Up, Up, and Away!
Colleges and universities feel your pain when they send out their bills. Honest. They want to help any way they can. Except, of course, if it means lowering their tuition. Why should they?
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THE BOSTON COLLEGE CAMPUS LOOKS ITS BEST THIS TIME OF YEAR - elegant Gothic buildings around meticulously manicured quadrangles shaded by lush linden trees about to turn majestic shades of gold.
It certainly impresses high school junior Sidney Wise, who is visiting with her parents and younger brother on a quintessential college tour that also takes in Boston University. Her parents, owners of a small graphic design firm and some rental properties in their hometown of Atlanta, also are impressed - and worried. "There's no way we can afford any of these private colleges," Sidney's father, Jim, says flatly as the weary clan slows down outside the imposing Devlin Hall, which houses BC's art museum. "We just wanted her to get an idea of what the experience is like."
He pauses, contemplating his daughter, an honors student and member of her high school's soccer and cross-country teams and chamber chorus, as well as a pianist and guitarist who composes her own songs. In her spare time, she works part time in a neighborhood boutique. "If her heart is set on Boston College," Jim Wise says, "we'll have to sit down and talk about it."
What he means is they'll have to talk about the bill. It costs $51,310 to go to BC this year, $51,100 to go to BU, including tuition, room, board, mandatory fees, and the estimated tab for books and other expenses. In both cases, and for the first time in history, that means the price of a year at these schools and many others has surpassed the median US household income of $50,233, a little-noticed if mind-boggling milestone in the history of higher education.
BC piles the Wises high with brochures describing how they can muster up the money for college, which, these days, for middle-class families like theirs, largely means resorting to increasingly expensive loans.
"That's all they seem to do" - tell parents how to pay, says Sidney's mother, Hollis Wise. In the meantime, Harvard has hit $53,466, Amherst $51,318, Tufts $50,512, and Brandeis $50,298, while Mount Holyoke, Babson, MIT, Smith, Wellesley, and Williams are all at or near the $50,000 mark. The numbers are incomprehensible, and yet nobody is hearing any university explain why it costs so much, and what, if anything, is being done to control tuition. "I've never seen a hint of that," Hollis says. "I guess if they lowered the price, people wouldn't think they were as good."
WHEN THE MORTGAGE CRISIS SUCKED UP SO MUCH CREDIT THAT IT threatened the availability of student loans, universities were among the first to demand the government step in by taking over loans from shaky private lenders. They successfully called for an increase in the principal taxpayer-funded federal government grant for tuition, the Pell Grant. They ran campaigns with catchy slogans ("KnowHow2Go") to persuade young people and their parents that, with the right combination of loans and other aid, it's still possible to pay the skyrocketing price of college.
But contain costs? Curb salaries and payrolls? Increase productivity? Do anything themselves to make a higher education more affordable? That doesn't come up so much.
"The universities seem to have this sense of entitlement that's pretty shocking," says Jane Wellman, director of the independent Delta Cost Project, which has researchers in Washington and Boston trying to figure out exactly why tuition keeps spiraling upward - and how to stop it. "We've let them get away with it. The problem is, it can't last. This is equivalent to the run-up in housing prices. And meanwhile, there are generations of students who are slowly being priced out."
No one with a kid in college or bound for one would be surprised to learn that since 1984 college costs have risen 375 percent, far faster than the 127 percent increase in family income. But during that same time, according to the Delta Project, the proportion of universities' budgets spent on their principal purpose - instruction - has actually been shrinking. So has the length of the academic year and the proportion of courses taught by full-time faculty as opposed to part-time instructors and teaching assistants.
And if that's not enough, here's another startling new statistic: While college graduates continue to earn more than workers without university degrees, that advantage - called the "college premium" - has begun to erode. After a spike in 2000, the average weekly salary of a worker with a bachelor's degree, when adjusted for inflation, has fallen nearly 2 percent below what it was in 2001. "A college education still gets you more than not having one, but it certainly hasn't been rising lately," even though the cost of college has, says Jared Bernstein, a researcher at the Economic Policy Institute who reported the trend. "Wages of college graduates have gone up only 2.5 percent since 2000 in real terms. Tuition goes up that much every 20 minutes."
Maybe, however, it's finally dawning on the universities themselves that people are on to their ways. The National Association of Independent Colleges and Universities warned its members last month that participants at focus groups complained the schools were spending money on "unnecessary" things that did not contribute to the education of students, including excessive administrator salaries and perks and lavish sports facilities.
It's true, sums up Richard Vedder, an Ohio University economist who studies college costs. For all their sacrifices, Vedder says, "a strong case can be made that families are paying more and getting less."
THEY FEEL YOUR PAIN, THE UNIVERSITIES SAY. THEY WANT TO HELP. "We have stepped up efforts to gain yet greater efficiencies . . . to lessen financial pressures" faced by students and their parents, BC provost Cutberto Garza promised when the school announced its latest 6 percent tuition hike. "We remain focused on controlling expenses," BU president Robert Brown proclaimed around the same time. Asked for detailed examples of what they're doing to hold down costs, BU did not respond, while BC said it was reviewing its programs and courses with an eye toward eliminating some that are redundant - though it couldn't yet say which ones.
It's lip service, critics carp. "If I were the president of a university, I would have a rhetoric about cost reductions to keep students happy, parents happy, legislators happy," says Vedder, author of Going Broke by Degree: Why College Costs Too Much. "But there's no stockholder interest that you have to face up to. So there's no real incentive to cut costs."
The reality is that universities have significantly boosted their number of administrative employees in the last three decades. In 1976, there were three non-faculty professional staff for every 100 students; today, there are more than six. And for 11 years in a row, administrators have given themselves salary increases above the rate of inflation - and above what most other Americans have gotten. Garza made about a quarter of a million dollars in 2005, the last year for which figures are available, and there are at least eight BC administrators who make more than $200,000. The earnings of university presidents have risen 37 percent in five years, and the ranks are growing of those who get more than $1 million in salaries, along with free housing, large expense accounts, and enviable benefits. Former BU president Jon Westling, who was forced to resign by the board of trustees in 2002, remains on the faculty and was paid $634,872 in salary and deferred compensation in 2005. Former BU president John Silber was still making nearly $1.3 million a year, and got free housing and a $216,309 expense account. "These are nonprofit institutions," exclaims an incredulous mid-level official at, of all places, Harvard, whose president earned a mere $611,226 in the same reporting period.
The principal faculty union, the American Association of University Professors, wants a piece of that. The AAUP complained in April that raises for administrators are far outpacing those for faculty. "We're asking the question, what should the priorities be? And the answer, we feel, is that the priorities should be on teaching and research," says John Curtis, the union's director of public policy.
But when public Kean University in New Jersey this summer pressed its faculty to be in their offices at least four days a week for students to meet with them (some now spend as few as two days a week on the campus, university officials say), they filed a grievance. And a close look at the statistics the AAUP provided shows that full, associate, and assistant professors all, in fact, got raises at or above the inflation rate, while raises for the growing ranks of instructors and lecturers fell below it. Full professors at private doctoral-granting universities earn an average of $144,256 ($139,900 at BC, $127,200 at BU). And they get something else the rest of us can only envy: Their own dependents often get free admission.
IT MUST BE SAID THAT PARENTS ARE NOT entirely blameless. For their money, they demand amenities like state-of-the-art gyms and dormitories in a dog-chasing-its-tail spiral. "You want them to live in nice dorms. You want them to have nice food," says Kathleen McCarthy, a parent who, with her daughter, attended freshman orientation at BC, where there was yet another presentation about how to pay tuition, and where families loaded up on BC gear (US universities' estimated annual royalties from licensed merchandise: $280 million). How frugally universities fulfill that demand is another question. MIT, for instance, spent $78.5 million on its landmark 350-bed Simmons Hall dormitory. That's $224,286 per bed, nearly $40,000 more than the US median price of a new home at the time, 2002.
For universities, success is measured by prestige, not profit, Vedder says. And prestige is measured largely by how many applicants they can attract. So they build appealing campuses, hire marquee faculty who rarely teach, field expensive sports teams, and spend hundreds of thousands of dollars on marketing consultants. Vedder, a former university administrator, says he was rewarded with raises and promotions for figuring out ways to add more staff.
The closest thing in higher ed to a bottom line, he says, is the all-powerful rankings, which measure such things as programs, facilities, and the percentage of hopeful high school seniors who are turned away. "The way you raise your rankings, by and large, is by spending more money - not less money," Vedder says. And so, says Wellman, "the pursuit of institutional position is trumping the public need."
William Glavin tried to buck that trend. A private-sector guy - he's the former vice chairman of
Hollis Wise is right, says Charles Grassley, the top Republican on the Senate Finance Committee: Universities seem to think that, if they lower the price, people won't trust that they're as good. "Some believe that the higher the cost, the more prestigious they will seem, and that the more expensive they become, the more competitive they are," scoffs Grassley, the most outspoken congressional critic of American colleges. What really got Grassley going was the case of Benjamin Ladner. The former president of American University was suspended after billing the school for such dubious expenses as a family engagement party and travel for his personal chef to London, Rome, and Paris. Allowed to resign, he was given a $3.75 million severance package, provoking the senator to call hearings into fraud by nonprofit institutions.
After all, as Grassley says, universities are exempt from income tax, while their donors benefit from the deductions allowed for charitable giving. Universities save roughly $6 billion a year from the tax-exempt status of their endowment income alone. "Universities and colleges ought to see the tax exemptions that they have as a social compact," he says, "and in exchange provide the best education to the greatest number of students at the lowest cost, instead of a good education to a lesser number of students at the highest cost."
It's not just a suggestion. Grassley has proposed requiring universities to spend at least 5 percent of their endowment income annually, as foundations already must do, and use it to reduce or at least control costs charged to students. The fact is, while endowment income at the wealthiest universities has tripled in real terms, the schools are tightly holding on to it; spending from those endowments is one-third lower than it was in 1982, according to the independent Center for College Affordability and Productivity. The center says the money has been used largely to increase spending on facilities, salaries, and equipment or to increase the endowments themselves - not to lower student charges.
Slowly awakening to the idea that Congress really could step in, some universities are scrambling to siphon more of their endowment money into student aid. The two richest, Harvard ($37 billion) and Yale ($22.5 billion), both have promised to spend more from their endowments on, among other things, financial aid for students from families whose annual incomes are as high as $180,000 (Harvard) and $200,000 (Yale).
But universities have otherwise resisted calls for reform, even as the increasing cost of student loans has sharpened public anger. Two years after the report of the Commission on the Future of Higher Education, they have almost completely ignored its recommendations for making colleges more affordable and accountable for their performance by, for example, publicly disclosing their students' graduation rates. A clearly frustrated US Education Secretary Margaret Spellings warned a conference of higher education officials during the summer that if universities don't take it upon themselves to change, change will be imposed upon them. "In the absence of continued leadership in education," she said, "others will step in."
That backlash may already have begun, if only in small ways. Just hours before adjourning for its summer recess, but in time for lawmakers to proclaim they had taken action to hold down university tuition, Congress voted to require that a list be published annually of institutions with the highest percentage increases in their tuition and fees.
Universities are trying to lie low. If fighting escalates, in addition to heavy lobbying (BU spent $1 million on lobbying in 2005, the last year for which figures are available, and Harvard $552,000), they have an important weapon: Seemingly no matter how expensive it gets, parents will find some way to pay for their kids' college choices.
"Colleges play on people's emotions," says Vedder. "They play on parents' love for their children. Parents will sacrifice their own enjoyment and take second jobs and drive beat-up cars if they think their children are going to be better off. Colleges are wonderfully adept at tapping into these emotions."
And so, the students will keep coming. BC was the fourth-most-applied-to private university in the country this year, with 30,845 applicants. One in four got in. "That's the political psychology of the moment," the Delta Project's Wellman says, "which is that these institutions are so privileged and so important, and there's so much excess demand for higher education, that they can get away with it. It's a seller's market."
Jon Marcus reports for the U.K.'s Times Higher Education Supplement and is an adjunct professor at BC. Send comments to magazine@globe.com.
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