Sunday, March 09, 2008

Tuition Gouging, Windfall Endowments, Part II

This recent CD post featured a graph that showed that college tuition has increased about 2.5 times more than the CPI over the last 30 years, and has risen even much more than the price of oil. I posed the question: Where are the Congressional hearings on "tuition gouging" and "windfall university endowments ($411 billion currently)." Here's the answer from the Boston Globe:

Under growing pressure from Congress, the country's wealthiest colleges and universities are sharply resisting calls to spend more of their soaring endowments to expand financial aid and curb tuition hikes that critics say are putting college beyond the reach of ordinary families.

The pattern of deep-pocketed universities regularly raising tuition while amassing fast-growing fortunes has drawn unusual scrutiny from government leaders and higher education advocates over the past few months. They say elite colleges are hoarding wealth that could help open their doors to more poor and working-class families.


In Massachusetts, 13 institutions boast endowments of more than $500 million. The Boston area's eight wealthiest schools hold a combined fortune approaching $50 billion.

See the chart above (click to enlarge) of the 20 largest college endowments (totaling almost $200 billion), from a database in the Chronicle of Higher Education (paid subscription required) for the endowments of almost 800 colleges and universities (combined total of $411 billion as of June 2007). Harvard's endowment alone of $34.6 billion is more than the cash holdings of General Electric, IBM, Wal-Mart and Microsoft, combined!

5 Comments:

At 3/09/2008 11:04 PM, Blogger Rick Ballard said...

Either my eyes have gone bad or you have a sum error in the '07 column.

 
At 3/10/2008 3:56 AM, Anonymous Anonymous said...

The first thing that needs to be done on all these campuses is dump collage sports and turn these back into learning centers instead of football franchises,

 
At 3/10/2008 6:28 AM, Blogger juandos said...

"The first thing that needs to be done on all these campuses is dump collage sports and turn these back into learning centers instead of football franchises"...

Interesting point...

Back in the late sixties and early seventies college football actually helped pay for part of the tuition in a manner of speaking...

The money cranked out by ticket sales and television contracts did help keep tuition lower than it could've been...

How about elimanating all the silly and totally useless, 'touchy-feely' courses such as women's studies and other balkanizing nonsense that is being foisted off as education?

 
At 3/10/2008 7:19 AM, Anonymous Machiavelli999 said...

This is example #4,895 of what happens when government attempts to lower the cost of something. The cost goes up!

And the reason no one is talking about this is because its much easier to bash big oil companies than universities. The same holds true for farmers who are ripping us all off with the subsidies they are getting. Few politicians have the guts to say anythign about it.

 
At 3/14/2008 3:57 AM, Blogger OBloodyHell said...

> Back in the late sixties and early seventies college football actually helped pay for part of the tuition in a manner of speaking...

OK, what planet are YOU guys on?

College football (and sometimes basketball) are the only typical portion of the university setup which puts MORE money into the university than it receives. If it's putting "less" into the school, it's because a part of it is getting shunted off as a result of Title IX to pay for "equality" in womens' sports (generally a money pit) as well as many other sports programs (tennis, swimming, diving, gymnastics) all of which are also money pits regardless of sex involved.

The driver of inflating tuitions (I know, I live in a University town) is the fact that universities nowadays measure the "reasonability" of their tuitions by comparing them to the per-state averages -- "Florida's SUS tuition ranks 47th out of 50 states" (I made that up, but it's the typical line put forth) -- so what happens? Duh. Florida jacks up its tuition costs, and that puts some OTHER states down at the bottom, and within a few years, they are using the same statement to jack up THEIR tuitions -- an endless ratcheting system.

In the mid-70s, the typical undergrad credit hour at UF was $15. Right now, according to UF's website, it is over $108/hr (non-inflation adjusted).

Inflation since that time is certainly not (much) more than 3x, if that, so an inflation adjusted price comparison would be that it has skyrocketed from ca. $45 to $110 in that time frame. In the mean time, I can also tell you that the amount of near-campus low-cost housing has virtually disappeared. Thanks to local zoning regs, a lot of the property near campus has gone from cheap shacks to expensive multistory apartments. Nicer to live in, yeah, but not a place anywhere for anyone on the cheap. Since the 70s, much the same has happened with the price of apartments, which have gone from a minumum of about $100 a month to $500 for a one bedroom, and there is nothing in that price range near campus -- you'll need to take a half-hour bus ride or have a roommate if you want to pay that little.

College has become a tuition grinding business in the last 30 years. They crank 'em out like postcards.

 

Post a Comment

<< Home