There's a lot of room to debate on what colleges should spend their money on, and what they should be providing. But American universities are not strapped for cash, and should be spending more of it on things that directly benefit students and researchers.
It was certainly an amusing visualisation lmao
For every dollar in tuition, >Y% must be spent on qualifying direct educational expenses. E.g. teaching faculty salary, etc.
If a college fails to meet that threshold, and spends too much on non-qualifying costs, they are required to rebate the difference to students.
If a college refuses to do this, they're no longer eligible for federal educational money (Pell grants or loans, etc).
Then let colleges optimize themselves to get under the limit.
It caused a lot of scrambling and long-overdue efficiency improvements in another legacy, slow-to-change industry (health insurance).
The only reason the cost of college is high is because 18 year olds that know nothing about finance don't have to pay for it now because they can get loans.
You take away the loans, and you take away the ability of the college to charge whatever it wants and kids keep paying.
So what has changed? States have stopped funding for schools. A lot of tuition used to be covered by tax money, which spreads out the cost to everyone and over many years. Now, it is a very abrupt cost to a small group of people.
The prior funding model also had the benefit of a progressive tax system. Wealthier people paid into it more than poor people. Now, students have to rely on unpredictable financial assistance like grants and scholarships, and take on predatory loans to cover the difference.
Yes - but more importantly, schools got more expensive, because people had more access to debt.
In the ACA aftermath, I believe you saw more insurance companies exit markets because they couldn't be competitive and profitable on prices with standardized plans.
Which is its own problem and led to a lot of limited-insurer markets, but a different one.
Our current health insurance laws should NOT be a model for anything, ever!
Construction projects are typically the result of specific earmarked donations and sports investments often create lots of income. NCAA Division I programs should be thought of as a side business that generates revenue for the university.
Administrative staff is the major problem here. It’s also where most organizations tend to dump their excess revenue, and since the US has been aggressively subsidizing demand for universities for decades, they’ve had a ton of excess revenue to dump into administrative staff.
> TAs, grad students, adjunct professors
Most academic fields produce significantly more Ph.D.’s than there are tenure track positions or other full time professional careers. As a result, the grad student or Ph.D. exists in a competitive-verging-on-exploitative labor market. The typical grad student or adjunct is in the same position as the aspiring actor who has a day job in LA waiting tables. People always claim that this is because there aren’t enough tenure track positions, but I think that’s backwards. Why would you open up a tenure track position when you have a plethora of Ph.D’s who are apparently willing to work as adjuncts? If the universities didn’t produce as many Ph.D’s in the first place, the labor market would be more competitive and they would need to offer tenure track positions.
And when it comes to side businesses, sports pale in comparison to endowments.
Edit: Just to clarify, my only point here is that criticizing these Division I schools for how much they spend on their sports programs is fallacious. If you have a different criticism of college sports, that's fine but I'm not sure why you're addressing it to me.
But something like Duke Basketball has been tremendously beneficial to Duke–in terms of brand awareness. Same with UT Austin and their football brand ($7mm on new locker room is insanity tho).
Tulane might be a counterexample to this especially since the 80s (although not lately)
They would just toss the "old" flowers in the dumpster
My experience discussing this with some Deans of (large, top 10ish) institutions is that space and (qualified, tenure track) faculty are basically the hardest things to find, and space is probably harder. Lots of things require space (including, for example: student services), but space is limited, and classrooms and research and administrative space often take priority. And creating space is difficult, it takes years to build a building.
The problem is not the high amounts, but most donations can only be used for a specific purpose, so even though the endowments are high, the actual working capital will be a lot lower.
I battle our elected officials with similar arguments. We want some safety improvements to our neighborhood roads. We ask them to work on a fix. They say there isn’t money for them. We show them there are federal grants to pay for them. They say they need staff to “manage” the grant money. End of the day, now nothing happens and we still have unsafe roads.
You can’t argue no money is better than some money. It takes a little more to see change but you go much further
If a gift requires further spending later and the overall benefit is net negative, its up to the university to negotiate terms or turn it down.
It's all university leadership failing to steward their university.
Taking into account fictional future donations and communicating with donator and explaining the issue is called negotiation. Being convinced to make bad financial decisions in fear of losing a donator is again, a failure of leadership.
If someone offers you $10 if you spend $100 later you're better off not taking it, even if you could have bought something with that $10. That basic financial stewardship is the role of university leadership to deal with. They failed.
Not (always) true. Direct example with Carnegie Mellon - David Tepper was upset the business school (his alma mater) was appearing to fall behind in recruiting, so he donated ~100m but tied it to the business school getting a new building/quad. Total cost to the university was well north of 200mil; and their hands were functionally tied in how it was spent.
Yes, I know this is an outlier and yes, university leadership could have said no - but you're risking pissing off a doner who's given 100m+ over the years and will likely continue giving (and you know Tepper will continue guiding further capital expenditures as he sees the need).
"Your $100m gift will cost us $200m, we can't accept it as currently stipulated".
All university leadership decisions that they failed on.
SUNY Binghamton recently received a private donation of $60 million, with a rule from the person donating it had to be spent on a new baseball stadium. Do you think the university leadership should have declined the offer?
What good is a $60 million donation if it costs you $100 million on something you weren't going to buy in the first place?
The entire point of this thread is that universities aren't doing that, because they're accepting $100 million donations with quarter-billion dollar lifetime price tags tied with them.
1. https://www.newyorker.com/magazine/2021/11/22/nightmare-of-t...
Whoever pays for upkeep should get the naming rights.