University money machines

The ivory towers and the ivied walls, the statues of great persons past, that hallowed alma mater and the professorial types shuffling between classes across the quadrangle – all combine to create and maintain the imagery of higher education in America.  But make no mistake about it: these are featherbeds for some and money machines for others.

Albeit that there is a strong distinction between private and public universities, all enjoy some measure of taxpayer subsidy.  Thus, and consequentially, we as taxpayers are entitled to notice, critique, and demand. 

A scheme of sorts has been cleverly plotted with federal grants, guarantees, and student loan authority.  (Recall that one of the first items on Obama's agenda was control over student loans.)  Cash flow is king in commerce, and federal subsidies, direct or indirect, are king in academia. 

The Wall Street Journal recently included some pointed and salient "letters to the editor" that bring this game of academia into sharp contrast.  One can only hope that Ms. DeVos reads these offerings.  Some highlights are as follows:

Higher education costs are out of control because the law of subsidy is working.  When you subsidize something, you will get more of it and it will be come more expensive.  Every form of federally insured student loans is a subsidy, but not for students.  They're subsidies for the institutions that provide "higher education."  This increases the profit margin for the school, allowing it to increase staff, add fancy buildings and expand programs that wouldn't otherwise be profitable- to the school or the student.

Roughly 75% of costs at a college are labor. The teaching professor of lore is being cast out to be replaced by lower cost, contingent faculty. Any cost savings are more than offset by the addition of administrators with titles like, "Associate Provost for Investor Partnerships." These administrators, who never see the inside of a classroom, pull down comfortable six-figure salaries.

To attract increasingly sybaritic students, colleges and universities take on expensive amenities that make them appear more like resorts than institutions of higher learning. The more the schools spend, the more they are rewarded with new enrollees bearing tuition checks.

… a recent graduate from law school had accumulated over $300,000 in debt. This student's loan debt also includes home repairs, unexpected medical costs and health insurance bills which are allowed by the program.

...and...

Current tax law unfairly favors college endowments and the accumulation of endowment assets. The tax treatment of college and university endowments could also be changed to encourage additional spending from endowments on specific purposes (tuition assistance, for example). It is high time to consider enacting a payout rule requiring a certain percentage of funds be paid out annually in support of charitable activities and a tax on endowment investment earnings. Universities are big businesses – they should no longer be treated as sacred cows.  List of endowments

To the last point, add in the millions of dollars reaped from the many successful athletic departments that could actually go to cost reductions for education.  Dare I suggest such a thing?

Should education be free?  It certainly should approach that level, but the discussion must be from the reduction of costs direction rather than the game of increasing taxpayer subsidization.  Curious that this direction is never pursued.  Alas, there is no money in the proposition.

What did it cost to sit at the feet of Plato?  What changes from decade to decade in the instruction of language, math, history, most of literature?  Why the higher costs?

Administrative bureaucracy nests, feather bedding for administrators and instructors, construction projects ad infinitum, and golden pension and benefit packages are the natural end product of this stream of taxpayer money disguised as support for learning.  Those who promote this arrangement are also quick to point out that it is critical for our industries to import foreign workers educated elsewhere.  One might suggest a dissonance of logic in this position, for it promotes what also admittedly falls short in actual returns for such monies spent.

Student loans and grants pump money into this education chamber that also takes it upon itself to indoctrinate the malleable.  Foreign professors and left-wing faculties seem to delight in the reviling of American history and those figures who formed the nation, even as they feed from the trough filled by the success and forethought of those whom they now defame.  Curiously, those who preceded did so gratis, or nearly so.  Jefferson did not seek profit from the University of Virginia.  Those who are now excoriated on campus did not then seek financial reward or golden woven tenures with rainbow pensions.  The respective qualities of education and money seem inversely related.

The ivory towers and the ivied walls, the statues of great persons past, that hallowed alma mater and the professorial types shuffling between classes across the quadrangle – all combine to create and maintain the imagery of higher education in America.  But make no mistake about it: these are featherbeds for some and money machines for others.

Albeit that there is a strong distinction between private and public universities, all enjoy some measure of taxpayer subsidy.  Thus, and consequentially, we as taxpayers are entitled to notice, critique, and demand. 

A scheme of sorts has been cleverly plotted with federal grants, guarantees, and student loan authority.  (Recall that one of the first items on Obama's agenda was control over student loans.)  Cash flow is king in commerce, and federal subsidies, direct or indirect, are king in academia. 

The Wall Street Journal recently included some pointed and salient "letters to the editor" that bring this game of academia into sharp contrast.  One can only hope that Ms. DeVos reads these offerings.  Some highlights are as follows:

Higher education costs are out of control because the law of subsidy is working.  When you subsidize something, you will get more of it and it will be come more expensive.  Every form of federally insured student loans is a subsidy, but not for students.  They're subsidies for the institutions that provide "higher education."  This increases the profit margin for the school, allowing it to increase staff, add fancy buildings and expand programs that wouldn't otherwise be profitable- to the school or the student.

Roughly 75% of costs at a college are labor. The teaching professor of lore is being cast out to be replaced by lower cost, contingent faculty. Any cost savings are more than offset by the addition of administrators with titles like, "Associate Provost for Investor Partnerships." These administrators, who never see the inside of a classroom, pull down comfortable six-figure salaries.

To attract increasingly sybaritic students, colleges and universities take on expensive amenities that make them appear more like resorts than institutions of higher learning. The more the schools spend, the more they are rewarded with new enrollees bearing tuition checks.

… a recent graduate from law school had accumulated over $300,000 in debt. This student's loan debt also includes home repairs, unexpected medical costs and health insurance bills which are allowed by the program.

...and...

Current tax law unfairly favors college endowments and the accumulation of endowment assets. The tax treatment of college and university endowments could also be changed to encourage additional spending from endowments on specific purposes (tuition assistance, for example). It is high time to consider enacting a payout rule requiring a certain percentage of funds be paid out annually in support of charitable activities and a tax on endowment investment earnings. Universities are big businesses – they should no longer be treated as sacred cows.  List of endowments

To the last point, add in the millions of dollars reaped from the many successful athletic departments that could actually go to cost reductions for education.  Dare I suggest such a thing?

Should education be free?  It certainly should approach that level, but the discussion must be from the reduction of costs direction rather than the game of increasing taxpayer subsidization.  Curious that this direction is never pursued.  Alas, there is no money in the proposition.

What did it cost to sit at the feet of Plato?  What changes from decade to decade in the instruction of language, math, history, most of literature?  Why the higher costs?

Administrative bureaucracy nests, feather bedding for administrators and instructors, construction projects ad infinitum, and golden pension and benefit packages are the natural end product of this stream of taxpayer money disguised as support for learning.  Those who promote this arrangement are also quick to point out that it is critical for our industries to import foreign workers educated elsewhere.  One might suggest a dissonance of logic in this position, for it promotes what also admittedly falls short in actual returns for such monies spent.

Student loans and grants pump money into this education chamber that also takes it upon itself to indoctrinate the malleable.  Foreign professors and left-wing faculties seem to delight in the reviling of American history and those figures who formed the nation, even as they feed from the trough filled by the success and forethought of those whom they now defame.  Curiously, those who preceded did so gratis, or nearly so.  Jefferson did not seek profit from the University of Virginia.  Those who are now excoriated on campus did not then seek financial reward or golden woven tenures with rainbow pensions.  The respective qualities of education and money seem inversely related.

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