WSJ: Colleges Spend Like There’s No Tomorrow. ‘These Places Are Just Devouring Money.’

Parents Forum
41

We have such public colleges, of course. Not the kind mentioned around here much, but the kind that are serving many, many families.

But there are other families willing and able to pay more to get something different.

And it is theoretically possible they could only do so at private colleges. Then all the families willing and able to pay more would go private, and the only students at publics would be from families unwilling or unable to pay more.

But, long ago, the whole “land grant” movement was based on the premise that was not a good outcome, that at least some public colleges could and should compete to provide the sorts of colleges that these families wanted. And the end result was an extremely robust post-secondary education system.

Which is not to say that proves it was a good idea, either in general or in all details. But I do think it is worth noting that unless we banned private colleges, then stopping public colleges from trying to compete with private colleges would very likely result in a much starker difference between the sorts of colleges people attended depending on their families’ respective willingness and ability to pay.

2 Likes
42

Yeah, the positive list is Idaho, Texas, Utah, Delaware, Georgia, and Colorado. I think this is all public enrollment, not just flagship.

I believe these are mostly states with very high relative young adult population increases generally. Not sure about Delaware, although I think it is better than average from what I recall. Generally I am sure it isn’t a perfect correlation, but probably a pretty high one.

So that doesn’t mean there is nothing else going on too. It just means we’d have to control for other factors leading to young adult population increases.

1 Like
43

Making this thread obsolete, as well as the national debate on affordability & student loan crisis?

44

I am doing this between patients quickly but yes Michigan just raised their Go Blue initiative from $65,000 to $75,000 threshold for a student to go for free.

So that’s good. Plus they do raise the amount of financial aid per student to help cover the differences when they do raise tuition.

They have 49% OOS with a family avg of $164,000 was a figure I have seen with huge endowments. The incentive to lower or keep prices down just isn’t there but they do help their students to no end. It’s an in demand school and always has been.

45

I hear what you’re saying, but remember that Michigan has a plethora of world class faculty and it must compete with other top schools to maintain. Purdue doesn’t have nearly the depth and breadth of excellence that is to be found at Michigan. Michigan is a much more expensive school to operate.

1 Like
46

I think this thread could be useful to the extent that once we look at actual data and not so much how the WSJ framed that data, then we can collectively get insights about what is really happening in terms of affordability.

Like, I think it is useful information to know that over the last couple decades, the cost of attendance has either stayed about the same or indeed gone down at many of these colleges . . . in terms of percentage of income for upper-middle-class and upper-class families. That is because the above-inflation income increases of such households has been higher than the above-inflation cost of attendance increases of such colleges.

I think it is also useful to know that drawing a straight line through this trend isn’t helpful. There is instead a very notable curve, with some notable inflection points, and the recent average cost of attendance trend has been down in inflation-adjusted terms. And again, down even more when you then also adjust for the above-inflation income growth of upper-middle-class and upper-class families.

But this doesn’t mean there are no issues to see here, because many families are not upper-middle-class or upper-class. Moreover, average or median trends can obscure important variations between different states and indeed regions within states.

For example, it is not at all a trivial point for many families that transportation is part of cost of attendance, and in these charts that component of cost of attendance is de facto reported on an average/typical basis. But some families have much higher or lower transportation costs than average.

And so on.

So, is there a massive and ongoing affordability crisis for, say, the typical demographic profile of WSJ readers? Eh, not so sure about that. Indeed, whether they realize this or not, college affordability has been getting notably better for many such households in the last 6+ years.

But are there ongoing affordability crises for some demographics less likely to be WSJ readers? I think that depends on the state and locality in question, but I would agree way too often there is.

47

I am there with ya. If you ever follow me on the Michigan threads I defend this also but I like discussion and always willing to learn from others.

48

I haven’t looked at the budget reports, but just curious: what percent of the budget goes towards supporting Michigan’s sports programs?

49

Asking the wrong person @sushiritto… He’s the stat man… Any clue?

50

The academic market is very tough. Those seeking faculty positions don’t have a lot of choice, and most will take what they can get. As a result, there are excellent faculty members at a very wide range of schools. These schools don’t have to compete for more than a handful of extremely well known academicians.

Are you saying Michigan pays their faculty a lot more than other schools do?

1 Like
51

Michigan grad students would strongly disagree about pay.

1 Like
52

Comfortably so, in fact. It’s about a 2.5% CAGR.

TBH most deferred maintenance is not stuff you obviously see. It’s not like buildings crumble to the ground and become obviously dilapidated…no school in their right mind would let things get to that point. It’s more like…a roof that should be replaced after 20 years is deferred until year 25. Or a giant HVAC system. These things all have useful rated lives. They can and often are stretched. You don’t see that by walking around, generally speaking.

Not making any claim here that Purdue is doing this. Just that it’s definitely possible despite what a visual inspection may seem to indicate. Even a close visual inspection.

53

Zero. Michigan sports are self supporting.

1 Like
54

They might also be strongly out of a job in the near future if they continue to strike.

55

I think that is often true, although I also think it depends on the field. The critical question is often what sort of alternatives the person would have. If it is a humanities PhD, their alternative may basically be going back to law school. If it is a STEM PhD, maybe something a lot more immediately lucrative. So as another poster noted, competitive faculty costs can depend a lot on your academic mix.

I also note those high-profile/high-output faculty members you referenced can have an extremely outsized role in determining how their departments will “rank” according a variety of sources. There is good reason to wonder if going to a college with a highly-ranked department in your major is actually all that important for an undergraduate, or if instead a wide range of “good enough” departments could get you where you want to go. But as long as a lot of desirable students believe departmental rankings matter, then this is a potential issue for colleges.

56

By the way, I note that thing about high-output faculty and rankings sometimes leads to what I think of as a venture capital approach to junior faculty. Highly competitive universities know most of their junior faculty will end up just kinda meh by their academic community’s standards, but they are hoping to catch one of the ones who explodes in prominence.

The problem is that other competitive universities will then throw money and titles at those people to try to woo them away. Still, you might have an inside advantage if they like where they are, their families like where they are, and so on. Same reasons why free agents in sports, say, don’t always re-sign, but re-sign more often than random chance would suggest.

And so you might well try to poach such people before they actually explode. And then also pay more to keep them from being poached.

Anyway, this is one reason not to just treat junior faculty completely as a replaceable commodity. Maybe MOSTLY as a replaceable commodity, but to the extent you think you have identified someone who might be on that explosive track, you might be willing to spend somewhat more to get or retain them before they explode.

57
1 Like
58
59

This says Mich athletics had a $17.1M surplus in 2022: Michigan athletic department: $17.1M surplus for 2022 fiscal year

As to the playing only 7 home games and the hit on revenue…why didn’t they schedule a non-conference game? :thinking:

60

The athletics balanced budget above is for 2024.

And that’s when USC and UCLA enter the scheduling, which now will change again with the additions of Oregon and Washington.

2 Likes