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The government’s response to the college loan problem is so typically useless. It doesn’t make an attempt to address the root problem. In my last blog I didn’t pull any punches while putting the blame for college debt squarely on the shoulders of students, and the government. Students weren’t forced to go to expensive 4 year schools. They could have chosen a 2 year community college and dramatically cut their costs. They could have chosen a major that gave them a fighting chance at finding a job that would have made the loans easier to pay off. Etc. Etc.

Another problem, equal to that of the irresponsible student, is the inexplicable increase in the price colleges charge for tuition, room and board, and books. College costs have risen between 3-4 times as fast as the rate of inflation for decades. (The cost of non teaching administrators has risen even faster). That is inexcusable! Just a few statistics for you to consider. According to Statista in 2010-11 there were 25.2 million students enrolled in colleges and universities. From 2010 to 2018 college enrollment was basically flat. In 2020-21 they report that college and university enrollment was 20.8 million. That is a reduction of nearly 25%. The number of professors also remained nearly flat from 2010 to 2020. One big difference is that, according to the Dept. of Education, full time tenured professors made up 67% of faculties in 1980. In 2020-21 only 48% were full time, tenured, professors. That means that over 1/2 of those instructing our children are part-time professors. It sounds like we are paying for steak and getting hamburger.

If we want colleges and universities to be more responsive to their customer base we must insist they have some “skin in the game.” Many of our most expensive schools have eye popping endowments. According to Degree Query the total amount of money in the endowment funds of the 20 largest colleges grew from $30.6 billion in 1990, to $302.1 billion in 2021. Endowment funds pay no taxes. Talk about paying your fair share. According to U.S. News and World Report the 10 largest endowments in billions were: Harvard-$41.9, Yale-$31.1, Stanford-$28.9, Princeton-$25.9, MIT-$18.4, Univ. of Pennsylvania-$14.9, Texas A & M-$12.7, Notre Dame-$12.3, Univ. of Michigan-$12.3, and last but not least, Columbia with $11.3. Any school with an endowment over, let’s say, $1 billion should be required to be a co-signer of every student they accept who requires a loan provided by the government. You’d better believe these schools would do a better job of guiding students toward more useful, meaningful, degrees.

How do we understand what a billion dollars in endowments could provide for students? It is reported that the endowment funds earned an average rate of return of 8.5% per year from 1990 to 2020. Let’s take a look at what the endowment of our “poorest” example above, Columbia, could provide for its undergrads. To keep this simple for me I’ll round the amount in their endowment down to $11 billion, and reduce its rate of return to 8%. Given those two factors, using simple multiplication, we learn that Columbia earns about $880 million dollars a year in investment returns. Before the American people are asked to subsidize Columbia, Columbia should use this massive amount of money to reduce the cost of room, board, books, and tuition for its undergrads.

While we are talking about the money involved in higher education we need to take a look at the subsidies provided by we taxpayers. A report compiled by the American Institute of Research and Nexus Research & Policy Center gives us an idea of the extent to which taxpayers already subsidize college students, and the universities they attend. The report says that elite private schools receive around $13,000 per student, per year, and selective public schools receive around $23,000 per student, per year, in taxpayer funding. (This is before the hundreds of billions of dollars our dementia addled President is demanding from us to forgive student debt). When the Univ. of Michigan released its 2018-19 enrollment number it showed there were 30,875 undergraduate students at the school. The school received an average of $21,444 per undergrad student. You do the math.

If we are looking at ways to reduce college costs we need to review a couple of other ridiculous items. As mentioned earlier, more than 1/2 of the classes offered at universities are taught by part-time professors. Universities should not be allowed to charge our students full price while delivering instruction from part-time professors, or all too often grad assistants. Students who take classes taught by part-timers should receive a discount on their tuition costs. Fair is fair.

Growth in the number of college administrators has, without a doubt, had the most deleterious impact on rising college costs. Administrative bloat has been out of control for a couple of decades. At a typical school there are now more administrators than faculty. This meteoric growth of pencil pushers has done little to advance the education of our students. In fact, many professors find that by adding layer after layer of c y a employees they are required to attend more meetings, and fill out more forms. That leaves them less time to do what they are paid to do. Most of those forms do nothing but validate the need for the administrators. Being from Michigan I’ll use the U of M as an example one last time. A decade ago the U of M did not have a Committee on Diversity, Equity, and Inclusion. (Apparently they didn’t know they had a problem until Harvard, Yale, and UC Berkeley, etc. told them they did). Today, the Dept. is home to over 90 employees, 26 of whom have salaries over $100,000 a year. The Dept. costs the university over $10 million a year. It is time for those of us who are tasked with compensating this nationwide monster to ask University Presidents to justify the need for this explosion of administrative staff. We know if it is managed by the government it will be inefficient. That doesn’t mean we have to accept it.

Thank you for taking the time to read my blog. If you found it interesting or informative please tell your friends about it. Bob