“Stuck on the top 20-30 schools” is an inaccurate characterization of Prime Meridian’s posting history. There are certainly posters who have that mentality (and indeed with even a narrower slice of what are “good” schools) but it isn’t him / her.
First, @Pizzagirl , why would you use quote marks for me when I never said that, or used the words “stuck on”, at all. That is quite egregious, which as a lawyer you should know. Second, it totally mischaracterizes the comment. I said that based on other comments I read, I took her definition of Podunk to be not in the top 30 or so, and invited her to clarify. They were the one that used the term “Podunk” without definition.
Now, this is getting off track from whether tuition as a “list price” means anything any longer…
MODERATOR’S NOTE:
Let’s keep the conversation on topic, please.
Another well intentioned (Ivy Tower) idea that is just ignorant and naive.
The fact of the matter is that most kids attend their local college, so who in the heck cares what data the Ivies and this ilk publish. And more importantly, why should Congress care enough to enact another federal law? Just to make the top privates “look” good?
Lets look at the ideas:
Sure, why not? But then again, Why? Does it matter to me if Harvard/Williams spends $100k or $500k educating my student? What is the public policy value in mandating such an item. (And that, of course, assumes that it could be calculated reasonably well for a major research Uni. How many more cost accountants would they have to hire to comply wit the federal mandate?)
Again, sure, why not, but looking at a range from $0-$70k is worthless data point to me and my family.
Same as above.
Again, sure, but looking at a range from $0-$70k is worthless data point to me and my family.
Ditto.
Except that this proposal will do nothing to correct that “assumption.”
Amherst (and Williams and HYPS et al; there are what, ~50* schools that a need blind and also meed ‘full’ need?) already advertises that it can be zero out-of-pocket to low income kids. How will a new federal law change that?
So we need do change federal law and regs for ~50 schools, nearly all of which are the richest in the world? Why don’t they just spend a few more of their own dollars on outreach?
btw: a LOT of kids do not want a LAC experience, so Amherst is out at any price. Both of my kids turned up their noses a college that was smaller than their HS.
Sure, and since H is so freakin’ rich, let H use some more of that gazillion dollar endowment it has on outreach (aka advertising).
My apologies.
What an education costs the institution can be an indication of quality, scale or inefficiency. There is no way to know which. If institution A has a cost of 30,000 and a net price to me of 50,000 and institution B has a cost of 70,000 and a net price to me of 50,000, what does that tell me about the relative value to me? Not much.
Right, and just like student/faculty ratio, these numbers could be gamed. I mean, we could find out total expenditures pretty quickly, but how then do you divide them up between undergrads and grad students? Between FT students and PT students? Wouldn’t schools allocate in the way that would make them look best to those groups that care the most?
There are cross-subsidies everywhere.
Seriously? I’m shocked, shocked!… 
Families paying the sticker tuition price are just being subsidized less than those paying some amount less than full tuition - at the privates in the article. OOS publics are a different kettle of fish.
The unit cost a university spends on its students is an imperfect, but reasonably good measure of education quality. The reason for this is that the single most substantial operating cost of a typical university is the salary to its faculty and staffs. This number often runs between 55% to 65%. In addition, for most parts, there is little economy of scale in the education business given the room size constraints, etc. The possible inefficiency is also rather mild because most universities need to balance their budgets and are periodically under pressure to trim fat and bring the costs in line with the revenue.
Therefore, when a university spends a lot of money on each of their students, it generally implies that they pay their faculty members better and/or they make their class sizes smaller. As most college students will tell you, they like both such attributes.
When the unit cost is higher than the effective tuition (average tuition paid), the gap is usually filled by endowment earnings. Therefore, it is usually the case that well endowed universities can afford to spend more on each student and collect less tuition on each student. Whether this is a good deal for students, I think it is case by case. There are students who care less about education quality from the faculty and care more about whether the university’s football team is doing well. In contrast, there are other students who care more about the quality of education quality and appreciate the subsidies by the university’s endowment. So when they graduate and turn out to be successful, they are generous in giving back.
When universities have little endowment and receive little state supports (state fundings to state universities today are mostly around 30% of the operating budget or less), these universities are by construction tuition-driven. That is, effective tuition needs to be close to unit cost. This gives universities few degrees of freedom on its tuition policies. State universities often need to take in more out-of-state or international students who pay full out-of-state tuition. In general, out-of-state tuition is higher than unit cost because the sum of in-state tuition and state support is lower than unit cost; that is, state universities are currently “losing money” on its in-state students.
Personally, I think the kind of disclosures the article tries to promote are not particularly useful. If a student or parent cannot or does not dig out the likely cost and future benefits of attending each college the student wants to apply in this google era, I think it is quite unlikely that they can get away anything meaningful from those numbers/ranges proposed to be disclosed.
With all due respect, I challenge you to find one study which asks college students – really high schools students, since this is the focus of the article being discussed – if they have one iota of a care about faculty pay. I’d be willing to bet that students would easily approve a 10% cut in faculty pay if it reduced tuition by a similar amount.
btw: , NYC is the highest COL in the land, so the higher faculty pay at NYU (relative to other colleges) actually makes it a better college?
Yeah, they probably do care about quality to a certain extent, even if it is absolutely unmeasurable. Nevertheless, high paid faculty is not a proxy for quality. Heck, is there any studies that even link to two?
True, but possibly quite misleading. The key phrase is “and staff.” There’s a huge amount of administrative bloat in many colleges and universities. A high level of spending on faculty and staff salaries doesn’t necessarily mean you’re getting the best faculty. It could mean you’re spending on layers of excess administration and fat administrative salaries that deliver little real educational value to students. Or it could mean the school is investing heavily in costly side services that, while they may make the college experience more fun and enjoyable to students, don’t enhance education per se.
Schools also vary considerably in their faculty leave policies and in teaching assignments. Some schools have extremely generous leave policies and/or allow star faculty to teach only graduate-level courses. While such policies may allow those schools to attract star faculty—especially star faculty who don’t value teaching or don’t like to teach undergrads—they don’t do anything to enhance the undergraduate experience. Then, too, you need to consider what fraction of faculty compensation is spent on medical, law, and MBA faculty who don’t teach undergrads at all; these are typically the highest faculty salaries, and could represent a very significant fraction of total faculty compensation.
Once you get beyond faculty, economies of scale are huge. You need to pay the president and the general counsel whether the school has 1,200 students or 50,000. A 10 million volume library costs pretty much the same whether it serves 1,200 students or 50,000.
@bluebayou: “I’d be willing to bet that students would easily approve a 10% cut in faculty pay if it reduced tuition by a similar amount.”
First, a 10% faculty pay cut will lead to about 4% (5% if you also cut their benefits) of tuition reduction. Second, the student response will be depending on how you frame the question, just like any survey. If you ask students whether they will trade 4% tuition reduction for 10% faculty pay cut conditional upon students will still have the same set of faculty, there could be quite many yes votes. But if you frame the question in a more realistic way: whether they are willing to trade 4% tuition reduction for 10% faculty pay cut such that many of their marketable (presumably better) faculty members will leave the university. Then, I am not quite sure about the result.
As a matter of fact, the business of university education is not a monopoly. Students have plenty of opportunities to choose it from many universities that have different levels of cost structure. If a student does not like how much Harvard pay its faculty, he/she can always choose a university that pays its faculty less. But as we can see, the demand for a Harvard education is simply off the chart.
“NYC is the highest COL in the land, so the higher faculty pay at NYU (relative to other colleges) actually makes it a better college?”
Cost of living is a factor of faculty pay, but it is, at best, a secondary factor. NYU (same thing happens in CUNY) does not pay particularly well relative to its peer institutions. University of California system and California State University system are notoriously known to underpay their faculty relative to their peer institutions even if the state of California has very high cost of living (we call it a location discount). The reason for this negative relationship between pay and cost of living is that these locations (mostly urban locations) are easier for the spouse of the faculty member to find a reasonably good job. It is often the case that the total income of the household really matters.
“Yeah, they probably do care about quality to a certain extent, even if it is absolutely unmeasurable. Nevertheless, high paid faculty is not a proxy for quality. Heck, is there any studies that even link to two?”
Like all other social variables, education quality is difficulty to measure. There is a long debate about whether faculty pay ties to education quality. I am no expert in education research, although I am an educator. So I am not in a position to convince anyone. But this is my belief (which you can surely disagree): high faculty pay cannot guarantee quality education, but quality education will not happen without enough faculty pay.
I neither agree nor disagree. (Since it is impossible to measure “education quality,” its kinda moot.)
But I might point out that, and major research Unis, the highest faculty pay tends to go to the top researchers, which doesn’t have much to do with undergraduate teaching/education.
Not to mention that the top UC campuses offer academic prestige, which always looks good on a CV. (And they do offer faculty housing to many; once that cost is taken care of, food and utilities are cheaper than in the NE…)
Regardless, doesn’t this kinda disprove your point, unless you believe that UC education quality is ‘lesser’ – however defined – than that of other similar Unis?
@bclintonk: “A high level of spending on faculty and staff salaries doesn’t necessarily mean you’re getting the best faculty. It could mean you’re spending on layers of excess administration and fat administrative salaries that deliver little real educational value to students.”
In the business of higher education, employees of a university is often grouped into 3 main categories for budgeting purpose: faculty, staff, administrators. The 55%-65% ball park number only include the first two categories. I also understand the sentiment of excess administration; after all, I am a union member of a faculty union. But realistically, the pay to administrators is really a minor issue when we are talking about the cost structure of an entire university because the number of faculty and staff (often in thousands) is much higher than the number of administrators. In many universities, the pay to administrators is around 2-3%. How much cut, economy of scale, and efficiency improvement that one can get out of this small fraction when we are talking about the entire university’s cost structure?
“star faculty who don’t value teaching or don’t like to teach undergrads”
In general, this is quite true for those universities (think those state research universities) whose class size is rather large and the students to faculty ratio is high. Star faculty tends to be picky and prefer more interaction with students in the classroom. They can have such teaching environment in graduate classes so you see the stylized fact. But at the same time, at some well endowed private universities, they are quite able to entice star faculty to teach at the undergraduate level because the class size is smaller and the faculty is able to get more satisfactory interaction with those smart undergraduate students. All of these cost a lot of money. This is one of the reasons whey high ranked Ivy league universities has a unit cost of around $100,000, whereas many state research universities has a unit cost of around $30,000-$40,000.
Again, money cannot buy you everything. But without enough money, you then need to let quite a few things go.
I’m not sure where you’re getting your 55-65% “ball park number.” Using federal Department of Education IPEDS data, the AAUP calculates that instructional salaries represent only 31% of the expenditures of public colleges and universities.
https://www.aaup.org/sites/default/files/files/2015salarysurvey/Fig2.pdf
Although private colleges and universities use somewhat different accounting methods. AAUP calculates that the figure is similar for private schools. When I’m talking about administrative bloat, I don’t mean only top administrators. I’m talking about all the bells and whistles of non-instructional serices and programs that colleges have added, largely in response to student demand and in order to keep pace with their peer institutions. Faculty salaries have been essentially flat for the last decade or more. The run-up in costs has been in non-instructional personnel, services, and programs. Yes, technically these may be “staff” jobs rather than “administrative” positions, but whatever you call it, the money’s not going to faculty.
It could also mean your financial aid gets processed quickly, someone answers the phone and answers your questions/solves your problems in offices of admissions, FA, comptroller, registrar, etc, your sick or in-crisis student gets prompt attention, campus crime is rare because you have sufficient security, class registration is efficient, classroom and dorm facilities get cleaned regularly, research programs conform to federal requirements and thus are eligible for more funding, etc.
I don’t think most of that is just fun or enjoyable, but necessary when anywhere from 1-60K students are living and learning there.
@bclintonk: The number that I stated includes salary and benefits to faculty and staffs (excluding administrators). Take myself as an example, the benefits that I receive is around 30% of my base salary. This range is from my experience with 4 different state universities that I have served. I do not know how AAUP defines its instructional salary.
@bluebayou: “Not to mention that the top UC campuses offer academic prestige, which always looks good on a CV. (And they do offer faculty housing to many; once that cost is taken care of, food and utilities are cheaper than in the NE…)…Regardless, doesn’t this kinda disprove your point, unless you believe that UC education quality is ‘lesser’ – however defined – than that of other similar Unis?”
Since you brought up UC, let us take UC Berkeley as an example. Berkeley is of course not a lesser university relative to other similar universities. It is a very fine university. But if we compare Berkeley today to Berkeley, say, 20 or 30 years ago, then I am not quite sure. In good old days, Berkeley was well funded by the state and it served the state residents well by taking in many in-state students. Today, the state funding is cut by half in terms of percentage of state funding relative to the overall operating budget. So, what happened? Berkeley was forced to take in far more students who pay out-of-state tuition so that Berkeley can make some money and use that money to fill the gap between its unit cost and the sum of in-state tuition and state support. This makes state residents very unhappy because fewer local kids can get in Berkeley. It also lowers the overall graduation rate for Berkeley than otherwise would be. Note that the overall graduation rate is around 90%. International students have a graduation rate of about 82%. If someone know about the graduation rate for domestic, out-of-state students, I would love to know.
Back to the original news article:
I added numbers to the 5 items, for emphasis.
The author of the article works at Harvard and was formerly a trustee at Amherst & Princeton, i.e, her associations are only with highly selective, mega-endowed colleges.
The overwhelming vast majority of students who apply in each application round are not Harvard/Amherst/Princeton material, nor will they not be struggling to make a decision on whether to accept the $10k EFC offer from Harvard vs the 10k EFC offer from directional State U.
What a family is expected to pay is already available from the colleges’ NPC. And there are already plenty of 3rd party providers that publish annual lists of “Best Value Colleges”.
If this writer wants Congress to mandate reporting of these numbers, then I’ll add one more number colleges should report, to shed light on, as she states, “the rising cost of college”:
6) how much the college earns from endowment each year, per student.
That’ll raise some interesting questions on why a school with a $37.6 billion endowment charges anything at all for tuition. At a 5% annual return, a $37.6 billion investment can generate enough tax-free income to cover $100k/ per year for each of its 21,000 undergrad + grad students.
When ungodly rich colleges like harvard set an unnecessarily high sticker price, other colleges mimic them to enact “vanity pricing”
An example of deliberate vanity pricing: NYT article about GWU raising its prices to project a sense of luxury:
http://www.nytimes.com/2015/02/08/education/edlife/how-to-raise-a-universitys-profile-pricing-and-packaging.html