Bacon's Rebellion

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More Evidence of Excessive Tuition Increases

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James A. Bacon
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An enduring debate in higher education, especially here in Virginia, is the extent to which cuts in state support are responsible for skyrocketing tuition & fees at public universities. In his book, “The Impoverishment of the American College Student,” James V. Koch has tackled that question on a national basis, and in so doing has provided some interesting data on five Virginia universities.

For 20 flagship institutions, 20 urban institutions, and 20 “typical” institutions, Koch performed a series of calculations tracking changes between the 1999/00 school year and the 2014/15 school year:

  • The percent change in published tuition and fees (T&F) adjusted for inflation.
  • The percentage change in published net T&F — adjusted for inflation and financial aid — per full-time equivalent student.
  • The percentage change in state appropriations, adjusted for inflation, per full-time equivalent student.
  • The net change in revenue available to the institution resulting from changes in tuition, fees, financial aid, and state support.

The results for the five +Virginia institutions among the 60 analyzed can be seen in the fourth column in the chart above. One university, Old Dominion, came out slightly behind — by $82. VCU increased T&F somewhat more than needed to offset the decline in state support, while GMU, Radford, and UVa increased T&F far more than required. UVa came out more than $3,600 ahead.

One might get slightly different results if one picked different start and end dates for the data, but Koch’s use of a 15-year time span tends to even out the effect of fluctuating state support. The indisputable bottom line is that four of the five universities analyzed jacked up inflation- and aid-adjusted tuition & fees more than needed to offset declining state support. Those universities, it can be assumed, applied those funds to institutional development and growth.

While initiatives dedicated to growth and development undoubtedly have some value, they impose a significant cost on the students and families paying the tuition and fees, many of whom incur tens of thousands of dollars in debt before graduating — assuming they graduate.

Every public Virginia institution should conduct this kind of analysis, and every board of visitors should take these numbers into account when contemplating the merits of new and expanded initiatives, and the tuition increases needed to fund them.

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17 responses to “More Evidence of Excessive Tuition Increases”

  1. Steve Haner Avatar
    Steve Haner

    What a shock (not). That’s a powerful chart, though.

    They charged more because 1) they could get away with it in the marketplace, 2) the suckers (er students) could get loans and 3) they had lots of stuff they really, really wanted to spend more money on to make their own lives better, usually unrelated to education. The complaint that they were covering state revenue shortfalls was at best only partially true.

    However, you can see in that chart that the drop in state support was not uniform and the legislature and governors were happily expecting the most-marketable schools to milk the students more. A 50 percent drop in real terms in state support per FTE for UVA is also an act of pure negligence. That was a conscious move by the Powers that Be to shift the cost so they could spend tax dollars somewhere else.

  2. djrippert Avatar
    djrippert

    What amazes me is that Jim Bacon and James Koch still have confidence in the observably failed Board of Visitors approach to public college and university management. How many more decades of failure will be required before the “powers that be” come to the obvious conclusion that the present approach is failing?

    Take a look at the Board of Visitors …

    https://bov.virginia.edu/visitors-staff

    Now, let’s look at a few via VPAP …

    James B Murrary (Managing Partner of a Venture Capital fund) – Personal political donations of $690,625 including $110,250: Warner for Governor, $100,000 Virginia Progress PAC, $56,000 McAuliffe for Governor …

    Whittington W Clement (Attorney, Richmond law firm) – Personal political donations of $34,773.

    Robert M Blue (Dominion EVP and CEO of Power Delivery Group) – Personal political contributions of $67,535. Employer’s political contributions – $16,566,879

    Mark T Bowles (EVP, McGuire Woods) – Personal political contributions – $22,277. Employer’s political contributions – $4,216,604

    I don’t have time to go through all of these people but I think I see a pattern. Wealthy, accomplished people who know how to write checks to state politicians.

    Where is the representation of the average citizen – taxpayer in Virginia? Which of these hedge fund managers / law firm partners / personal investors gives a damn about affordability for middle class Virginians. Other than one professor and the student representative … is there a person on this board who isn’t a multi-millionaire?

    Where are the schoolteachers, Naval officers, construction crew foremen?

    The southeast Virginia aristocracy rides again.

    There should be one member of the General Assembly assigned a full voting role on every public college and university in the state. Their explicit role should be to represent the people of Virginia in the management of the people’s assets called public colleges and universities. They should be required to publish a public domain report annually on the activities of their college or university from the people’s perspective. Any one of them that doesn’t address affordability ought to be voted out of office at the next election.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Yes, Don’s comment say it all in a nutshell:

      UVA is a big, fat and corrupt cow designed and built for Virginia’s elite and UVA administrators, faculty, and allied corporate interests, to milk for their own private advantage at great public expense paid by taxpayers, students, and students parents.

      These public monies gotten under false pretences are laundered through UVA. They are primarily used not to benefit students but to benefit UVA’s administrators, faculty, and their corporate allies, particularly all those getting benefit of UVA research dollars and luxury items skimmed off student tuition, fees, and other charges, the great majority of which are used to further fatten the corrupt UVA cow, at the cost and detriment of the student’s education, and the public’s wealth. What a scam.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      How can my above statement be shown with detail and clarity?

      Over the years, here on Bacon’s Rebellion, we have gotten into great detail on how modern universities, including UVA, have been carefully designed and refined to shortchange students, and shift ever greater monies, energy and benefits over the university administrators and senior tenured faculty, particularly research faculty, who are operating at great student expense to student detriment.

      For example, one need only look into the explosion of university administrators, and concurrent explosion in their salaries and perks, particular at the senior level. Then one needs to evaluate the benefit, if any, these administrators bring to the education of students, compared to the harm they do to student’s education in many ways beyond their siphoning off monies that could be spent directly on tenured professors who actually teach and grade students, a number in rapid decline, now near the vanishing point.

      A similar analysis needs to be done on the explosion of costs of all sorts paid the faculty, and determining how much of those costs go the classroom instruction of students, and grading of students, and mentoring of students. Here again, one will be shocked at the waste of money, and how ever rising faculty costs result in ever less teaching and time spent on students, grading, and mentoring of students.

      One will also be shocked at the great and many lengths that the modern elite university (including UVa.) has gone to insure this corrupted educational system, benefiting the institution and those who run it over the students.

      And of course, as one would expect, the results are typically dismal for students. Here, for example, consult the fine book Academically Adrift: Limited Learning on College Campuses by Richard Arum and Josipa Roksa, one a UVA professor.

      And one needs to look into the issue how how faculty research and political ideology has magnified these problems exponentially.

      This is where to start, though it only is the tip of the iceberg of problems now manifest.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Above I said: “For example, one need only look into the explosion of university administrators, and concurrent explosion in their salaries and perks, particular at the senior level. Then one needs to evaluate the benefit, if any, these administrators bring to the education of students, compared to the harm they do to student’s education …”

        Here is an example, taken from yesterday’s Wall Street Journal:

        “Hundreds of American colleges have “bias-response teams” or similar mechanism for students or faculty to report bias incidents. These systems enforce political correctness and turn campuses into miniature surveillance states.

        Through the Freedom of Information Act, I recently obtained and reviewed nearly 300 alleged bias incidents at 11 major public universities. The reports, which we asked to be scrubbed of identifying information for both the accusers and accused, reveal students who are perpetually offended and on the lookout for ideological heresy. Actual crimes such as vandalism or threats of physical violence are typically handled by campus police. In most bias reports, campus community members simply heard or saw something that made them mildly uncomfortable …

        People can be reported for simply giving the impression that they are not sufficiently progressive. A self-identified “trans feminine” student at Indiana reported a faculty member for giving a “rude look” to the student, who wore lipstick to class, and for saying something to someone else in the classroom that the student couldn’t hear but suspected was about the student’s failure to look “totally masculine.”

        “Students and faculty are afraid to have honest conversations—or even joke around with each other—out of fear of being reported for a faux pas,” Portland State professor Peter Boghossian told me earlier this year. The result is a culture of mistrust and bad faith, in which everyone is a suspect. Now that’s a hostile learning environment.” End Quote.

        For the full Wall Street Journal article, please see:

        https://www.wsj.com/articles/bias-teams-welcome-the-class-of-1984-

  3. Steve Haner Avatar
    Steve Haner

    I DID address affordability on a regular basis on the State Council of Higher Education for VA (SCHEV) and didn’t get a second term. Go figure. (Yes, my political activity was behind that appointment, too. No apology.)

  4. Policy Student Avatar
    Policy Student

    In my 2000 freshman seminar, a professor told us that two thirds of our class would drop out, and they did. They quietly disappeared with decades of debt and no degree. Fast forward to 2019, the same school has a nearly 70% graduation rate. What changed? Student support. As a freshman, I was told “good luck.” As a current grad student, I’m offered personalized advising, career workshops, scholarship help, internships, paid assistantship opportunities, counseling, etc. Hugely helpful. I’m genuinely OK with T&F hikes for academic supports. I know they are expensive. But the luxury gym….not so much.

    1. James A. Bacon Avatar
      James A. Bacon

      Virginia universities have a pretty good record for on-time graduation, and they’re working on improving the figures — including through student-support programs like the one you cited. I agree, as far as increased expenditures go, this is a worthwhile place to put money.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Policy Student –

      That is good news. It is right where much more money needs to go. Sadly, in many institutions, high retention rates are not necessarily a good sign. In fact, they are far too often the reverse, a bad sign when the students are not learning, and have no fear of funking out, and are simply along for an easy fun filled ride thanks to grade inflation while, at the same time, the institution is far too happy to collect the student’s money, irrespective of student’s learning.

      But, if that all too typical case is eliminated by truthful grading enforcement that insures achievement helped along, if needed, by a full student support system that is provided by faculty, then we have an ideal teaching and learning situation, along with real learning institution that honors its duty to educate and motivate its student learners who then are a far more valuable end product, instead of some professor’s research project that is paid for out of the funds and debt of his neglected students.

  5. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I agree with most of what has been said in these posts. I do not share Don’s optimism regarding having a member of the General Assembly on the governing board of each institution of higher education. I do not have any confidence that such a presence would make much difference.

    The one solution that might work would take a lot of political will. I would freeze the tuition and fees of each institution. To get an increase, each institution would have to submit a budget request, setting out the requested increase and the justification for it. The request would be reviewed by the Department of Planning and Budget, which would make recommendations to the Governor as it does for all budget requests. The General Assembly would have the final word. In this way, state financial assistance, financial aid and tuition policies could be considered together. To make this approach work, both DPB and the GA money committees would need quite a bit of additional staff with expertise in higher education budget matters. Such an approach would bring more transparency and accountability to the financing of higher ed.

    An alternative to this approach would be to involve JLARC in some capacity.

    I realize that there are a lot of potential problems with this approach (the primary one being the stifling of creativity and diversity among schools), but the current system is not working and we need to start somewhere.

    1. djrippert Avatar
      djrippert

      You approach sounds fine. But it would require that the General Assembly take accountability for middle class Virginians, something that neither the administration at Virginia’s public colleges and universities nor their boards of visitors seems willing to do.

      Our state government doesn’t outsource the management of the Virginia Department of Transportation to well heeled political donors, why do we do that with our public colleges and universities?

      Here’s the resume of the Northern Virginia representative to the Commonwealth Transportation Board:

      “Mary Hughes Hynes is an educator, a public servant, and transportation advocate. Hynes started her work in Arlington as an early childhood professional, working in a number of Arlington nonprofit preschools. She brought that experience to the Arlington School Board where she served for 12 years. Subsequently, she was elected to two terms on the Arlington County Board, where she focused on transportation, affordable housing and civic engagement.

      Since 2008, Hynes has served on a number of transportation-related boards in Virginia, including the Northern Virginia Transportation Commission, the Northern Virginia Transportation Authority, the Washington Metropolitan Area Transit Authority, and the Virginia Transit Association.”

      Not a hedge fund manager, not a private investor, not a real estate magnate … a former teacher with significant transportation experience. This is what I expect to see on the CTB. Why aren’t there any preschool teachers on the UVA Board of Visitors? Because BoV appointments are given to the highest bidder?

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      I like Dick above budget review oriented solution. One key to that approach should be to insure that a student’s tuition and fees go directly to pay for enhancing and insuring that the student gets the education he or she deserves and pays for, thus that students tuition goes directly to the students hands on education.

      In that spirit perhaps Dick’s solution can be married to my solution mentioned in earlier blog here, namely:

      Yes, university administrators who run public and private (to extent they take public funds) universities are running wild in America. These rogue administrators engage in activities that far exceed their mandates and charters while they also ignore their duties under those mandates and charters. In so doing, these administrators do great and long term harm to students, society and America’s political system.

      We need to reign in, and break up, these higher education cartels, their arrogance and special privilege, and so put an end to their chronic abuse of the nation and its students.

      For example, we need to break apart their corrupt admissions practices. We need to sever their research elements from their teaching elements. We need to demand that professors who feed off tuition funds actually teach students, and truthfully grade the performance of students, as their primary duty. We need to demand that these teaching universities exit their many unrelated businesses that interfere with the nations political system, and erase the nation’s history, its heritage and culture, and very foundations.

  6. V N Avatar
    V N

    So is he saying ODU, where he works, is the only institution that actually helped out and lost money on the whole deal?

  7. LarrytheG Avatar
    LarrytheG

    re: the CTB – before the advent of Smart Scale – road projects in Virginia were uber-political with the local rep being someone who had “juice” to influence funding. Now that Smart Scale has basically jerked the process away from political types – mere citizens are being appointed.

    I understand the angst with higher ed but basically what is going on is an attack on our institutions – because government funding and loans is also given to Community Colleges as well as for-profit and private colleges like Liberty and yet the focus is pretty much solely on UVA and similar – even though tuitions costs have gone up – pretty much across most all of higher-ed institutions AND people DO have and always have had a CHOICE as to where to go.

    Higher Ed is NOT the only area where costs have gone up higher than inflation – either – to be fair.

    Perhaps reforms are needed but the ones being proposed are for MORE Government – almost as bad as MO Money!

    We want the GA to do this and do that… to “force” Va Universities to do what the GA-appointed bureaucracy (yes that’s what you’d get if you have the GA make laws… ) decide what UVA can and cannot do.

    Are ya’ll SERIOUS! Government is your answer to this problem? Seriously? 😉

    Seems like I remember Jim B advocating that the Govt stay OUT of payday loans because they provided a “needed service” and govt would surely screw it up if they got more involved.

    Good LORD! 😉

  8. Izzo Avatar
    Izzo

    “Higher Ed is NOT the only area where costs have gone up higher than inflation – either – to be fair.”

    Who said it was? A straw man?

    What are the facts? Higher ed has gone up 4X the CPI rate since 1990, 2X the rate of healthcare, faster than any major cost group, with student loan debt now exceeding all personal and household debt except mortgages, with student loan default rates about 8X higher than mortgage defaults.

    1. LarrytheG Avatar
      LarrytheG

      Not a straw-man at all – the point being that some products and services do go up faster than the inflation rate – and it’s not necessarily because it’s a rip-off or “bloated administration”, or nefarious governance.

      I would posit that Higher Ed is going up faster than inflation because:

      1. – demand for higher ed continues strong
      2. – like with cars and computers and other things, people want “more” programs and services including big time sports programs
      3.- the easy availability of money – just like we saw with mortgage loans and skyrocketing housing prices that were going up so fast that TV shows about “flipping” homes were all the rage.

      And I point out once again that no one is forcing anyone to buy these outrageously-priced educations. There ARE much lower cost alternatives but people are “sold” on the idea that ANY 4-yr degree from a “name” University is a guaranteed good lifetime job doing “something” – does not matter what – it’s like an entitlement.

      People would LOVE to be able to buy a Ford F-150 pickup for what they used to cost before their price escalated also – to the point where each truck has about $5000 of profit on it and many of them cost 40K, 50K and more and people DO go into debt to buy them but again – look at the demand.

      Universities and higher ed in general is all about enrollment – and they are caught in a vicious cycle of competition where they have to offer _more_ to keep demand up – and they pay for it by increasing prices – which normally would depress demand but when it comes to 4-yr College at a major name University – there is no check on demand – and easy loans are a big part of it.

      Don’t blame the Universities for people making really dumb financial mistakes in the name of what they “want”. They do this with all manner of products and services – they buy overpriced vehicles, time-shares, lottery tickets, for-profit schools, you name it – higher ed is just another category and as long at the “more programs” yields strong demand for enrollment – it will continue.

      It’s totally ironic that those who say they want LESS govt and more free market – want the Govt to CONTROL prices – the excuse being that because government helps in funding that it’s “okay” to have the government control prices and programs and labor costs …

      It’s not the “bloated” administrators or high paid professors or low attendance classes – it’s demand for things like a lot of different kinds of courses and programs and big name sports and other student services that are explicitly designed to enhance appeal and increase demand and as long as that “works” the escalation will continue because like 50K pickup trucks – until we actually see more people “priced-out” of that market and demand actually drop – there is no motivation for Universities to change – and the PROOF of this is that smaller colleges with less programs are now getting killed – their numbers ARE dropping.

      this is about basic economics not higher ed per se.

      1. Izzo Avatar
        Izzo

        Larry, your arguments and your analogies are all wrong. F-150s are purchased directly by consumers with loans based on credit risk. It is a physical good that can be inspected rigorously and comparison shopped by the buyer. Higher education is directly and indirectly subsidized by taxpayers and it is very difficult to see where your money is going or the tangible benefits you will receive. The market dynamics are completely different. You only have to look at the chart in the AEI publication to see that. The relative cost of automobiles has declined, while higher ed has skyrocketed.

        http://www.aei.org/publication/chart-of-the-day-century-price-changes-1997-to-2017/

        Higher education costs have gone up significantly faster than the rate of inflation for well over 40 years now. Furthermore, higher education costs are significantly higher in the U.S. than in other developed countries, yet attainment (graduations) is now in the lower middle of the pack. It used to be leading 30 years ago. So we are paying far more and getting far less. You say this is about “basic economics not higher ed per se”. I’d say it is basic economics applied to higher ed and many economists would say that there are “structural” problems when you have a significant divergence from other markets over a long period of time. (You could say the same of healthcare.) When this happens, the logical approach should be to look at the market, identify problems, and address them.

        You put forth a false narrative that approaches to address these issues are binary: either government takeover or laissez faire markets. Most functioning markets have government playing its role and the market playing its role. In my view, what Jim is usually doing is discussing what the proper government role should be.

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