Colleges ‘spending like there’s no tomorrow’

Given the heavy college presence in our fair state, this Wall Street Journal piece ought to provide some serious food for thought:

The nation’s best-known public universities have been on an unfettered spending spree. Over the past two decades, they erected new skylines comprising snazzy academic buildings and dorms. They poured money into big-time sports programs and hired layers of administrators. 

Then they passed the bill along to students.

The University of Kentucky upgraded its campus to the tune of $805,000 a day for more than a decade. Its freshmen, who come from one of America’s poorest states, paid an average $18,693 to attend in 2021-22. 

Pennsylvania State University spent so much money that it now has a budget crisis—even though it’s among the most expensive public universities in the U.S. […]

Let’s compare this to UNC-Chapel Hill.  In the 2021-22 school year, one full year of full-time attendance by an in-state student could cost (depending on your living arrangements) between  $17,856 and $24,734.  In 2023-2024, that cost range has increased to between $26,118 and $31,828.


[…] The University of Oklahoma hit students with some of the biggest tuition increases, while spending millions on projects including acquiring and renovating a 32,000-square-foot Italian monastery for its study-abroad program.  

The spending is inextricably tied to the nation’s $1.6 trillion federal student debt crisis. Colleges have paid for their sprees in part by raising tuition prices, leaving many students with few options but to take on more debt. That means student loans served as easy financing for university projects.

“Students do not have the resources right now to continue to foot the bill for all of the things that the university wants to do,” said Crispin South, a 2023 Oklahoma graduate. “You can’t just continue to raise revenue by turning to students.”[…]

It has long been clear to American families that the cost of college has gone up, even at public schools designed to be affordable for state residents. To get at the root cause, The Wall Street Journal examined financial statements since 2002 from 50 universities known as flagships, typically the oldest public school in each state, and adjusted for inflation. 

At the median flagship university, spending rose 38% between 2002 and 2022. 

Only one school in the Journal’s analysis—the University of Idaho—spent less. 

The schools paid for it in part by pulling in tuition dollars. The median flagship received more than double the revenue from undergraduate and graduate tuition and fees it did 20 years prior. Even accounting for enrollment gains, that amounted to a 64% price increase for the average student, far outpacing the growth in most big household expenses. 

More tuition revenue

Public university leaders often blame stingier state funding for the need to raise tuition revenue. And three-fourths of states did cut their support, undermining a longstanding principle that schools educated the populace with government backing. But universities generally didn’t tighten their belts as a result. Rather, they raised prices far beyond what was needed to fill the hole.

For every $1 lost in state support at those universities over the two decades, the median school increased tuition and fee revenue by nearly $2.40, more than covering the cuts, the Journal found.

Through it all, schools operated in a culture that valued unrelenting growth and prioritized raising revenue over cutting costs. Administrators established ambitious strategic plans and tried to lure wealthy students with luxurious amenities. Influential college rankings rewarded those that spent more.

Many university officials struggled to understand their own budgets and simply increased spending every year. Trustees demanded little accountability and often rubber-stamped what came before them. And schools inconsistently disclose what they spend, making it nearly impossible for the public to review how their tuition and tax dollars are being used. 

“These places are just devouring money,” said Holden Thorp, who was chancellor at the University of North Carolina at Chapel Hill from 2008 to 2013 and is now editor in chief of Science. Offering everything to everyone all at once is unsustainable, he said. “Universities need to focus on what their true priorities are and what they were created to do,” he said.

Colleges invested money inside and outside the classroom, including to improve technology, expand counseling and intramural sports, and build facilities such as modern dorms and new stadiums.  

To examine public university spending, the Journal collected data from audits, archived budget websites and documents received through public-records requests covering expenses in fiscal 2002, 2012 and 2022.[…]

Much of the increase in outlays showed up in the hiring process, for administrators, faculty, coaches and finance experts, the Journal’s analysis found. Salaries and benefits, which usually eat up more than half of operating budgets, rose by roughly 40% at the median flagship since 2002. […]

The Journal places a lot of blame on the alleged overseers at our colleges and universities:

[…] Research by James V. Koch, an economist who studies college spending and a former president at Old Dominion University in Virginia, found that public-university trustees approved 98% of the cost-increasing proposals they reviewed, often unanimously. In most states, he said, there hasn’t been anyone to say, “No, you can’t do that.”

Back in 2005, a Hawaii state audit called out the University of Hawaii System board for approving a budget that gave the flagship Manoa campus $200 million when, auditors said, all but $13 million went to vague or unnecessary requests.  

Honolulu attorney Benjamin Kudo, who joined the university’s board in 2011, said he was stunned by the lack of information he was given during the budget process. He said he received a packet of pie charts and a PowerPoint presentation with general information on how the university planned to divide up its funds for areas including teaching, libraries, athletics and facilities across 10 campuses.

Kudo said administrators weren’t initially receptive to requests that he and another new board member, Jan Sullivan, made for more detail, including a comparison of projected versus actual spending. Kudo, who served on the board until 2022, recalled being accused of trying to micromanage the $1 billion budget. 

School officials expected him to follow the lead of prior trustees, Kudo said: “It’s basically an automatic approval of whatever the administration wants.” 

Sullivan also said such rubber stamping was typical early in her tenure. After a few years of nagging, Sullivan and Kudo said, the board received more detailed financial information, and it stopped greenlighting so many requests. […]

We’ve learned that our state has a habit of staffing boards of trustees and governors with donors and party hacks not-so-interested in management and oversight.  And the on-campus spending rages on while the bill gets passed on to us and our kids.

Where are the politicians from the “conservative revolution” in Raleigh on this?  We’ve got dramatic cost increases and other hijinks running amok on state campuses, but the chairman of the oversight committee on Jones Street is too busy running for another office to care.