College Tuition: For Your College and For My College
"What's the deal here? Why do costs outstrip inflation? A college education is one of the most expensive and important things you'll ever buy, and, yes, it's still a good value, blah, blah, blah, but you can find out more about a lot of other products."
So said Margaret Spellings, Secretary of Education, on a subject of great concern to many Americans -- college tuition.
College tuitions have drawn some attention because of their rapid rise, faster than the inflation rate. But the rate of increase of college tuitions only calls attention to the main problem, which is simply their great size. In the case of private colleges at least, tuition takes an impossibly large chunk out of middle-class family incomes. The average tuition for private colleges is reported to be $21, 235. To take some random examples, tuition at Northwestern was $29,940 for 2004-5, and at Cal Tech $25,720. Locally, Case-Western Reserve will charge $30,240 for the 2006-7 academic year, while Baldwin-Wallace will charge its liberal arts students $20,518.
Of course there are scholarships, as well as student loans. But not every student can receive a scholarship, and student loans have become notorious for the enduring burden their recipients have to bear.
And of course there are state schools. Tuition at these institutions, for in-state enrollees, is much less, perhaps about a third of the tuition for private schools. But someone still pays, of course, and that someone is the taxpayer. To illustrate, consider Ohio State University (2005-6). In-state tuition is $7,827, while out-of-state tuition is $19,152. The difference is an indication of how much the state of Ohio subsidizes each of its students. (The subsidy is probably greater than that difference, since the state pays for facilities used by both in-state and out-of-state students.)
In short, college education is costing a whole lot of money, regardless of who pays for it. And as Ms. Spelling has pointed out, no one knows why. The cost of education is treated as a given, as a law of nature, or to get closer to the problem, as a sacred cow.
But are $20,000-plus tuitions necessary? No one seems to be asking this question (except possibly for Ms. Spelling). No one asks where the money goes. Apparently college budgets, unlike business budgets, totally escape cost accounting.
My Model College
Of course I can't do cost accounting for the colleges - I can't match the needs to the money - but I can match the money to the needs, through a sort of cost accounting in reverse. I will calculate the expenses that a college would need by outlining an imaginary college and calculating its necessary expenses, all of which will be paid for by tuition. (Room and board, both in my model and in real-life cases, is a separate expense.) In this way we can compare the tuition at my college with the tuitions at real-life colleges and ask: Why the difference?
My college will have 500 students. (A larger enrollment of course multiplies the numbers accordingly.) Each student will attend four classes, and each class, on average, will have 25 students (no immense lecture courses). With 2000 individual class slots (500 times four), divided by 25, this means 80 classes. Each instructor will teach three classes. Thus I will need 27 instructors.
Most instructors will be paid, on average, $60,000 per year. With benefits and taxes, I assume the total cost per instructor will be $75,000. However, instructors in physics, chemistry or geology will have to be paid more to compete with industry, so eight such instructors will each receive overall an additional $40,000. With 19 instructors at $75,000 and eight at $115,000, the total cost for instructors is $2,345,000.
In addition, I will need an administrative staff. There will be three administrative officers (a head officer, a registrar and a dean of students, perhaps). The head, who could be called the president (though that name doesn't fit well because he won't have to raise money) will be paid $100,000 including extras; the other two will be paid $75,000. There will be three secretaries, each paid $40,000 including extras. Thus the total cost for administrators will be $370,000.
This makes the total personnel cost $2,715,000 per year, or $5,430 per student.
In addition, I'll need a building. For the sake of yearly calculation, let's suppose I can lease the building I need. (Buying or building would be no more expensive.) This will cost $410,000 per year, including utilities. For those who like to do the math, here is how it works out:
I'll need eight classrooms to accommodate 500 students taking four classes apiece, with an average class size of 25. The 500 students times four classes equals 2000 individual class-spaces, and this divided by 25 students per class equals 80 classes, each meeting three times a week; thus 240 meeting-times per week. In each classroom, there will be 32 meeting-times per week (six one-hour meetings each weekday and two on Saturday). If we divide 240 by 32 the answer, rounded to a whole number, is eight, the number of classrooms needed.
Only 40 seats will be in each classroom (to insure that classes are not too large), and so 750 square feet per classroom will be sufficient. That means 6,000 square feet of classrooms. Add 6,000 square feet for an auditorium plus 2,000 square feet for offices and miscellaneous, and the final figure is 14,000 square feet. I assume (safely) a per-square-foot cost of $20 per year, making the cost of the building $280,000. Assume $30,000 per year for utilities, and another $100,000 for janitorial services and maintenance, bringing the total cost for the building to $410,000.
I'll add another $100,000 for publicity and miscellaneous expenses.
Finally, the college will not have a library per se, but I will spend $100 per student on books relevant to the courses being taught, adding $50,000 to the budget. (This should be enough to purchase about 1,500 trade books per year, which after a few years will add up to a sizeable collection.)
Add up the costs: $2,715,000 for personnel; $410,000 for the building; $100,000 for miscellaneous expenses, and $50,000 for books. The total is $3,275,000, and divided by 500, that amounts to a tuition of $6,550 per student per year.
For that price the student will receive an education that is better than most, for two reasons:
1) The small class size will allow for direct interaction between students and instructors.
2) The instructors are dedicated to teaching, not to advancement of their scholarly careers. Teaching is what they are hired for, and good teaching -- including innovation in teaching methods and techniques -- is what they are rewarded for. Collegiality will be encouraged to the utmost.
Of course I expect the instructors to be well-versed in their fields. (They will all have a Ph.D. or be well on their way to a Ph.D.) I expect them to read the literature and to attend conferences on occasion. But their essential purpose in doing so will be to absorb the most advanced thinking in their field, not to participate in it. (If my instructors make cutting-edge contributions in their fields, so much the better, but that is not what they are being paid for, and they will feel no pressure to be king of the hill.)
To be sure, my college lacks many of the features of actual colleges. I've mentioned that it has no library. It has no sports program. It has no health services. It doesn't give scholarships (but it hardly needs to, given the modest tuition). I have not factored in these expenses, but neither have I factored in the additional sources of revenue that almost every college enjoys - endowments in the case of private colleges and state subsidy in the case of public institutions. I am assuming - and I believe it is a completely fair assumption - that if my college were transformed into an actual institution, these sources of revenue would more than pay for the amenities not included in my calculations.
In short, my college would provide an education that is as good as or better than most colleges, while charging tuition that is one-third the average for actual colleges, and less than one-fourth for some of them. Which strongly suggests that existing college tuitions are bloated and indefensible.
Am I wrong in this? If so, where? Why the difference between tuition in my model and tuitions in real life? Show me the cost accounting.
And if you say "But the colleges also provide this-and-this," then I will say: Is this-and-this really necessary to a good education?
Diagnostic Suggestions
While I can't analyze any real-life college, I can offer two suggestions:
1) Separate teaching from scholarship. One reason for exorbitant tuition rates is that so many schools are selling prestige, not good education. They pursue top-ranked scholars, but good scholarship does not equate to good teaching. The result is competition that drives up faculty salaries unnecessarily while undergraduate education suffers. (For more thoughts along this line, see my previous column.)
Of course we need institutions that support scholarship and award advanced degrees (this is where my college instructors will get their Ph.D.s), but these should be separate from the colleges, with separate administrations, separate faculties, and different cultures. Such graduate schools might exist as separate organizations within universities, or they might exist as free-standing institutions, more or less on the model of the Princeton Institute. Undergraduate colleges, of course, would not have to reorganize - they would only have to be certain that their organizational culture rewarded teaching over scholarship.
2) Organize teaching along more rational lines. At present, teaching is organized around courses in which one instructor is responsible for everything - for transmitting information to students (supplementing what is in the textbooks), for stimulating and nourishing students' thinking, for grading and record-keeping.
Why should these functions all be performed by one person? And why should they take the form, as they often do, of the stupid and fatuous oral lecture method? The transmitting of information can be done much more effectively if the "lecturer" puts his or her lecture notes, in reader-friendly form, on paper (or on tape or CD, for those who insist they learn better aurally than visually) and pass these out to the students to read and re-read at their leisure. The information on a certain topic (e.g., the Civil War) could be provided for any number of classes (e.g. to all students studying American history) by the instructor who specializes in that topic.
With required information in the hands of the students, all the classroom time would be available for interaction between students and instructors. (I say "interaction" because the interaction would hopefully consist not only of a general discussion, but largely of exercises devised by the instructor to promote deeper understanding.) Under this arrangement, an instructor would know his or her students better, leading to more accurate grading and fewer term papers acquired from the Internet. Teaching in all aspects would be done more efficiently, leading to better education at less cost.
So said Margaret Spellings, Secretary of Education, on a subject of great concern to many Americans -- college tuition.
College tuitions have drawn some attention because of their rapid rise, faster than the inflation rate. But the rate of increase of college tuitions only calls attention to the main problem, which is simply their great size. In the case of private colleges at least, tuition takes an impossibly large chunk out of middle-class family incomes. The average tuition for private colleges is reported to be $21, 235. To take some random examples, tuition at Northwestern was $29,940 for 2004-5, and at Cal Tech $25,720. Locally, Case-Western Reserve will charge $30,240 for the 2006-7 academic year, while Baldwin-Wallace will charge its liberal arts students $20,518.
Of course there are scholarships, as well as student loans. But not every student can receive a scholarship, and student loans have become notorious for the enduring burden their recipients have to bear.
And of course there are state schools. Tuition at these institutions, for in-state enrollees, is much less, perhaps about a third of the tuition for private schools. But someone still pays, of course, and that someone is the taxpayer. To illustrate, consider Ohio State University (2005-6). In-state tuition is $7,827, while out-of-state tuition is $19,152. The difference is an indication of how much the state of Ohio subsidizes each of its students. (The subsidy is probably greater than that difference, since the state pays for facilities used by both in-state and out-of-state students.)
In short, college education is costing a whole lot of money, regardless of who pays for it. And as Ms. Spelling has pointed out, no one knows why. The cost of education is treated as a given, as a law of nature, or to get closer to the problem, as a sacred cow.
But are $20,000-plus tuitions necessary? No one seems to be asking this question (except possibly for Ms. Spelling). No one asks where the money goes. Apparently college budgets, unlike business budgets, totally escape cost accounting.
My Model College
Of course I can't do cost accounting for the colleges - I can't match the needs to the money - but I can match the money to the needs, through a sort of cost accounting in reverse. I will calculate the expenses that a college would need by outlining an imaginary college and calculating its necessary expenses, all of which will be paid for by tuition. (Room and board, both in my model and in real-life cases, is a separate expense.) In this way we can compare the tuition at my college with the tuitions at real-life colleges and ask: Why the difference?
My college will have 500 students. (A larger enrollment of course multiplies the numbers accordingly.) Each student will attend four classes, and each class, on average, will have 25 students (no immense lecture courses). With 2000 individual class slots (500 times four), divided by 25, this means 80 classes. Each instructor will teach three classes. Thus I will need 27 instructors.
Most instructors will be paid, on average, $60,000 per year. With benefits and taxes, I assume the total cost per instructor will be $75,000. However, instructors in physics, chemistry or geology will have to be paid more to compete with industry, so eight such instructors will each receive overall an additional $40,000. With 19 instructors at $75,000 and eight at $115,000, the total cost for instructors is $2,345,000.
In addition, I will need an administrative staff. There will be three administrative officers (a head officer, a registrar and a dean of students, perhaps). The head, who could be called the president (though that name doesn't fit well because he won't have to raise money) will be paid $100,000 including extras; the other two will be paid $75,000. There will be three secretaries, each paid $40,000 including extras. Thus the total cost for administrators will be $370,000.
This makes the total personnel cost $2,715,000 per year, or $5,430 per student.
In addition, I'll need a building. For the sake of yearly calculation, let's suppose I can lease the building I need. (Buying or building would be no more expensive.) This will cost $410,000 per year, including utilities. For those who like to do the math, here is how it works out:
I'll need eight classrooms to accommodate 500 students taking four classes apiece, with an average class size of 25. The 500 students times four classes equals 2000 individual class-spaces, and this divided by 25 students per class equals 80 classes, each meeting three times a week; thus 240 meeting-times per week. In each classroom, there will be 32 meeting-times per week (six one-hour meetings each weekday and two on Saturday). If we divide 240 by 32 the answer, rounded to a whole number, is eight, the number of classrooms needed.
Only 40 seats will be in each classroom (to insure that classes are not too large), and so 750 square feet per classroom will be sufficient. That means 6,000 square feet of classrooms. Add 6,000 square feet for an auditorium plus 2,000 square feet for offices and miscellaneous, and the final figure is 14,000 square feet. I assume (safely) a per-square-foot cost of $20 per year, making the cost of the building $280,000. Assume $30,000 per year for utilities, and another $100,000 for janitorial services and maintenance, bringing the total cost for the building to $410,000.
I'll add another $100,000 for publicity and miscellaneous expenses.
Finally, the college will not have a library per se, but I will spend $100 per student on books relevant to the courses being taught, adding $50,000 to the budget. (This should be enough to purchase about 1,500 trade books per year, which after a few years will add up to a sizeable collection.)
Add up the costs: $2,715,000 for personnel; $410,000 for the building; $100,000 for miscellaneous expenses, and $50,000 for books. The total is $3,275,000, and divided by 500, that amounts to a tuition of $6,550 per student per year.
For that price the student will receive an education that is better than most, for two reasons:
1) The small class size will allow for direct interaction between students and instructors.
2) The instructors are dedicated to teaching, not to advancement of their scholarly careers. Teaching is what they are hired for, and good teaching -- including innovation in teaching methods and techniques -- is what they are rewarded for. Collegiality will be encouraged to the utmost.
Of course I expect the instructors to be well-versed in their fields. (They will all have a Ph.D. or be well on their way to a Ph.D.) I expect them to read the literature and to attend conferences on occasion. But their essential purpose in doing so will be to absorb the most advanced thinking in their field, not to participate in it. (If my instructors make cutting-edge contributions in their fields, so much the better, but that is not what they are being paid for, and they will feel no pressure to be king of the hill.)
To be sure, my college lacks many of the features of actual colleges. I've mentioned that it has no library. It has no sports program. It has no health services. It doesn't give scholarships (but it hardly needs to, given the modest tuition). I have not factored in these expenses, but neither have I factored in the additional sources of revenue that almost every college enjoys - endowments in the case of private colleges and state subsidy in the case of public institutions. I am assuming - and I believe it is a completely fair assumption - that if my college were transformed into an actual institution, these sources of revenue would more than pay for the amenities not included in my calculations.
In short, my college would provide an education that is as good as or better than most colleges, while charging tuition that is one-third the average for actual colleges, and less than one-fourth for some of them. Which strongly suggests that existing college tuitions are bloated and indefensible.
Am I wrong in this? If so, where? Why the difference between tuition in my model and tuitions in real life? Show me the cost accounting.
And if you say "But the colleges also provide this-and-this," then I will say: Is this-and-this really necessary to a good education?
Diagnostic Suggestions
While I can't analyze any real-life college, I can offer two suggestions:
1) Separate teaching from scholarship. One reason for exorbitant tuition rates is that so many schools are selling prestige, not good education. They pursue top-ranked scholars, but good scholarship does not equate to good teaching. The result is competition that drives up faculty salaries unnecessarily while undergraduate education suffers. (For more thoughts along this line, see my previous column.)
Of course we need institutions that support scholarship and award advanced degrees (this is where my college instructors will get their Ph.D.s), but these should be separate from the colleges, with separate administrations, separate faculties, and different cultures. Such graduate schools might exist as separate organizations within universities, or they might exist as free-standing institutions, more or less on the model of the Princeton Institute. Undergraduate colleges, of course, would not have to reorganize - they would only have to be certain that their organizational culture rewarded teaching over scholarship.
2) Organize teaching along more rational lines. At present, teaching is organized around courses in which one instructor is responsible for everything - for transmitting information to students (supplementing what is in the textbooks), for stimulating and nourishing students' thinking, for grading and record-keeping.
Why should these functions all be performed by one person? And why should they take the form, as they often do, of the stupid and fatuous oral lecture method? The transmitting of information can be done much more effectively if the "lecturer" puts his or her lecture notes, in reader-friendly form, on paper (or on tape or CD, for those who insist they learn better aurally than visually) and pass these out to the students to read and re-read at their leisure. The information on a certain topic (e.g., the Civil War) could be provided for any number of classes (e.g. to all students studying American history) by the instructor who specializes in that topic.
With required information in the hands of the students, all the classroom time would be available for interaction between students and instructors. (I say "interaction" because the interaction would hopefully consist not only of a general discussion, but largely of exercises devised by the instructor to promote deeper understanding.) Under this arrangement, an instructor would know his or her students better, leading to more accurate grading and fewer term papers acquired from the Internet. Teaching in all aspects would be done more efficiently, leading to better education at less cost.
Volume 2, Issue 8, Posted 4:04 PM, 04.10.06