agree to take it unless they were willing to accept the attached strings.</p>

<p>Interesteddad:</p>

<p>Yes, I know a bit about Muhlenberg's reputation. That was what threw me off when comparing the per student spending with Swat.</p>

<p>Wisteria:</p>

<p>Here's the total faculty breakdown at Swat for 2004-5:</p>

<p>Tenured and Tenure-track Faculty 163
Temporary Faculty 10
Full-Time Leave Replacements 17
Part-Time Faculty (including Leave Replacements) 33
Early Retirees 10
Instructional Staff 60</p>

<p>The full-time temporary faculty and full-time leave replacements are in some cases auditioning or filling a slot when somebody dies and there isn't time to complete a tenure-track faculty search. </p>

<p>In other cases, they are endowed visiting professor positions. For example, this year Herbert Kohl (urban education guru) is the Lang Visiting Professor ("outstanding social scientists, political leaders, or social activists whose careers demonstrate sustained engagement with major issues and actions of social justice, civil liberties, human rights, and democracy.")</p>

<p>In other cases, they are involved in a new program that may or may not become permanent after a trial period (usually associated with short-term grant funding) runs its course or for a new program that the college is committed to regardless (like the new Middle Eastern Studies/Arabic program), but has not yet put the funding for endowed tenured faculty chairs in place. </p>

<p>The instructional staff category includes all the athletic coaches, minority post-doc positions that the college endows to groom minority faculty, musical instrument instructors, language lab instructors, studio art instructors, dance instructors, and the like.</p>

<p>Marite: The per student endowments fall off a cliff once you get beyond the first couple dozen schools. That's why the admissions "scene" among the College Confidential crowd presents such a distorted picture.</p>

<p>"One of the values I hope the adults running the college transmit to my children is honesty and transparency."</p>

<p>Hear, hear!</p>

<p>That budget breakdown for the two schools is very interesting -could you find the same thing for Wellesley and Oberlin?</p>

<p>Here's Oberlin's, again with everything expressed on "per student" basis. Their per student revenue is about average for the elite LACs I've looked at. Their per student spending is on the low side, in part a function of the large enrollment numbers.</p>

<p>Oberlin 2,883 students</p>

<p>Tuition 28,895
Financial aid (12,113)
Net Tuition 16,781</p>

<p>Room/Board 5,457</p>

<p>Tot Student Revenue 22,239</p>

<p>Total Spending 40,135</p>

<p>Endowment 199,965
End Spending 12,102</p>

<p>I haven't looked at Wellesley. They have a huge endowment offset by a fairly large student body. There are admissions realities at women's colleges that tend to drive financial aid discounting higher and I would expect Wellesley to follow that trend. I haven't looked at Wesleyan either, which is what I think may be what you meant to ask about. Wesleyan's numbers are also impacted by a relatively large enrollment.</p>

<p>I have looked at Smith, which should be pretty similar to Wellesley:</p>

<p>Smith 2,738 students</p>

<p>Tuition 31,845
Financial aid (14,046)
Net Tuition 17,799</p>

<p>Room/Board 9,691</p>

<p>Tot Student Revenue 27,490</p>

<p>Total Spending 57,567</p>

<p>Endowment 337,642
End Spending 17,890</p>

<p>Actually I was asking about Wellesley, b/c their endowment is much larger than Smith's. I'm assuming the much larger endowment would provide more opportunities, and I was curious to see how spending would compare to Swarthmore. I'm taking time off from school, and looking at LACs I could realistically gain transfer admittance to (with 3.35 GPA thanks to mono <em>groan</em>)</p>

<p>Here's Wellesley. They are at the very top end in total tuition revenue, although this number maybe overstated just a tad because they lump things like bookstore revenue into the room/board line item. This is the highest per student spending I've seen. It's also one of the highest endowment spending levels as a percentage of endowment I've seen.</p>

<p>Wellesley 2,176 students</p>

<p>Tuition 28,919
Financial aid (11,780)
Net Tuition 17,139</p>

<p>Room/Board 10,213</p>

<p>Tot Student Revenue 27,352</p>

<p>Total Spending 71,738 (see note)</p>

<p>Endowment 542,274
End Spending 27,408</p>

<p>Note: I think this figure is overstated by $6.4 million in capital spending paid for with a refinance of existing debt and showing up as an operating expense instead of a capital expense. Deducting that, the per student would be $68,700 -- still the highest I've seen. This is closer to the figure that the college gives for per student spending in their summary text. For all other colleges I've looked at the, the figure in my spreadsheet agrees with the figure in the summary text, so there is something overstating the per student operating spending in the spreadsheet numbers above. Suffice to say that Wellesley's spending and student revenues are at very top of the scale. This confirms my belief that, if Wellesley were coed, it would be the most selective, highest-ranked LAC in the country.</p>

<p>Larger endowment could provide more opportunities, or could not - depends totally on how you spend it. Per student spending is suspect as well - high spending could simply reflect in some cases failure to take advantage of rational economies of scale (this is particularly true in science areas or even in food services or athletics). Occidental has less than a third the endowment of a Williams, but spends much more of it on student aid in order to get a much more diverse student body. There are learning opportunities that come with a more diverse student body that are not made up for by higher spending per student in other areas. That's just one example, and I can think of a dozen others. Berea "spends its opportunities" by providing free tuition to low-income students. It gets NO student revenue on the tuition line.</p>

<p>It's not so readily transparent.</p>

<p>Technically, financial aid is not included in spending because it is a reduction in revenue. So, to get a complete picture of a school, you have to look at both the per student revenue and the per student spending. In other words, Berea charges less for a less expensive product -- which is a perfectly valid approach. I agree that there are intangible benefits to a more diverse student body, just like there are intangible benefits to a student body with outstanding academic and extracurricular qualifications.</p>

<p>Here are Berea's numbers (as always, expressed on a per student basis). Berea provides a $37k product for $4.2k per student. Not the largest "spread", but very impressive, especially considering that the $37k spending is higher than Occidental's and within 10% of Oberlins.</p>

<p>Berea 1,514 students</p>

<p>Tuition 664
Financial aid 0
Net Tuition 664</p>

<p>Room/Board 3,621</p>

<p>Tot Student Revenue 4,285</p>

<p>Total Spending 37,101</p>

<p>Endowment 525,074
End Spending 21,983</p>

<p>BTW, Occidental per student financial aid discounts are only $1,000 more than Williams and just slightly lower than Swarthmore's and a ton lower than Smith's, including some significant merit aid discounting to rich kids at Occidental.</p>

<p>The reason that Occidental's per student revenues are lower than Swarthmore's and Williams' is that they have a slightly lower sticker price. I also think they have a lower percentage of on-campus housing which reduces the per student revenues a bit.</p>

<p>But you have to look at much more. Berea's per student endowment is virtually the SAME as Wellesley's. They just have made a decision to spend it differently. (They also have less in the way of economies of scale.) The very term "less expensive product" is misleading - if I overspend on my "factors of production", my product costs more, but there is no obvious or necessary relationship to the quality of the product. And I think that is precisely what one finds with schools (especially LACs) with large endowments, whether Smith, Wellesley, Swarthmore, Pomona. The additional quality differences made by increasing spending on the "factors of production" shrink very quickly in the upper reaches, and tell one nothing about whether they are spending on "the right things". (It would be like arguing that Smith is the number one LAC in the country because it has the largest number of books in its library, which it does. If you are not reading those extra 300,000 books, it is wholly irrelevant, except that spending to maintain the space necessary for those extra 300,000 books might actually detract from "educational quality".)</p>

<p>I have no reason to believe that Berea's factors of production are any more efficient than any other school's. I've never seen any suggestion that Williams, Smith, Amherst, Wellesley, and Swarthmore are mis-managed.</p>

<p>It is far more likely that Berea just spends less. For example, would they write the huge check for your daughter's study abroad program or her summer internship next year? </p>

<p>The answer is no. The maximum funding for study abroad at Berea (and the max only applies to a family with full financial need) is $8000. That wouldn't put a dent in the $21,000 per semester price tag on Smith's Europe programs. Nor would it put a dent in Berea's recommend S.I.T. program in Ghana at $16,500 per semester.</p>

<p>Now, whether a $21,000 semester abroad is worthwhile spending or an "inefficient factor of production" is in the eye of the beholder.</p>

<p>Interesteddad said,</p>

<p>"... $8000. That wouldn't put a dent in the $21,000 per semester price tag on Smith's Europe programs. Nor would it put a dent in Berea's recommend S.I.T. program in Ghana at $16,500 per semester."</p>

<p>As someone else pointed out, different schools choose to go out on a financial limb for different things; for Williams, it might be need-blind admissions for foreign students; for Wesleyan, it might be fully-equipped, NSF funded labs that run the whole year round. Perhaps, Berea thinks that discounting half the price of a semester in Ghana is pretty darned generous. Any college, even a highly-endowed one, that doesn't exercise some prudence with respect to its priorities, won't have that endowment for very long.</p>

<p>I have no problem with Berea's priorities. I think what they do is amazing.</p>

<p>I am, however, disagreeing with Mini's implication that Berea is offering the same quality product for less money because the have more efficient "factors of production". I'm suggesting that paying for 40% or more of your students to take part in an expensive study abroad program is not merely a efficiency issue, but is, indeed a qualitative difference. I don't feel like tracking down the numbers, but I'm guessing that very few Berea students do a semester abroad.</p>

<p>If I were Berea, I'd say "forget about it", too. After all, they are running a tuition free school specifically targeted at low-income Appalachian kids. Asking them to pick up the tab for study abroad on top of free tuition is a bit much, but that's what some of Mini's "less efficient factors of production" schools do for their full scholarship students. </p>

<p>I think that we should not dismiss what Smith and many of the expensive schools do. If you are on financial aid, you can go do that expensive study abroad program without one additional cent of expense. I don't know Smith's exact policy, but Swarthmore not only covers the cost of the program for all students, but writes you a check to cover the cost of airfare to get there (which is not included in most study abroad programs). I imagine that the same policy in effect at most of the high price/expensive product schools.</p>

<p>Both approaches -- no frills and first-class -- are valid approaches to running an airline or a college.</p>

<p>Well, perhaps you have a point; paying the airfare for every student studying abroad, may indeed be a priority for Swarthmore. Now, if Swat would only make the rest of the school tuition free, there might be some basis for comparison with Berea!</p>

<p>"I am, however, disagreeing with Mini's implication that Berea is offering the same quality product for less money because the have more efficient "factors of production".</p>

<p>I wasn't suggesting anything of the kind. I was stating that spending per student (or endowment per student) is not necessarily an indicator of quality, especially if spending per student is inflated by 1) not taking advantage of economies of scale when appropriate; or 2) not spending efficiently or in those places that substantially impact quality.</p>

<p>Our alma mater's alumni association (as you are aware) has just substantially increased its costs by splitting the alumni magazine in two, one part articles - one class notes, and mailing them separately. Not only has the magazine (in my judgment) declined in quality as a result, but costs have risen because a larger percentage goes to postage.</p>

<p>(To answer your specific question - Smith ended its policy of "free airfare" for all, and instead made the airfares part of financial aid awards, hence enhancing the opportunities for low-income students to go abroad, without affecting the ability of full-fare customers to do so one iota. The result? They are looking to increase the size of the program in Italy this year, because more students are taking the two-year pre-reqs required. The program is a "money-loser" for Smith. Go figure)</p>

<p>
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I wasn't suggesting anything of the kind. I was stating that spending per student (or endowment per student) is not necessarily an indicator of quality, especially if spending per student is inflated by 1) not taking advantage of economies of scale when appropriate; or 2) not spending efficiently or in those places that substantially impact quality.

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<p>Another reason that spending per student might not be an indicator of quality is that it's possible to deliver the same quality education a lot less inexpensively in a lower cost of living area. Real estate prices (and thus faculty/staff salaries) are a lot higher in Princeton, NJ than in Ithaca, NY (or Berea, KY, for that matter.)</p>