Here is an interesting graphic from the Chronicle of Higher Education by Beckie Supiano and Soo Oh that discusses the difference in measuring family income by the U.S. Department of Education and by the wealthiest schools.
Athletic success can increase athletic donations, but for schools who want a shortcut to success, it rarely translates into academic progress.
For most schools, some evidence points to an increase in donations from athletic success. However, those donations go toward athletics programs. And, to the extent that fundraising focuses on new athletic facilities, it can crowd out funds for academics. It’s difficult to get alumni excited about new equipment for the physics department when the university president wants a football stadium.
The poster boy for success is Notre Dame: a strong academic program and strong (independent) athletic program. Yet, for every Notre Dame, a dozen schools seek athletic success, but only gain subpar academic performance and higher student fees and tuition. Boise State Universityhas achieved notoriety for its football prowess, but its four-year graduation rate is 11 percent, and its six-year rate is 38 percent. It has remained in or near the bottom 150 colleges on Forbes’ Top Colleges list, along with many other schools striving for prestige through sports.
Proponents of college athletics dismiss the criticism, and most athletic directors say that athletic and academic fundraising isn’t a zero-sum game. Success in sports, the argument goes, promotes the university’s reputation and attracts students. That holds for some powerhouse universities such as Ohio State (whose revenues outpace spending), but universities in conferences such as the ACC or MAC levy mandatory athletic fees on students, which can approach $1,000 per year. Athletics at Kent State University receive a 77 percent subsidy. Eastern Illinois University operates with a subsidy approaching 73 percent. In 2013, according to USA Today, 154 universities operate their athletic programs with at least half the funding from subsidies. The subsidies come from student fees, direct and indirect institutional support, and state money. However the ratios, students and taxpayers cover the vast majority of athletic spending.
University missions differ, and one can’t expect a Big 10 university to act like a regional university. However, it’s improper for the regional university to act like an SEC powerhouse and subvert an academic mission to the altar of the athlete.
Donations for athletic projects, moreover, tend to consume other funds. The recreation centers, stadiums, and other infrastructure gives a campus grand buildings, but maintenance and upkeep are overlooked. Those expenses fall on the students, regardless of the administration promising student fees will not be used in such a manner. In 2012, for instance, Ohio University announced plans to build a multipurpose center with an indoor football field for practice use. Though officials vowed it would be paid for by donations, an $800,000 shortfall prompted the administration to allocate funds from the student general fee to finance the project.
Universities advertise such projects as sources of civic pride — and it doesn’t come cheap. In 2010, the University of Akron built a $60 million stadium, while Colorado State University aims for a $220 million stadium to be built by 2016 (with half the funding raised through private donations). Such anecdotes are numerous. As grandiose athletics projects provide tangible examples of university presidents taking action on campus, students realize they have no input on how their money is spent and benefit little from them.
Increased spending on athletics isn’t always harmful to universities. Some evidence shows that a spillover effect holds, rather than a crowding out effect. For the majority of college students, however, university desires for athletic success hold some blame for rising student fees and tuition. Universities attempting to improve their quality, rigor, and prestige should realize that students with less debt and more knowledge promote their image better than a trophy on a dusty shelf.
Post originally appears on the CCAP contributor page for forbes.com in conjunction with the Forbes/CCAP release of “America’s Top Colleges”
Michael DeBow will join CCAP as the associate director tomorrow, August 1st. We are excited to welcome him and his unique talents to our team. CCAP has come a long way since its founding by Dr. Richard Vedder in 2006. DeBow is another exciting step along the journey, ushering in a new age for the Center for College Affordability and Productivity.
Below is the press release on this topic. Please share and spread this news!
CCAP Hires Associate Director: Michael DeBow
The Center for College Affordability and Productivity (CCAP), a Washington, D.C. based research center primarily interested in issues relating to the economics of higher education, announces that Professor Michael DeBow will assume the role of Associate Director effective August 1st. Professor DeBow will assist Director Richard Vedder in fulfilling the Center’s mission. DeBow will continue to serve as a Professor of Law at Samford University’s Cumberland School of Law.
DeBow joined the Samford Faculty in 1988. He teaches courses in real property, business organizations, administrative law, legislation, and local government law. In addition, he has served in a part-time capacity to two Alabama attorneys general – Bill Pryor and Luther Strange. He co-founded and co-edits the Federalist Society’s annotated bibliography of conservative and libertarian legal scholarship, and its pre-law reading list.
Michael holds bachelor’s and master’s degrees in economics from the University of Alabama, and a law degree from Yale University. His professional career included a stint in private practice; a judicial clerkship with Judge Kenneth Starr of the U.S. Court of Appeals for the D.C. Circuit; and tours of duty with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice, during the Reagan Administration.
CCAP, founded by Richard Vedder in 2006, is a nonpartisan research organization primarily devoted to exploring ways to increase efficiency and affordability in America’s universities. In particular, it emphasizes the role that markets and non-governmental institutions can play in bringing more affordable, higher quality higher education. The Center publishes studies, writes shorter commentaries for newspapers, magazines, and the Internet, does rankings of colleges and universities for Forbes, participates and helps organize conferences, etc. Two highly regarded recent CCAP studies include Dollars, Cents, and Nonsense: The Harmful Effects of Federal Student Aid, and Why Are Recent College Graduates Underemployed? Dr. Vedder and other CCAP staff appear frequently in radio and television interviews, including such NPR shows as Morning Edition and All Things Considered, the Laura Ingraham and Bill Bennett talk radio shows, Fox News programs with John Stossel and Neil Cavoto, the PBS News Hour, as well as appearances on ABC and NBC nightly news. Articles by CCAP staff have appeared in the Wall Street Journal, New York Times, Washington Post, National Review, Chicago Tribune, Los Angeles Times and USA Today, to name but a few.
Forbes and CCAP rankings of America’s Best Colleges was published today, with Williams College taking the top spot, and four other liberal arts schools in the top 10. Simultaneously 7 of 8 Ivy League Schools do worse this year than in 2013.
The Rise of the Liberal Arts
Forbes released the 2014 ranking of America’s Best Colleges at 9:45 this morning. Sitting atop the list for the third time in five years is Williams College. Interestingly, four other liberal arts colleges join Williams in the top ten, claiming five of these top spots: Swarthmore College (No. 3), Pomona College (No. 8), United States Military Academy, West Point (No. 9), and Amherst College (No. 10). This is an increase from last year’s list, which featured Pomona College as the top liberal arts college at No. 2 overall, and only three of the top ten being liberal arts schools.
It is common to hear an emphasis for STEM (Science Technology Engineering and Mathematics) degrees, which research universities churn out very efficiently, but is this the best education for undergraduates? Our ranking, based on outputs rather than inputs would suggest that this may not be the case. Smaller, liberal arts colleges are concerned more with educating students than their research giant counterparts. Their prestige is derived almost entirely from the quality of graduate they produce. Therefore it is not unreasonable to think that they would do well in this year’s ranking.
Stanford University fell out of the top spot, to number 2 this year. Similarly, many larger research universities fell in the ranks. A major contributing factor: This year’s PayScale data dis-included anyone that continued onto an advanced degree. This means that if a student is educated at a state school like the University of Virginia, then went on to get a master’s degree later they would not count in the PayScale sample. In other words, we can state that because the Liberal Arts colleges fared much better this year than before this distinction was made they do a better job producing top notch bachelor’s degree holders than do larger research universities.
The Fall of the Ivy League
Largely considered the nation’s best institution, Princeton University finds itself outside of the top three for the first time since we started ranking colleges in 2008, finishing fourth overall. Princeton, however, is not the only Ivy to have fallen this year. Yale fell from fourth last year to sixth this year; Pennsylvania from 11th to 12th; Brown from 12th to 13th; Dartmouth from 16th to 18th; Columbia from 5th to 20th; and Cornell from 19th to 31st. In fact, Harvard University was the only Ivy League school to do better this year than last, rising from 8th to 7th.
Last year the Ivy League claimed four of the top 10 — six of the top 12 — spots. This year they only took three. The CCAP and Forbes ranking is unique; institutional prestige, which serves to keep the “ancient eight” and other like universities at the top, does not factor into the rankings.
Non Ivy Research Universities
Stanford University, number 2, and Massachusetts Institute of Technology (MIT), number 5 round out the top 10. Other non-Ivy League research universities that cracked the top 25 this year include Notre Dame (No. 17), California Insitute of Technology (No. 21), Duke University (No. 23), University of Chicago (No. 24), and Tufts University (No. 25).
Money Magazine released a list of the best colleges and universities for your money earlier this week. Who ranks as #1 in this ranking? Babson College, a school dedicated to teaching its students business and entrepreneurship. While the BBA (Bachelor of Business Administration) is the only degree offered at Babson, students see high return on investment and according to Money Magazine’s story, receive an education in the Liberal Arts as well.
We too are in the college ranking business. Each year since 2008 CCAP has joined forces with Forbes Magazine and forbes.com to provide a list of America’s Best Colleges. Our list pioneered what is now beginning to catch on with other similar publications: an output based ranking of colleges. When we began ranking, we were largely U.S. News and World Report’s only competitor in the college ranking business. Their rankings, based largely on prestige, student quality, and selectivity, did not factor in output measures that are so crucial today.
We are very happy to see Money Magazine produce this list as it shows a shift toward our way of thinking: Outputs, debt load, satisfaction, and value added matter. It is also nice to see that we have an ally in the use of ratemyprofessors.com and payscale.com, services that we have been using to rank for a number of years now and have taken some flack over.
One qualm I have with Money‘s ranking is that it uses a six-year graduation rate, rather than the traditional four. More and more we are moving away from the traditional notion that a bachelor’s degree is attainable in four years, a shift that we are strongly against. When calculating expected net price it is important that people actually get through in four years.
First appears on Forbes.com on July 11, 2014 here.
As public university presidents never seem to leave their high-salaried positions, the University of Texas at Austin has agreed to keep their controversial leader for another 11 months. On Wednesday President William C. Powers Jr. and University of Texas System Chancellor, Francisco G. Cigarroa came to an agreement extending Powers’ tenure. A formal “resignation” will take effect June 2, 2015. According to the Chronicle of Higher Education, it was Powers’ supporters who helped him sidestep Cigarroa’s ultimatum, “resign by July 4, effective October 31, or be fired.”
Powers came under fire from Governor Rick Perry in 2008, challenging Texas Universities to decrease the cost of degrees by cutting waste. The Chronicle explains that Powers responded by seeking out Perry’s political supporters to in the University Development Board to destabilize the Governor’s political security. As he diminished the Governor’s position, he secured his own. Powers credits this support with having a big influence on the outcome.
Governor Perry, however, was slow to notice spending levels in Texas. In 2011, CCAP criticized the University of Texas system for its wasteful spending. From the executive summary:
Recently released preliminary data from the University of Texas strongly suggest that the State of Texas could move toward making college more affordable by moderately increasing faculty emphasis on teaching. Looking only at the UT Austin campus, if the 80 percent of faculty with the lowest teaching loads were to teach just half as much as the 20 percent with the highest loads, and if the savings were dedicated to tuition reductions, tuition costs could be cut by more than half.
On July 8th, Richard Vedder weighed in for Minding the Campus, speculating that Powers might receive a one-year extension as a face-saving alternative while the system searches for a replacement. Vedder said that if the school wants to enjoy autonomy from the board of regents and governor, it should consider becoming a private institution. Supporters of Powers’ spending practices claim that UT-Austin receives 12 percent of its money from the state; if public support is such a low percentage, perhaps it’s best for all parties involved for the university to privatize.
If Powers was able to override this first “coup” attempt with four days of the initial resignation demand, don’t be surprised if June 2nd, 2015 is not the last we see of President Powers in office. All the while, University of Texas students suffer from increasing costs that serve to protect the research prestige of the university, rather than promote academic advancement and learning.
In a study for the Competitive Enterprise Institute, The High Cost of Big Labor: An Interstate Analysis of Right To Work Laws, CCAP Director, Richard Vedder, and former Research Associate, Jonathan Robe, analyze the effects of right to work laws on state economies. The Conclusion: “RTW (Right to Work) states tend to be vibrant and growing; non-RTW states tend to be stagnant and aging.” You can read CEI’s story on this publication here.
Co-authors Andrew Erwin and Marjorie Wood discovered student debt and low-wage faculty labor rose faster at state schools with the highest paid presidents than the national average. Moreover, administrative spending surpassed scholarship spending by more than 2 to 1 as full-time faculty declined as a percentage of full-time equivalent (FTE) faculty.
Following the fall 2008 financial crisis we expect to see drastic reductions in overall pay – especially at the executive level. This is not the case. In the “top 25” presidential pay rose from $727,002 in 2009 to $974,006 in 2012 – an average inflation-adjusted increase of 34 percent in only 3 years. Comparatively, the American Association of University Professors reports full-time professorate pay at public and private research universities rose 2.2 percent and 7.2 percent, respectively, from 2007-08 to 2013-14.
The growing disparity between top 25 executive and faculty pay illustrates that universities are becoming more corporate. Accordingly, the AAUP opines:
Disproportionate salary increases at the top…reflect the abandonment of centuries-old models of shared campus governance, which have increasingly been replaced by more corporate managerial approaches that emphasize the “bottom line.”
Professional employees are now the largest group of non-instructional staff on campus. The Delta Cost Project estimates these positions (Business analyst, human resource officer, admissions officers among others) rose, on average, 2.5 to 5 percent per year between 2000 and 2012 and now comprise nearly one fourth of the on-campus workforce.
Administrative spending has similarly been disconcerting. Spending per student for administration had increased 61.2 percent between 1993 and 2007 according to a recent Goldwater report. CCAP backs this claim, showing that college administrative expenditures have grown faster than educational expenditures. Benjamin Ginsberg, professor of political science at Johns Hopkins University, griped that administrative spending between 1947 and 1995 had increased 235 percent, inflation adjusted.
These complaints have been overlooked while the growing rift between faculty and administration poses a threat to higher education. Faculty are upset seeing their universities increase administrative spending and power. Administrators respond by suggesting increasing enrollments and heavier federal mandates are to blame. Whatever the cause, higher education is no longer an institution – it’s an enterprise.
Dr. Richard Vedder and Dr. Alan Krueger of Princeton University’s and Former Council of Economic Advisers Chairman weigh in on the minimum wage debate on “Bloomberg Surveillance.” Vedder claims “there will be some gainers to be sure, there will be some people who will make two or three or four dollars per hour more than they are currently making and they will benefit, but there are others that may go from employment, to unemployment.” Dr. Krueger’s research shows “moderate increases in the minimum wage primarily help low wage workers.” The question remains, what is moderate, and where is the inflection point at which increases in minimum wage in turn decrease the welfare of low wage workers.
Watch the video from Bloomberg TV below:
Richard Vedder participates in a panel discussion, moderated by the American Enterprise Institute’s Alex Pollock. Together with Andrew Kelly of AEI, Matt Chingos of Brookings Institute, and Jason Delisle of New America Foundation, Richard Vedder discusses how the current federal financial aid system has directly led to increased costs of college tuition. Richard points out eight deficiencies with the current financial student assistance programs, which are discussed at length in the recent CCAP study: Dollars, Cents and Nonsense: The Harmful Effects of Federal Student Aid.
“What if that rate of tuition increases had continued after 1978 instead of the 3 to 4 percent increases actually observed? What would tuition fees be today? About 59 percent lower. State universities charging $10,000 in-state fees (a common fee today) would instead be charging a bit over $4,000.”
View the full discussion below.