"Carey talks about how colleges spend a lot of energy on what he calls "gilding" – pouring money into superficial symbols of prestige, everything from new buildings to celebrity professors, as part of a "never-ending race for positional status."
"What you see is that spending on education hasn't really gone up all that much," he says. "It's spending on things like buildings and administration. ."
One reason they do the gilding is to increase their ranking - which itself has problems. Rankings are primarily based on selectivity and prestige, which is sort of like judging that a hospital is better because of how healthy the patients are when they get there, not how much healthier they got while they were there: http://www.newyorker.com/reporting/2011/02/14/110214fa_fact_...
In the limit, they would simply disappear. There wouldn't be any humanities faculty, aside from the independently wealthy, because nobody could make a living at it.
I don't think most humanities faculty are paid well. Perhaps the top few at the top schools, but the dropoff is enormous.
A better question may be is it worth it for the government to subsidize research for humanities professors? Or should humanities teachers have regular 9 to 5 teacher jobs?
A better question may be is it worth it for the government to subsidize research for humanities professors?
Where is all of this filthy lucre that the government is throwing at humanities professors? I would like to get some. The only federal body that funds pure humanities research is the National Endowment for the Humanities, which has a grand total of $150 million by way of annual budget. I.e. essentially zero.
Or should humanities teachers have regular 9 to 5 teacher jobs?
Perhaps HN commenters should have regular 9 to 5 jobs.
That comment is very misleading. The subsidy being talked about is not research subsidies, which pay lab costs and grad student stipends, not professors. Instead it's about tuition assistance in the form of student loans and grants. That's the subsidy that actually pays humanities profs.
If loans were given out on a ability to repay standard, instead of govt guaranteed, humanities would get fewer loans, therefore, govt loans are subsidizing humanities faculty
There was a contention that the government subsidizes humanities research. I demonstrated that, barring the rounding error that is the NEH, it does not. You reply that yes in fact the government does subsidize humanities teaching. I don't even know what to do with that.
Anyway, if loans were given out on an ability to repay standard then the biggest losses would be to health professions, criminal justice, early childhood education and other non-prestige career degrees toward which low income students tend to gravitate.
1) Schools are non-profits everything they do is subsidized.
2) Student loans subsidize schools.
3) State schools have in state subsidies.
If a professor is writing and researching, that is time and focus not spent teaching. If tenure is granted primarily on research, teaching suffers.
To those who think the status quo is fine, I ask: Are we in the correct balance of teaching and research in the humanities? If yes, how did we get there? And if there are strong cases for humanities research, why not more?
My opinion is much of what appears to be advancement of knowledge is really a system of misplaced incentives. You see this in teaching loads and overproduction of qualified humanities faculty relative to high school teachers.
Law, art, literature, research, politics - there are lots of posts that require someone be capable of focused effort and thought. Perhaps it doesn't suit their current knowledge but they could learn new things - it's not like learning's hard if you're reasonably smart and able to sustain an interest.
Whether you think they just turn out nonsense or not they're in a fairly competitive environment and have managed to make a living there.
>College is without a doubt a worthwhile investment that pays off over time in increased earnings and a better quality of life. If anything, a college degree may be getting even more valuable.
"Without a doubt", eh? I have doubts. Are we that sure the causality arrow goes that direction? If I had to bet money I'd say it goes the other way - college is more likely to attract people who will have higher earnings and a better quality of life.
> College is without a doubt a worthwhile investment that pays off over time in increased earnings and a better quality of life. If anything, a college degree may be getting even more valuable.
Should it surprise anyone that it is expensive to buy an investment product whose returns get better and better-known?
In some cases it does. The University of California system has managed to scale up reasonably efficiently, with expenses growing more slowly than enrollment, thereby reducing the per-student cost of education. The result is that there's been an overall cost decrease of around 25% (in real terms) over the past ~40 years, if you take the total UC budget and divide by total enrollment.
The reason tuition (i.e. price charged to students) has gone up, even though the cost of providing the service has gone down, is that state funding has fallen even further than costs, more like 60% [1], so a larger portion of the cost is now charged to the student. For public institutions, at least, it's important to distinguish between the total cost of providing education vs. the amount charged to students, which are numbers that don't always move in the same direction.
Normally resubmitting would have just upped the vote count but the submitter tacked something on the the URL and it wasn't recognized as a previous submission.
Student loans were exempted from bankruptcy, allowing banks to make riskier loans (more students, higher amounts). Colleges soon followed with increased tuition to match student's new ability to pay.
It's gotten progressively tougher since the '70s, starting with med/law school debt.
> Before the mid-1970s, debtors were able to get rid of student loans in bankruptcy court just as they could credit card debt or auto loans. But after scattered reports of new doctors and lawyers filing for bankruptcy and wiping away their student debt, resentful members of Congress changed the law in 1976.
> In an effort to protect the taxpayer money that is on the line every time a student or parent signs for a new federal loan, Congress toughened the law again in 1990 and again in 1998. In 2005, for-profit companies that lend money to students persuaded Congress to extend the same rules to their private loans.
One hypothesis: the Bayh-Dole Act of 1980 [1], which allowed federal grantees to own the intellectual property developed with federal funds. Prior to this Act, all IP made with federal funds belonged to the government.
As R&D is extremely expensive, one theory is that colleges raised their tuition to help cover the venture capital requirements of research.
I'm not certain this makes sense. Why would they need to raise tuition if the venture capital requirements were covered by the feds anyway? Moreover, typically gov't granted departments are helping pay for other departments through overhead, not the other way around.
I don't think federal grants cover the research costs completely. For example, if my professor wins one grant, part of the money will be put aside for to cover 10% of his salary. He certainly doesn't have 10 big grants in play at any given time, so the remainder has to be offset by the University.
Add to that, you need a lot of overhead like administrative assistants, grant managers, technology transfer officers.
I would be surprised if your professor's research tab is partly covered by the university unless they are using startup funds as a new faculty hire. The universities I've been at all (Caltech, MIT) have a significant "overhead" charge against all incoming grants to cover the cost of university infrastructure, keeping the lights on, etc. So it is research that is subsidizing the university, not the other way around.
The last sentence is somewhat questionable, except at the top universities. Only at the most grant-successful universities does the overhead actually break even in recouping the extra outlays universities put into research. Examples: construction of research-specific laboratory facilities, co-financing of expenditures they wouldn't have otherwise undertaken (many grants require co-funding), increased salaries and hiring packages caused by bidding wars for faculty who have successful grant-getting records, department backstopping of PhD stipends when a large group has a dry year grant-wise, salaries for grant-writing assistance and research-support staff, etc., etc.
NIH keeps its overhead negotiations secret, but I know that The Scripps Research Institute, is currently at about 85%, schools like Harvard, MIT, and Caltech, Berkeley, Stanford, are hovering around that value right now, although IIRC in the past TSRI got 100% and there are rumors that some places got >100% overhead; the government in its budgetary crunch has begun reducing these figures.
DOE is slightly more parsimonious with its overhead, NSF is the most conservative. DARPA gives overhead in all sorts of ranges. Or so I hear.
And TSRI doesn't give most of its professors salary, unless they are doing "administrative duties" (Pres, VP, dept chair, etc) If you run out of grants, you basically don't get paid anymore. At one point ~90% of TSRI operating costs were run off of NIH overhead, all coming in from a very dynamic patchwork of grants from all of their PIs. I think then the pressure to keep getting grants made the place a bit of a boiler room, there was an uptick in shady science (Peter Schultz's retractions, Geoffrey Chang's retractions, and others I'm not ready to talk about yet)... Eventually professors started leaving because they didn't want to take it anymore.
that may be true for nonprofits, but that is not correct for federal science grants. Overhead is calculated as what % of the nominal amount you ask for is added on top for facilities. So a 100,000 grant plus 20% overhead costs 120,000. A 1M grant plus 60% overhead costs 1.6M.
That's because an agency like the NIH, will have a program project and decide, "ok. We want project X to be done and we think it will take ~150,000 in JUST science costs" - in theory, that should be more or less invariant across the institutions that get funded. THEN an added cost is what it takes for it to get done in X institution. If overhead were calculated as % of the full grant, then the math gets trickier to isolate the "invariant science part".
The reason why separating the "invariant science part" is important, is because when the agencies send out an program call, they say, "you get $2M to do the science", and each institute that is bidding to get the grant is not supposed to know how much of that gets taken up by overhead by other institutes. The net result is each institute is competing for the same pool of "we can do science with this" money without the PIs having to worry about how much of the cookie gets eaten up by their own institute. In general, I don't really like much of anything to do with the federal government's involvement with science, but: The way this is structured is probably a good thing, since scientists are really bad at thinking about much besides their own science, and if you make them do this mental gymnastic, something's going to come short, and there will probably be more failure all around from lack of funds. The responsibility to figure out how to get that administrative cost then falls on the program manager - and the grant reviewers are instructed to take overhead into account.
Can you give some examples or numbers for this? I find it hard to believe that this alone (or at least in large part) lead to such an increase in tuition. Most STEM research is still funded by the federal government (through the NSF, DARPA, NIH and similar agencies). Many research projects don't require venture capital, because they're not really marketable.
Certainly. I haven't reserached this issue much, and while certainly other factors come into play, I suspect that Act does have an impact.
I used the word "venture capital" loosely. I do not refer to the traditional sense of VCs on sand hill road, but venture capital in the sense of money that can pay for extremely specialized and expensive research equipment and labor.
In general, the Harvardization ("we must be the best at all areas of research") has infected even second-tier research institutions; for places like Harvard, MIT, etc. the financial gains from patents probably outweighs the outlay. However, for second-tier research institutions, they may be simply caught up in a ratings arms race.
'Over the current era, this has produced a pronounced intensification of research. For
99 research universities, enrollments grew by 15 percent from 1980 to 2000, but real research
expenditures grew by 128 percent (Geiger, 2004, p. 147).'
From the link you shared, I assume the relevant chart is the one on page 14, showing the growth of university research expenditures. What I couldn't find in the text (maybe I missed it) is the source of those funds; I think that most of it is paid not by universities, but by the federal government through various agencies. Like another commenter said, the university also receives money from research grants (as overhead), they don't have to pay anything except maybe the professors' salaries.
A growth in "Research Expenditures" doesn't necessarily mean that universities are spending more money on research.
As an anecdote, here's my personal example. As a PhD student in CS at a public US university, my experience has been this: all our equipment (mostly computers, CS is relatively cheap) has been paid from grants, and I have been funded from 3 sources: a 1-year federal fellowship (FAFSA), 1 year as a TA (that one was funded by the university, but in exchange for teaching) and the rest on a federal research project.
Now, it is possible that richer private universities do pay for their own equipment and researchers. I don't have any numbers for that, though.
On the other hand, if you are J6P and borrow the money you don't pay the cost, you pay a (fixed) monthly loan bill.
To about one sig fig, in constant dollars, at 20% interest aka 1980, you can borrow $30K for the same monthly payment as $150K at 3% aka 2010. Doesn't matter if they're "profit" or "non-profit" they're not leaving money on the table. Then factor in perhaps a factor of 4 in real world cost of living and nominal wages, and you can easily go from $3K in 1980 to $60K in 2010 without any "unhinging" happening at all.
Those are multi-generational extreme interest rates. It'll be "fun" to watch them revert to norms over a long enough run.
Its the same deal with property, for obvious reasons. The median dude will get the median education and live in the median house. The bank will get a constant median monthly payment. The centrally controlled interest rate will control what the providers get, but it won't affect joe6pack at all.
Can we agree there is a distinct and dramatic difference between public and private colleges? Should we even be talking about them in the same context? This seems to be much more of a private college bubble.
Public and private research universities had increased revenue from services like hospitals as well as from the Federal government, yet raised tuition to further increase costs. Other private institutions (such as liberal arts schools) have less revenue from their endowments and alumni gifts. They are charging higher tuition to both make up for that revenue and fund additional spending. To make up for less state funding, however, non-research public institutions are both raising tuition and spending less.
In other words, everyone is getting tuition increases, but only community colleges and lower-level state colleges are actually seeing a cutback in programs. That actually makes me kind of physically sick.
Although that's the effect that is immediately obvious to the end-customer, the student, in actuality "raising tuition and spending less" creates something more sustainable. They will actually be less dependent over time compared to other institutions. This is an example of institutions downsizing with short-term consequences rather than continuously expanding with longer term consequences.
I think we shall see a break between the desire for universal education, the public good of strong research and the pandering to powerful middle class votes.
100 years ago universal education ended between 12 and 14 years old and only the rich or the brilliant went on to further education. Now we are heading to a situation where further education is seen as the minimum universal education. (Something like 50 % of students are expected to attend college)
this effectively reduces most colleges and courses to an extended High School, with the expected ROI of the same.
whereas as a society we want to have only the most brilliant and motivated working on pushing out boundaries of knowledge - basically please invent the future for us.
and this will lead to two tier colleges - one that act as schools and one that act as universities.
we cannot allow the universities to be contaminated by rich idiots, or pushing research out with floods of high schoolers
so ... we should look to soviet Russia - who simply took the best minds and put them in college. publically funded, strict entrance criteria.
everyone else - publically funded colleges that manage to push the ROI down to zero.
I'm going to have to disagree with you here and say we shouldn't become more like Soviet Russia.
The goal should be improving our schools for everyone not conceding this is the best we can do and only let in the gifted few who meet our "requirements".
Would Steve Jobs have been allowed to drop in on Calligraphy classes in Soviet Russia? I doubt it.
The point being when you build a great system and give people the ability to explore it you arrive at much more creative outcomes which therefore provide much better growth potential to the overall economy then a "fit into a specific box we already created for you" approach.
You don't seem to take in account the reality when comparing today's education with the one of the last century. In the last century there was a strong need for manual labor, now - not so much. There is a reason, you see, why people throng the higher education today, and why the education's gatekeepers confidently tax them for the way in.
I don't know, the children of our nomenklatura do pretty well already.
I also don't think that your picture of 100 years ago is quite on the mark. Good solid students who were not neither brilliant nor rich (by the common understanding of the word) did manage to get degrees.
this will lead to two tier colleges - one that act as schools and one that act as universities
That already pretty much exists. Strictly speaking I think the dividing line is whether or not you can get a PhD at the school in question; in casual speech, "university" vs. "college" sometimes approximates the distinction.
Note that some "colleges" can provide an arguably superior education than some lower-end public universities because professors are chosen and paid for their teaching ability rather than their research.
Quite a few non-PhD granting colleges offer superior education (not even arguably superior, just superior) than all but the highest tier research universities, public or private.
I won't pick too many examples lest this gets bogged down haggling over details, but basically, Swarthmore.
Correct, it does already exist and it's even more diverse than you indicate. Community colleges (2-year), state colleges, private colleges, state universities, and private universities. All on a continuum, with a fair bit of overlap between categories.
I'm sure everybody that attended a top school has a story about the rich flunky down the hall, but it's still the exception, not the rule.
All government policies on both sides for decades has been designed around the intentional, orderly destruction of that group. So basing a business model on a group the government is trying its best to destroy is not going to work out well.
>Something like 50 % of students are expected to attend college
More like 100%, if we're merely talking about expectations. A third or so graduate, and about a tenth or less have a job actually benefiting from the skills taught, aside from supply and demand credentialism.
Most likely future appears to be rather than emulating the rich and brilliant by going to school, thus the middle classes send their kids there to try and become rich and powerful, we as a culture will just find another "rich and powerful" thing for our non-rich and non-powerful to try to emulate. Perhaps evangelical religion, or ownership of smartphones, or living in a fashionable neighborhood (SV?) or some paid social media "friends" or something like that. I think it highly unlikely that shifting social trends merely result in fine tuning of a bubble. Think of womens high fashion clothing... that never varies in minor shifts of the exact tone of mauve, but dramatic changes in type, shape, color, and texture. Its very unlikely that a giant bubble/fad will pop with mere minor tinkering.
Please use a responsive design for your blog. I rarely get to read them because they are difficult to read on the phone, but they are fantastic and would be great to read on the go.
For what it's worth, most of the data in these charts is false and/or misleading. If you read the actual primary sources that this post purports to use, you'll see the situation isn't actually nearly as bad as presented. It is somewhat more difficult to pay for college than it was in, say, 1970, but the 'statistics' here are wildly exaggerated.
The weak job market is a much bigger issue than the increased cost of college.
This post would be more interesting if you had some analysis. Its odd that you did so much legwork, without a single example of 'statistics'. Got something? Post up a counter-example. Or even just a regular example !
But again their primary sources are fine, they're just not being honest about what they say. You'd be best off just reading the data from the NCES, College Board, etc.
As a rule of thumb, conservative ideology is mostly based on theories that have no basis in reality, whereas liberal ideology is mostly based on facts that have no basis in reality. This is a good example of the latter.
But again their primary sources are fine, they're just not being honest about what they say
I only skimmed the article, but it seems like you are saying the data in the charts is OK but you don't like the text (?) If that's the case, why not make a more specific critique?
At its root, the thesis of the article seems to be there is a data-driven correlation with debt availability and COGS at universities. Notwithstanding the obvious similar correlation with Revenue.
I could check a regression, but the eyeball test looks pretty good. Personally, I thiked the author missed the mark. He should have run a correlation of student debt to university endowments.
That (time series) would be an even more interesting eye-opener.
Need I mention "stratify the data"? If your technically unclear, I can be more specific. For example, student debt issuances (flows), not retained balances. edit: just for fun
==================
2011 Endowment vs 1994 corrected for inflation. These are dollar variances. 100-->156 with inflation. If a school goes from 100 to 200, this would measure 46. Below data is the EXCESS in BILLIONs vs 1994. This is incremenatl wealth accumulation, the gross changes (typically 5x) are the second figure. Endowments are approximately at 3x wealthier following this massive inflow of cash, corrected for inflation.
1) Harvard University (MA) $22.6 up 516% raw
2) Yale University (CT) $13.9 up 548% raw
3) Princeton University (NJ) $12 up 505% raw
4) Stanford University (CA) $12.4 up 611% raw
5) Massachusetts Institute of Technology $7.1 up 571% raw
^ Its worth pointing out that these "Non-profits" show financial returns on capital far in excess of "profitable" companies. corrected for inflation, school's capital is out-performing GDP growth by ~600 basis points, over a sustained period (multi-cyclic, etc).
Endowments don't generally come from tuition, and are only partly spent on scholarships/resources for undergraduates, so I don't see what this would show us. Especially since only a tiny percentage of colleges have significant endowments.
You have an interesting lack of intellectual curiousity. Last time I checked, 37 college presidents were being paid over $1MM/year in salary. Where is that money coming from? Not the endowments? Your right. Its coming from students, who are basically laundering the government loans, into tuition to support operating costs of the colleges. Money is fungible, in that regards.
It seems as though the problem is more acute in private colleges. Public colleges just don't seem to be growing in price as much as private colleges. It seems like one solution to the issue of rising college costs is for us as a society to place less emphasis on pricey private colleges.
Bubba can afford a $700/mo loan payment. In 1980 at 20% interest that means he's going to pay the university $30K. There's no way they're charging a penny less than he's capable of paying. Now run the numbers in 2010 at 3% and at $700/mo there's no way the university is going to charge a penny less than $150K. Either way its the same monthly payment, so what does Bubba care?
Works pretty much as interest rates steadily smoothly collapse to a multi-generational low. Not so much fun for the big players as interest rates revert to historical norms (or spike up to just as high of an unusual outlier)
A long term loan is a long term loan. Doesn't matter if we're talking about school or house.
"Carey talks about how colleges spend a lot of energy on what he calls "gilding" – pouring money into superficial symbols of prestige, everything from new buildings to celebrity professors, as part of a "never-ending race for positional status." "What you see is that spending on education hasn't really gone up all that much," he says. "It's spending on things like buildings and administration. ."
One reason they do the gilding is to increase their ranking - which itself has problems. Rankings are primarily based on selectivity and prestige, which is sort of like judging that a hospital is better because of how healthy the patients are when they get there, not how much healthier they got while they were there: http://www.newyorker.com/reporting/2011/02/14/110214fa_fact_...