Colleges and Universities: Our Most Pampered State Agencies

May 20, 2014

Inside Insight

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colleges and universities

AREN’T “PUBLIC” THINGS SUPPOSED TO SERVE THE PUBLIC?

 

Why has higher education at allegedly “public” institutions become so expensive? At least eleven major books and countless articles have tried to answer that question in just the last three years. At Clemson, in-state tuition and fees have reached $13,382, and that’s not including books, room and board, and other expenses. The University of South Carolina isn’t far behind, at $10,791 per year, and the College of Charleston is just a smidgeon behind that, at $10,230 per year.

 

These prices are around double what they were a decade ago, and exponentially more than they were 30 years ago.

 

The reason for the increase can’t have much to do with an increase in the quality of the educational product parents and students are buying. By any measure the quality has gone down. Many disciplines are wracked with political correctness; faculty are hired based on research prowess rather than their ability to teach; and a college degree is now yesterday’s high school diploma – a necessary achievement, to be sure, but not one guaranteed to land its possessor a job.

 

The argument one often hears from state university spokesmen is that state budgets have cut higher education, and public schools have been “forced” to make up the difference in tuition hikes. Now it’s true that state colleges and universities have the luxury of tapping new sources of revenue simply by hiking tuition and fees. Other state agencies don’t have that luxury: If the Department of Parks, Recreation, and Tourism hiked park entry fees as fast as state universities have increased tuition, people would stop going to state parks, or go to the ones in Georgia and North Carolina. That revenue source would decline. College students, however, will rarely decide it’s not worth it to attend college, and paying out-of-state tuition at another state’s public college wouldn’t make sense.

 

Even so, “cuts” to state budgets don’t account for the rise in public school tuition. Across the nation, state budgets have largely kept pace with inflation, and during the most recent recession, federal stimulus funds replaced what modest cuts were imposed.

 

One reason public colleges cost so much, of course, is the same reason private colleges cost so much: government pays too many of the bills. The majority of students receive state or federal aid. Any time a third party pays the bills – think of health insurance – the provider has fewer and fewer incentives to keep costs down. At least with health insurance, however, the third parties are (mostly) private companies. With tuition loans, however, the third party is government, and bureaucrats in Washington or Columbia are even less capable of knowing what the true costs of education are than the number-crunchers at insurance companies. In effect, public colleges can charge whatever they like, and government will ease the pain just enough to keep people from revolting, taking their money elsewhere, or bowing out of higher education altogether.

 

But that’s only one reason for high tuition. There’s another, and it’s a more easily observable one. If you go to the Budget and Control Board’s website and take a look at the salaries of state employees, you’ll discover a remarkable thing. The overwhelming majority of the state’s top salary earners – all but four or five of the top 300 –  work in the field of higher education. Of those, all but a handful are employed by the University of South Carolina, Clemson University, the College of Charleston, and the Medical University of South Carolina.

 

The point isn’t that these employees are making too much money. They may be making too much money, but that’s not the point. The point, rather, is that higher eduction institutions are immune from the financial realities that govern life in the world outside. Suppose the top 300 earners in the state salary database worked at the Department of Public Safety. Would anyone think that amiss?

 

It’s not just about college administrator salaries, either. If you drove or walked through any public college’s campus during the recession, you would likely have been diverted from the ordinary route because of ongoing construction. While the rest of the economy pulled back on new construction, public colleges partied like it was 1999.

 

Presently, Congress and much of the scribbling class is taking aim at “for profit” colleges for selling worthless degrees at inflated prices. Some of their contentions have merit, to be sure. But it’s far from clear why public “non profit” colleges should get a free pass. As Andrew Ferguson recently put it in an editorial for the Weekly Standard,

 

While the regulators penalize the for-profits, the nonprofits are free to spend their guaranteed loans and grants on new athletic centers, lavish food courts, designer dormitories, world-class sports teams, and other First World amenities in hopes of attracting still more students who will, in turn, take on more debt. The difference is that for-profits are candid about their goal of making money. Anyone who has walked across a handsomely landscaped traditional campus lately will recall the wise man’s admonition: “Nonprofit” is a term of art in the tax code, not an operating philosophy.

 

No, the exploding costs of sending your kid to a public college has nothing to do with state budgets. It has everything to do with the university budgets.