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WHY IS COLLEGE SO EXPENSIVE?

BECAUSE OF UNDERWORKED FACULTY AND OVERSTAFFED ADMINISTRATION

But the high cost of college is entirely avoidable! There is one higher education institution – York College in Pennsylvania – that shows that if colleges required their faculty to work harder (approximating the work week the rest of us find normal), held down administrative spending, and reined in borrowing for capital improvements, that these institutions could charge half of what they now do in tuition and fees.

That’s right… half!

But this is not a recruiting blurb for York, although you could do worse. When we examined the reasons for York’s lower tuition we came to a startling — and outrageous — conclusion: The other colleges could get their tuitions down to York’s level if they only cared enough about their students and their families to give it a try!

College costs are as high as they are because the institutions coddle their faculty letting them off with work weeks that we would find laughable while they increase their administrative costs and debt out of all proportion to reality.

It would be one thing if students and their parents had to scrimp and save and borrow and compromise to pay the necessary costs of college. But the plain fact is that they are doing so in order to let faculty members teach five classes a year, spending only 9-10 hours in the classroom per week!

By making their faculty teach eight classes a year and spend 12 hours per week in class – hardly an onerous load – and by holding down debt and administrative costs, York College charges $13,000 annual tuition and $21,000 a year counting room and board – about half of what comparable private four year colleges charge!

York gets no government funding. It is a fully private college. It produces quality graduates. And it does so for half the price!

So why can’t more colleges follow its example? College tuition and fees have gone completely crazy over the past few decades. The New York Times reports that, “college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent. Student borrowing has more than doubled in the last decade.”

In 2007, the net cost of a four-year private university came to 76% of the median family income while costs at public four-year schools took 28% of median family income.

There was a time when students simply could not attend colleges and universities that were too expensive. They would reduce their expectations and attend state schools instead. But now the caps have gone off student lending. Under new student loan programs, students can borrow as much as they like through private lenders without federal guarantees.

So many students borrow way beyond their subsequent ability to pay, as youthful optimism and enthusiasm leads them to make commitments that compromise them severely throughout life. Among students who graduated from four-year colleges owing more than $15,000 in debt, the default rate is running 20%!

Student loan debt is unique among all other types of debt. Under pressure from the special interests, Congress has specified that it cannot be discharged or reduced in bankruptcy and, alone among all other forms of debt, cannot be refinanced if interest rates drop. Does that make any sense? Why are these loans treated any differently than car loans? (For more information on the student loan ripoff, see the chapter in our book Outrage)

But, at York College, tuition is not nearly as big a burden on the families of students who attend. The college’s student body looks a lot like that at comparable institutions in the region. Their SAT scores are about the same (an easy if sometimes flawed measurement of student quality) and its students graduate at about the same rate. By all appearances, York looks a lot like its sister and brother institutions. Except when it comes to tuition. It costs half as much.

The York College student body came to the college with SAT scores in the 1000 – 1160 range, about comparable to other nearby Pennsylvania, Maryland and New Jersey colleges. But while these schools charge annual tuition and fees of between $23,200 and $31,200, York charges $13,680! The following chart compares SAT scores of the kids at York with annual tuition and fees at comparable colleges. Scan your eyes down the tuitions — they are in order of cost from top to bottom — and note how much less expensive York manages to be. Then look down the SAT scores and notice how similar its student body is.

2008-2009 TUITION, FEES AND SAT SCORES COMPARED

College	SAT scores	Annual Tuition and Fees
LaSalle University, PA	960-1200	$31,200
Susquehanna University, PA	1020-1230	$31,080
McDaniel College, MD	990-1210	$30,780
Elizabethtown College, PA	1010-1220	$30,650
Albright College, PA	920-1110	$30,570
Juniata College, PA	1090-1270	$30,280
Moravian College, PA	1020-1210	$30,062
Lebanon Valley College, PA	990-1220	$29,350
Lycoming College, PA	950-1140	$28,764
University of Scranton, PA	1020-1210	$31,576
Rider University, NJ	950-1140	$27,730
Mt. Saint Mary’s University, MD	960-1160	$27,560
Messiah College, PA	1040-1280	$25,670
King’s College, PA	900-1110	$24,680
Alvernia College, PA	817-1030	$23,200
York College, PA	1000-1160	$13,680

While tuition at York has risen by $5,680 in the past five years, tuition at the comparable four-year private colleges in the region, has risen $8,000!

There appear to be three factors that allow York to charge half the tuition of comparable schools:

1. The faculty teach heavier class loads

2. Administrative costs are lower

3. The college’s debt is less

Faculty workloads are a key part of the difference between York and the comparable colleges. The extra three classes a year, and 4-6 hours a week, York asks its faculty to teach makes a vast difference in tuition levels.

College professors, instructors and lecturers are expensive, averaging $75,000 in pay, not counting fringe benefits. About a third of college costs are for faculty pay. Of course, faculty salaries vary widely. According to a study by Oklahoma State University, some professors in disciplines like finance earn over $400,000 per year while lowly English teachers averaged only $67,931.

For that kind of money, wouldn’t it be reasonable to ask faculty members to teach eight classes a year and spend 24 hours a week in classrooms? Why are faculty workloads so incredibly light?

To find the answer, you have to go back in history. When college education was very rare, and graduate school even more so, higher education faculty were supposed to be scholars, dividing their time between cutting edge research in their fields and teaching students. While they taught freshman biology, they were supposed to be contributing to breakthroughs in medical research.

And universities demanded that their faculty publish their research so as to add to their campus’ prestige. “Publish or perish” became the watchword. To encourage their rarified faculty to do more research and writing, universities held down their course load, often requiring them to teach only one seminar per term for a small group of specially selected scholars.

But as higher education proliferated and more and more students went to college, the number of faculty members, of course, multiplied. Not all were engaged in crucial research. Most, in fact, were just teachers with a higher level of knowledge and more education than their public school counterparts. Particularly at state universities and community colleges, the faculty looked more and more like the folks you would find teaching high school and less and less like Einstein.

While the top research universities still value research — and the grants it often brought with it — lesser private institutions began to look more like public colleges. Research was not at a premium.

But the traditional faculty workloads remained light. While high school teachers had to spend thirty or more hours in class, college faculty workloads lagged far behind, even though they were usually paid about twice what a high school teacher earned.

This legacy of an orientation toward research and writing has left faculty workloads traditionally light at virtually all colleges — except York!

Some colleges and universities still focus on research. Jane Wellman, who was executive director of the Delta Project on Postsecondary Education Costs, Productivity and Accountability which examined 2,000 colleges and universities, reports that an increasing proportion of higher education budgets are going to faculty research and recruiting. “We see indications that institutions are spending more money in areas that may not fit in with the public priority of preparing more graduates,” she said.

But the real question is whether holding down faculty workloads and raising tuition as a result is good public or private policy. While there are doubtless research faculty at Harvard and Columbia whose work might someday cure cancer, one wonders if the average, run-of-the-mill four year private college has such geniuses on its payroll!

But faculty salaries and workloads are only part of the problem. Between half and two-thirds of the typical collegiate or university operating budget is spent outside the classroom. Administrative costs and debt service account for larger and larger shares of the higher education budget.

While the number of full-time faculty has tended to decline nationally — with part-timers taking up the slack — the number of administrators has grown at an unhealthy clip.

The American Association of University Professors estimates that “from 1976 to 2005, the number of full-time college administrators (vice presidents and deans, for example), rose by 101 percent, while the number of full-time non-faculty professionals (in student services, development, and information technology, for example) rose by 281 percent. Over the same period, the number of full-time tenured and tenure-track faculty members rose by only 17 percent.”

Most outrageous is the run-up in university president salaries. Mimicking their brethren in corporate America, their compensation soared. The New York Times reports, for example, that David J. Sargent, the 77 year old president of Suffolk University in Boston “received a $2.8 million pay package in 2006-2007 — including a $436,000 longevity bonus and more than one million in deferred compensation.”

David P. Roselle, until recently the president of the University of Delaware, has a pay package of $2.4 million in June of 2007 and E. Gordon Gee made $2 million as head of Vanderbilt University. He took a pay cut to $1.3 million to become president of Ohio State, making him the highest paid public university president in the nation, a fact that probably thrills Ohio taxpayers.

In all, the Chronicle of Higher Education reported that “59 college presidents at public universities received more than $500,000 in 2007-8, compared with 43 the previous year. At the private institutions, 89 received at least $500,000, compared with 81 the previous year.”

So 59 state colleges and universities presidents are paid more than the governor of their state or the president of the United States or U.S. Senators or cabinet members are paid!

Taxpayers, on the one hand, and students on the other are obliged to pay through the nose so that a handful of college presidents can make huge salaries!

But administrative expenses are much lower at York College, reducing the upward pressure on tuition. At private research universities, administrative costs accounted for 33% of the school’s budget while at public research universities, it ran to 28%. At four-year private colleges similar to York, administrative costs that average 22% of their operating budget. But, at York, it consumes only 18% of the budget.

So it is the profligate bureaucracies at other colleges and their under-worked faculty that are responsible for their high tuition levels.

In addition to low faculty workloads and soaring administrative costs, increasing college debt is the third factor in the escalation of tuition.

Private colleges and universities habitually borrow money to build up their campuses. Competing vigorously for students, they are all anxious to build the biggest and best academic buildings, student centers, athletic fields, and dormitories.

Money Magazine describes the accoutrements of Wesleyan’s 360 acre wooded campus “complete with state-of-the-art film center, 7,500-square-foot fitness facility, skating rink, 11-building arts complex and a new $47 million student center offering everything from Mongolian grill entrées to organically grown coffee.”

The magazine notes that “if colleges were spending most of their money on initiatives that improve the quality of education for students, you might regard price hikes running at two to four times the rate of inflation as a necessary evil. But spending on palatial dorms, state-of-the-art fitness centers and a panoply of gourmet dining options? Maybe not.”

Instead, Money points out, “they’re spending even more on building Hogwarts-style dorms with mahogany casement windows of leaded glass (Princeton’s newest $136 million student residence); installing 35-foot climbing walls and hot tubs big enough for 15 people (Boston University); providing multiple eateries with varied cuisines and massive fitness and recreation centers (too many schools to name).”

“There’s a lot of competition from other colleges,” says Steven Knapp, president of George Washington University. “In today’s consumer culture, parents and students expect a certain level of comfort – and they compare the amenities.”

But York College does not incur debt for academic halls or other campus facilities. It pays for them out of donations and tuition. It only borrows money for revenue-generating projects like dorms. So the expenses for room and board of those who actually live in the dorms repays the debt and it does not drive up tuition. The per student indebtedness at York is only $16,150 compared with $18,935 at comparable peer institutions.

More and more colleges and universities are spending money on status symbols and administration which has nothing to do with the quality of education.

But York College eschews empire building on its campus and focuses on holding down costs to the students and their families instead, a welcome priority that we hope other colleges emulate.

It is, of course, the students who have to pay for the bulk of the administrative, salary, and debt costs of their colleges.

The New York Times reported that the Delta study showed that “in 2006, the last year for which data is available, students at public colleges and research universities paid about half the cost of their education.” Four years earlier, in 2002, it was just 40 percent!

The same trend has gripped public community colleges, where students now have to pay for 30 percent of the cost of their education, up from 24 percent in 2002.

At private liberal arts colleges, students now pay almost two-thirds of the cost of their education.

The current economic catastrophe is forcing colleges and universities to begin to cut back. The New York Times reported that “in a survey of 372 institutions in December, the National Association of Independent Colleges and Universities found that… 50 percent that said they had stopped hiring, 49 percent that had delayed construction or renovation and 22 percent that were freezing salaries.”

Ironically, the higher tuition gets the more colleges and universities, particularly private ones, spend on student aid. Many schools spend up to 40 percent of their budgets on scholarships and loans to help students pay for their bloated tuitions. These colleges and universities would serve their student body much better if they held down their costs in the first place by relatively harmless measures like making the faculty work harder and trimming administrative costs. But deciding who gets and does not get scholarships must warm their redistributionary hearts!

York, with its lower tuition, spends only 20% of its budget on scholarships. Rather than doling out benefices, as other private colleges do, York just holds down tuition in the first place so it doesn’t have so many students in need of financial assistance – a much more democratic approach.

So, if York College can hold down faculty, administrative, and debt service costs, other colleges and universities can do it too. But the key question, of course, is: Does the lower spending at York cause inferior education?

The best way to answer the question is to compare graduation rates at York with other similar colleges.

Let’s contrast Albright College with York. Both are in Pennsylvania and both admit a similar quality of student. The SAT scores of Albright freshmen runs between 920-1110 while York’s average 1000-1160. After four years, York graduates 40% of its students while Albright gives degrees to 53%. After five years, York does better than Albright. Albright graduates 59% while at York 63% get degrees. And by six years, Albright has graduated a cumulative total of 60% while York has awarded degrees to 65%.

Why does York lag in its four year graduation rate?

Dean of Business Affairs, C. Matt Smith explains that York’s “highly regarded engineering program is designed to take 4.5 years from start to finis h and that programs in education and nursing also have strong required work experiences intertwined with classroom learning which tend to bleed into a fifth year.”

York also attracts a lot of lower income students because of its reduced tuition. They often take a year or two to catch up and acclimate themselves to college work. But, by the fifth year, they are generally doing just fine and graduate.

ACTION AGENDA

The essential point of this chapter is to help students and parents realize that high tuitions are not inevitable nor are they the necessary concomitant of a good education. By breaking from the mold, York College proves that it is possible to get a good education, attract a good mix of highly qualified students, hire good faculty members, run a smoothly operating institution, and graduate students at a rapid clip all without charging a huge tuition.

Parents and students do not need to make the false choice between permanent debt and forced scrimping on the one hand and a quality private college education on the other.