Junior Ganymede
We endeavor to give satisfaction

Where is all that money going?

March 16th, 2010 by Vader

This genuinely puzzles me.

Comments (13)
Filed under: We transcend your bourgeois categories | Tags: ,
March 16th, 2010 10:28:34

March 16, 2010

Football. Colleges say that football pays for itself and even funds other sports. They lie.

John Mansfield
March 16, 2010

Where does it go? Education! It’s because of all our extra spending that people are so much more richly higher educated than they were decades ago. If we didn’t spend all that money, then we would be more poorly higher educated. It’s a tautology of sorts.

Bruce Nielson
March 16, 2010

The graph only shows the University president. Can I make an assumption that all university salaries follow the same trend and therefore explain the rising costs?

If so, then we’d have to ask “why are salaries rising”? And the answer would be an appeal to capitalism, I’d imagine.

March 17, 2010

Your assumption, while plausible, turns out not to be the case:


“Adjusted for inflation, salaries of chief executives in higher education rose 35 percent between 1995-1996 and 2005-2006 while faculty salaries rose 5 percent.”

The football theory also does not hold up:

“The report also notes high-profile contracts for football coaches, such as the University of Alabama’s Nick Saban, who recently signed an eight-year deal worth at least $32 million. That’s about 10 times as much as Alabama’s entire need-based financial aid budget in 2004-2005.

“Of course, those increasing salaries amount to relatively little in a school’s total budget, given that colleges have no more than one head football coach and one president, while they may have thousands of faculty.”

So the bulk of the money isn’t going to the president or football coach, because these individuals are relatively few in number; and it’s not going to faculty, whose salaries are practically stagnant. Unless it’s going to faculty in some other form of compensation than than salary, a distinct possibility considering that this is the pattern elsewhere in the economy.

I’m still puzzled why it’s so much greater than inflation. If anything, the CPI overestimates inflation.

madera verde
March 17, 2010

“That turns out not to be the case,” senator.
One of my favorite lines – and diplomatic. From the Mote …

March 17, 2010

Personally, both my hands are gripping.

Adam G.
March 17, 2010

If individual faculty salaries aren’t rising, what about the ratio of faculty to students? Or what about the ratio of non-faculty staff to students? And what about staff salaries?

March 17, 2010

Sorry, Vader, but your rebuttal doesn’t make much sense.

My football theory holds up, because I wasn’t talking about just one coaches salary. In many cases, they have dozens of coaches (one head coach, but a dozen other coaches) as well as facilities for the athletes, etc.

For example, see here:

“Many outside UT seem to think that we also receive positive net income from intercollegiate athletics, since the gross income from this source seems enormous (e.g., gross income for intercollegiate athletics was $105,230,260 in 2008-2009, the latest figures available, or a little less than 5 percent of UT’s total income from all sources). But athletics expenses (e.g., $107, 283,744 in 2008-2009) are even higher than its income. To make up the difference, UT has to “transfer in” large amounts from general revenue funds such as Trademark Income.”

and here:

“Revenues from big-time athletics at Clemson University have soared by more than $20 million since 2005, yet the program last year operated at a slight loss even as income from ticket sales jumped 59 percent”

Or here:

“Despite winning football seasons in recent years, sports finances for Oregon State University and the University of Oregon both fell in the red by the end of the last fiscal year, according to a report the State Board of Higher Education’s finance committee will review Friday”

or here:

“Out of all university departments, Intercollegiate Athletics has the third-highest number of staff members who earn at least $100,000 each — just under the School of Law with 34 six-figure staff members and the School of Dental Medicine with 49.

Assemblywoman Shelia Leslie, D-Reno, says that paying that much for the athletic department is unnecessary.

“I have felt for a long time that the salaries paid to athletic personnel are completely out of whack. I have felt that way since I was a teaching graduate student at UNR,” Leslie said. “The way it’s always been justified to me is they bring in revenue through the athletic programs, and they’re worth that amount of money. But I think they’re highly overpaid.”

I think you get the idea. It’s more than one person’s salary. It’s the whole dysfunctional focus on athletics (especially football) over academics. Football is great and all, but higher ed spends too much on it.

March 17, 2010

I had a pretty good response to Vader, but it had a lot of links. I think it’s caught in some spam filter. Please save it from oblivion!

March 17, 2010

I think Adam’s suggestions are more plausible than athletics. However, it’s simple enough to test. Is the rate at which tuition is rising less at schools with no significant athletics programs, such as MIT or Caltech, than at schools with large athletics programs, such as Clemson or UNLV?

I don’t have the data, but perhaps it can be found somewhere.

I am, incidentally, no fan at all of college athletics, which I consider wrong in so many ways. But I am skeptical it explains why tuition began rising so much faster than inflation ca. 1982.

March 17, 2010

Well, it’s likely not attributable to one specific thing. it’s likely a mix – out of control athletics, colleges with significantly more staff than faculty (often due to an excess of specially targeted departments that do nothing but create the appearance of work), bad governance, greedy presidents, etc.

John Mansfield
March 18, 2010

I think the demand side of the equation is the biggest problem. College education is increasingly an indispensible credential that people buy to have a place in society, something like an 18th Century military commission. With its value to the future so disconnected from what it costs to produce it, the price is limited to what people can pay, now and for the next twenty years. Given all that money, universities can always find something to do with it.

I remember once as a graduate student employed as a research assistant by my department, the standard arrangement, something went funny with the accounting that my department hadn’t paid the university for that semester’s tuition. This was all straightened out quickly and easily, but the thing that stuck with me from the paperwork I walked over from my department to the registrar’s office was that though the sticker price for a semester’s education was something like $11,000, my department only owed the university about $2,000.

I don’t know anywhere quite like universities that have so much price discrimination, where the answer to “How much does it cost?” is “Fill out this form and show how much is in your bank account and your parents’.”

I don’t particularly want to disclose my income and wealth to my children’s future colleges, but I don’t know if there is a way around it short of them paying full sticker price.

March 18, 2010

“I don’t know anywhere quite like universities that have so much price discrimination, where the answer to “How much does it cost?” is “Fill out this form and show how much is in your bank account and your parents’.””

Rather like the rail barons of the late 19th century, eh? The ones that allegedly insisted on seeing the books of their farmer customers before quoting the freight to take their crops to market.

“I don’t particularly want to disclose my income and wealth to my children’s future colleges, but I don’t know if there is a way around it short of them paying full sticker price.”

Don’t send them to the Ivy League. I don’t consider anything fancier than BYU to be cost-effective anyway.

Graduate school is another matter. But, oddly, ample student assistance is almost always available for that.

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