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Comment by onlyrealcuzzo | Hacker News Reader

For established non-profit schools? Or new, mostly for-profit schools?

I find it hard to believe any reputable, 20+ year-old, non-profit schools are losing money. They should own their assets outright, have extremely low interest rates on any outstanding debt, pay close to 0 taxes. Wages for non-executive staff are not keeping pace with inflation. How are they losing money?

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In addition to large amounts of new construction, administrative staff has expanded massively [0].

Between 1975 and 2011, the number of full-time, tenured faculty at universities grew by 23%. The number of administrators grew by 369%. The trend seems to be to hire part-time and untenured faculty to keep salaries down, then hire more administrators.

[0]: See "Full-Time Nonfaculty Professional" at https://www.aaup.org/sites/default/files/files/2014%20salary...

Why??

Wow, looks like the financialization of education is almost complete. That graph literally looks like a nightmare.

Can you expand on what you mean by that?

Anyone can spend beyond their means. New dorms, fancy technology, state of the art gyms, expensive non-revenue sports....

The nature of their governance structures makes it easy to spend money but harder to save it.

Gotta have newer, shinier buildings! Not sure my alma mater has stopped construction since I went there, not sure how they pay for it all.

Same here. When I started my undergrad degree in 2006, my university had just built the first new residence hall in 20+ years. Since since I left in 2010, they've added two new academic buildings and two more 4+ story residence halls. Granted, enrollment continues to climb at the school, but they haven't stopped calling me multiple times a year looking for alumni donations...

At least in top-tier research institutions I think this is because big-time philanthropists would rather see their name on a new building or expansion, than earmarked for maintenance of existing buildings. So capital expenditures outpace general operation costs born by state/local and current students/non-wealthy alumni.

Berkeley is arguably the poster child for many of these problems. They continue running on a deficit.

Berkeley is intentionally a subsidized public school, so their deficit is entangled with their subsidy. Nearly government-funded programs are likewise.

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