The state University system costs Connecticut taxpayers $2.8 billion and has a current enrollment of 30,000 at UCONN and about 36,000 at the other four regional facilities.
This means that taxpayers are paying a subsidy of $42,420 per student! This much on top of the $11,000 to $40,000 paid by students at UCONN or $4,000 to $11,000 at the regional campuses. This seems absurd so I suggested in my post a reduction of the subsidy to $1 billion and holding the feet of the administrators to the fire. Now I think it should be reduced even further.
I checked Minnesota too, as I did for K-12 and found a state subsidy of $2.7 billion for 93,000 students or $29,032 per student.
California: $9.7 billion for 437,000 students; $22,196 per student.
Hawaii: $1.1 billion for 50,317 students; $22,000 per student.
Texas, notorious low tax state: $11.7 billion for 577,000 students; $20,277 per student.
Once again, Connecticut leads the pack for worst-managed.
Be that as it is, the fact is that college tuition cost are growing even faster than medical costs. UCONN just jacked up tuition by more than 25%.
Some argue that since government is reducing it's investment, more falls on the students but that seems specious to me since overall costs are increasing at both public and private institutions.
Others say that it's simple supply and demand and there is some merit to this since enrollment is increasing except that it bucks the notion that with volume comes lower costs.
College professors make good money but, over time, their salary increases look to be in line with inflation after a short burst in the early 80's following unionization.
Yet others say it's because of administrative bloat, a contributor I don't doubt. Private university presidents are certainly raking in multi-million dollar paychecks. Public university presidents, including UCONN's Susan Herbst also do quite well.
Other candidates are the big endowment losses from the 2001 & 2008 crashes, a bidding war for faculty and a quest to offer state-of-the-art facilities (in a bidding war for students). None of these pass the common sense test of the graphs.
It's more likely that cost started to spiral out of control when President Carter elevated education to a cabinet-level agency. K-12 has been a government-driven bloat factory for over a century but with Carter's move, colleges could now belly up to the trough with increased federal funding for college. Education funding was $17 billion in 1975 and was $103 billion last year. Overall, education spending increased from $96 billion to $899 billion from 1975 to 2010, again excluding the hidden costs. That's mighty damned close to the 10:1 observation in the graphs compared with the 3:1 growth in the cost of living. Unfortunately for Carter, educators were probably the only ones who voted for him in 1980.
The tuition and cost-of-living curves start to diverge soon after Carter's term. You can see the first upward inflection in the college tuition curve when Stafford Loans became available in 1988. Then the rise slows in 1993 as the Stafford interest rates increased. The curve tilts upward again in 2001 as interest rates dropped. By the time rates went back up in 2008, the higher educators were firmly entrenched at the public trough. It is as I said in my Peter Principle post, when government interferes with market, prices skyrocket because government subsidies mean easy money.
This also got me thinking about the whole student loan crisis I keep reading about in the papers. $85 billion in bad debt among 6.8 million borrowers represents an average debt load of $12,500.
Wait a minute. I had about $10,000 in loan debt (principal plus interest) when I graduated my four-year degree in 1979 (I borrowed for my last two years when tuition at Marquette was about $3,000; it is now over $30,000, following the national trend of 10:1 over 35 years). According to a web-based inflation calculator, my debt was worth over $31,000 in today's dollars and interest rates back then were the highest ever. This agrees with the above cost-of-living graph but what's the deal; why is the average default worth so little compared to the skyrocketing tuition rates?
Clearly, with today's over-inflated tuition costs, the folks defaulting on loans are not four-year graduates or else the average debt load would be much higher. It appears as though the highest loan default rates correlate to art schools, schools in tropical locales and community colleges suggesting that defaults correlate with a lack of seriousness regarding higher education. This lack of seriousness finds fertile ground when awash in free government money; it's no stretch to imagine that young people not wanting to enter the workforce might want to party for a few years at taxpayer expense.
My view is that the cost to deliver a quality college education should not be not much higher than the cost to deliver at the K-12 level. The cost should be driven by the instructor's salaries since the paid delivery of an education happens in the classroom, just like K-12. The instructors need a higher level of education and so they must receive higher incomes to compensate for their greater investments and time. College faculty earn a bit less than twice as much as K-12 teachers so tuition should be no more than twice as high; say $10,000/year for an average (one third of the going average of $30,000 to be in line with the cost of living), maybe twice as much for technical school. This fits well with the cost of living curve and also with the starting salaries graduates can expect to receive.
The sum of government subsidies should never exceed, say, half of this amount to make sure the students have skin in the game. Loans should not be forgiven except for hardship; tack the balance onto tax bills.
Government spending leads to bloat leads to unaffordable institutions; a recurring theme.
Others say that it's simple supply and demand and there is some merit to this since enrollment is increasing except that it bucks the notion that with volume comes lower costs.
College professors make good money but, over time, their salary increases look to be in line with inflation after a short burst in the early 80's following unionization.
Yet others say it's because of administrative bloat, a contributor I don't doubt. Private university presidents are certainly raking in multi-million dollar paychecks. Public university presidents, including UCONN's Susan Herbst also do quite well.
Other candidates are the big endowment losses from the 2001 & 2008 crashes, a bidding war for faculty and a quest to offer state-of-the-art facilities (in a bidding war for students). None of these pass the common sense test of the graphs.
It's more likely that cost started to spiral out of control when President Carter elevated education to a cabinet-level agency. K-12 has been a government-driven bloat factory for over a century but with Carter's move, colleges could now belly up to the trough with increased federal funding for college. Education funding was $17 billion in 1975 and was $103 billion last year. Overall, education spending increased from $96 billion to $899 billion from 1975 to 2010, again excluding the hidden costs. That's mighty damned close to the 10:1 observation in the graphs compared with the 3:1 growth in the cost of living. Unfortunately for Carter, educators were probably the only ones who voted for him in 1980.
The tuition and cost-of-living curves start to diverge soon after Carter's term. You can see the first upward inflection in the college tuition curve when Stafford Loans became available in 1988. Then the rise slows in 1993 as the Stafford interest rates increased. The curve tilts upward again in 2001 as interest rates dropped. By the time rates went back up in 2008, the higher educators were firmly entrenched at the public trough. It is as I said in my Peter Principle post, when government interferes with market, prices skyrocket because government subsidies mean easy money.
This also got me thinking about the whole student loan crisis I keep reading about in the papers. $85 billion in bad debt among 6.8 million borrowers represents an average debt load of $12,500.
Wait a minute. I had about $10,000 in loan debt (principal plus interest) when I graduated my four-year degree in 1979 (I borrowed for my last two years when tuition at Marquette was about $3,000; it is now over $30,000, following the national trend of 10:1 over 35 years). According to a web-based inflation calculator, my debt was worth over $31,000 in today's dollars and interest rates back then were the highest ever. This agrees with the above cost-of-living graph but what's the deal; why is the average default worth so little compared to the skyrocketing tuition rates?
Clearly, with today's over-inflated tuition costs, the folks defaulting on loans are not four-year graduates or else the average debt load would be much higher. It appears as though the highest loan default rates correlate to art schools, schools in tropical locales and community colleges suggesting that defaults correlate with a lack of seriousness regarding higher education. This lack of seriousness finds fertile ground when awash in free government money; it's no stretch to imagine that young people not wanting to enter the workforce might want to party for a few years at taxpayer expense.
My view is that the cost to deliver a quality college education should not be not much higher than the cost to deliver at the K-12 level. The cost should be driven by the instructor's salaries since the paid delivery of an education happens in the classroom, just like K-12. The instructors need a higher level of education and so they must receive higher incomes to compensate for their greater investments and time. College faculty earn a bit less than twice as much as K-12 teachers so tuition should be no more than twice as high; say $10,000/year for an average (one third of the going average of $30,000 to be in line with the cost of living), maybe twice as much for technical school. This fits well with the cost of living curve and also with the starting salaries graduates can expect to receive.
The sum of government subsidies should never exceed, say, half of this amount to make sure the students have skin in the game. Loans should not be forgiven except for hardship; tack the balance onto tax bills.
Government spending leads to bloat leads to unaffordable institutions; a recurring theme.
Hey Marty! Although you lost me in the math I can marvel at your conciseness to this post. I make time to read you and I have a a wonderful way to connect with you. I'm sorry it took so long to do so. Thanks for posting!
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