By Nathan Lewis
Tuition at a better sort of private U.S. college or university today is approaching $50,000 “a year,” which is an academic term that means: twelve months including three months of vacation. I decided to take a look at where that money goes.
As nonprofit institutions, colleges are required to post their financial information publicly. I used, as an example, Colgate University, an elite liberal-arts college that is near me. I don’t think it is better or worse than many other, similar institutions.
The headline tuition at Colgate was $49,560 per “year”, for 2015/2016. Including room and board, it was $62,540. The student/faculty ratio was a cushy 10:1. Their financial information for 2011-2013 is here.
Colgate University spent $162 million in 2013, net of grants (scholarships) to students. It works out to $56,000 per student. There’s a lot of strange fluff in the expense column, including $11.8 million paid to outside consultants, $8.0 in travel expenses, $4.2 million to top officials, and $25 million in undisclosed “other expenses.” Total personnel expenses, outside of the top officials, were $86 million.
Using some detailed info on faculty salaries, available online, I estimated that the total payroll cost of the teaching faculty (including all benefits) was $41.6 million. This is less than half of the total cost of all employees, including the parasitic and counterproductive administrative class now common everywhere. Thus, the cost-per-student of the entire teaching faculty — rather well paid by industry standards, with almost all tenure-track positions, and with a cushy 10:1 student-teacher ratio — was $14,500 each, for 2,872 students.
Some administrative and support staff are necessary, plus something for buildings and student services. Let’s add 50%. It brings the total cost to $62 million, or $21,700 per student. This is only 44% of the headline tuition.
There’s an endowment fund, of $610 million. Plus, the college received grants and donations of $36 million. Typically, about 5% of endowment fund assets are distributed to support programs per year. This would mean $30 million of endowment revenue, plus whatever portion of the $36 million in new contributions could be directed toward continuing programs. The gist of it is that most — perhaps all — of the total $62 million in program costs could be covered by endowment and grant income.
Free tuition for everyone! Or, at least, under $10,000 per year.
A study found that the California State University system had 11,614 full-time faculty in 1973, and 12,019 in 2008. During that same time period, administrators grew from 3,800 to 12,183, ending up with more administrators than faculty. I would guess that things were not really all that lean in 1973 either. It has only gotten worse since 2008. An anonymous college professor — he calls himself “Professor Doom” — has been chronicling his own experience working in this environment of bureaucratic horror. As he describes it, all academic standards have tumbled downhill as a consequence. Not just academics, either: with the bemused air of one watching Rome burn, he noted recently that one university formally recognized a Satanist student organization, while another banned a Young Americans for Freedom group for its “inflammatory” anti-communist stance.
At some point, the trustees of private colleges might want to step in and clean things up. Probably, this will not happen until the student-loan money stops flowing, for some reason. When that time comes, they might discover that they actually have a nice little college, underneath that stinking pile of administrative waste and corruption.