More on is college worth it
May 21, 2012 4 Comments
OK, so this stuff is everywhere. Maybe a tipping point, or maybe just the recession has just made people pay more attention to what they got for their student loans, or maybe a simple sweeps month link to graduations.
- Mike Munger links to a two part Bloomberg series
- 60 minutes had a report last night on the value of college, and an alternative route; here is the vid.
Past stuff I have written on this down the path here.
The confluence of two factors made me start thinking about this: first, serving on the executive committee of the Sanford School of Public Policy several years ago during a period of budget cutting, and looking more closely at the the cost side of our academic enterprise. Second, having an 11th grader and helping (watching?) her think about where she wants to go to college, and listening to college tours through the ears of a parent. In doing this, I found myself say (silently, I value my relationship with my daughter) Bullshit! quite a lot.
When I wrote that college tuition was a bubble, I was (and am) mostly thinking of the cost side of the college equation. There are many key issues, but I think the bottom line is that there are many things that are being done by research universities that are cross-subsidized in non transparent ways. I am less sure about small, teaching-focused liberal arts schools, meaning I just don’t know much about the cost side of their equation. My bottom line to my friends and colleagues in the academy is that we had better get out front of this and take seriously the notion that there may not always be an unlimited supply of people willing to pay the full freight private University tuition, especially at lower ranked ones with less expansive financial aid than the Ivies, etc.
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Don, more on this please:”I think the bottom line is that there are many things that are being done by research universities that are cross-subsidized in non transparent ways. ”
I think you are right, and I have long been wondering about this myself. A few years ago, I was an assistant Prof at an R1, and our chief accountant, I mean, academic officer used to be fond of saying something like “For every research dollar you bring in, it costs the university $1.25” or whatever. And of course, this does not include indirect costs-they are included in the $1, which, depending on the university, represents somewhere between $.50 and $.75 in research funds (including salaries). The number varies from place to place, and surely takes into account the well-known “research costs” like building big shiny research buildings or what not (and debt service on those capital expansion projects), the cost of recruiting top notch researchers who will never so much as deliver a single lecture in an undergrad class, the costs of the retention package paid to the star faculty member who has attractive outside offers, the cost of the newly expanded Office of Research, with its Vice Provost and high level Assistant Vice Provosts (with great offices in the shiny new building) who manage the gazillion dollars in research funds that flow through the university, the hoards of replaceable adjuncts who are hired to teach the classes that the tenure track and tenured faculty don’t teach, and the cost of recruiting junior faculty to fill the vacancy created by the assistant professors who were denied tenure for only bringing in $1.8 million and publishing nine papers, when everybody knows that you have to bring in $2 million and publish ten papers.
So, whenever the Chief Academic Officer started carping about the $1.25 thingy, I wondered where the extra .$25 came from. And I started thinking that maybe it was coming from the moms and dads of the undergrads and from deferred loans to the kids themselves.
I read somewhere (can’t remember where and don’t want to mis-attribute) that as the amount of research funding to a university increases, so does tuition. I know that tuition is increasing everywhere, and this may be a meaningless correlation. But I somehow doubt that.
Anyway, I’d like to hear more about what you have to say on this. Especially on the “get[ting] out in front of this” part.
Duke’s NIH indirect is about 55%, so if I get a $1 Million grant from NIH, the $1M in direct is for salary, equipment, survey costs–doing the project. The 55% is for overhead. One of the true mysteries of research univ is where does the 55% go? There is an actual answer, and then there are lots of ways of describing the reality that masks the cross subsidies.
I am actually fine with grant getting areas cross subsidizing areas that the univ decides are important but harder to fund, I just with it were (1) clearer and (2) more of the money was available to seed new grants. I have a fair amount of experience, I have gotten 4 Fed NIH or similar RO1s as PI while at Duke. Also gotten several foundation grants, but keep in mind (as you know) the indirect for foundations is much lower (14% is the rate on a large foundation grant I have now). I have mostly viewed all this from perspective of Principal Investigator are how it effects my research….trying to think about it more broadly now.
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