This commentary originally appeared in Forbes on May 11, 2015.
For years now, students, parents, and taxpayers have worried over college-tuition hyperinflation and its concomitant, massive student-loan debt. And for good reason. Over the past quarter-century, average tuition prices have increased 440 percent—far more than the Consumer Price Index and even health-care costs over the same period. In an attempt to foot the ever-higher bills for college, students (and their parents) have burdened themselves with historically high student-loan debt. At roughly $1.2 trillion, student-loan debt stands above total national credit-card debt for the first time in history.
Just as often as we hear the dismal facts about the growing unaffordability of college, we hear from defenders of the higher-education status quo that the fault lies not with universities but with stingy state lawmakers, who, we are told, have been “cutting funding for schools.”
But this mantra could be on its way out. In a recent New York Times editorial, Paul Campos, a University of Colorado, Boulder law professor, offers what deserves to be the final word on the “funding-cuts-made-us-raise-tuitions” myth. And what a myth it is, as he demonstrates compellingly in the piece: “It is a fairy tale in the worst sense, in that it is not merely false, but rather almost the inverse of the truth.”
To begin, Campos reveals that public funding for higher education is “vastly larger” now than it was during the alleged “golden age of public funding in the 1960s.” While the U.S. military budget is roughly 1.8 times larger than it was fifty years ago, during the same period, “legislative appropriations to higher education are more than ten times higher.” Tuition hyperinflation, rather than being a direct effect of “funding cuts,” instead “correlates closely with a huge increase in public subsidies for higher education.” To make this point more concrete, he reminds us that, “if over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.”
Doubtless, a portion of the increased spending in higher education can be accounted for by the rise during the last two decades in the percentage of the population attending college, which Campos recognizes. Hence, although state funding for higher education has risen far faster than inflation, dollars appropriated per student are now less than they were “at their peak in 1990.”
Nevertheless, Campos is right to remind us that “appropriations per student are much higher than they were in the 1960s and 1970s, when tuition was a small fraction of what it is today.” Moreover, “by 1980, state funding for higher education had increased a mind-boggling 390 percent in real terms over the previous twenty years.” But did this “tsunami of public money” help reduce tuition? No. “Quite the contrary.”
Campos derides as “disingenuous” those defenders of the higher-education status quo who label a “large increase in public spending a ‘cut’ . . . because a huge programmatic expansion features somewhat lower per capita subsidies.” Here he provides another illustrative example: If the government had doubled the number of military bases since 1990, “while spending slightly less per base,” the charge that “funding for military bases was down,” although such funding “had nearly doubled, would properly be met with derision.” And yet this is precisely the narrative governing current discussions of the relation between government funding and tuition increases.
My own analysis of the relation between state funding and university tuitions and fees in Texas, the nation’s second largest state, echoes Campos’s findings. According to data provided by the Texas Higher Education Coordinating Board, between 2000 and 2010, state funding for Texas public higher education dropped 15.9 percent on an inflation-adjusted, per-fulltime-pupil basis. During the same period, Texas university tuition and fees rose 76.1 percent. The truth behind the “funding-cuts-made-us-raise-tuitions” myth, then, is this: There has been a mild decrease in state funding that has been accompanied by a wild increase in university tuitions and fees.
Lest his analysis be smeared as “professor-bashing,” Campos is quick to point out that teachers are not the ones getting fat on this deal. Far from it. Fulltime faculty salaries today are, “on average, barely higher than they were in 1970.” Where, then, is all the taxpayers’ money going? Between 1993 and 2009, administrative positions increased at “ten times the rate of growth of tenured faculty positions.” A study of the California State University System finds that, while fulltime faculty members increased “from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183—a 221 percent increase.”
Campos’s focus on the role of administrative costs is supported by the findings of Benjamin Ginsberg’s research, published in his 2011 book, The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters. In aWashington Monthly piece titled, “Administrators Ate My Tuition,” Ginsberg presents the book’s highlights. “Forty years ago,” he writes, “U.S. colleges employed more faculty than administrators. But today, teachers make up less than half of college employees.” Adjusting for inflation, from 1947 to 1995, “overall university spending increased 148 percent. Administrative spending, though, increased by a whopping 235 percent. Instructional spending, by contrast, increased only 128 percent, 20 points less than the overall rate of spending increase.”
Ginsberg also finds that senior administrators have done particularly well of late. From 1998 to 2003, deans and vice presidents saw their salaries increase as much as 50 percent. “By 2007, the median salary paid to a president of a doctoral degree-granting institution was $325,000. Eighty-one presidents earned more than $500,000 and twelve earned over $1 million.” Surveying these increases, a Chronicle of Higher Education report notes the difficulties that public university CEOs face when arguing that their “budgets have been cut to the bone . . . while at the same time acknowledging their rarified personal financial circumstances in states where layoffs, program closures, and pay reductions have been all too common.”
Although Campos grants that arguments might be made to defend both the boom in college enrollment and “even the explosion in administrative personnel,” he finds “no valid arguments” by which to justify the “recent trend toward seven-figure salaries” for senior administrators.
Equally indefensible is the claim offered by some of these same highly-paid administrators that “tuition has risen because public funding for higher education has been cut.”
One can only hope that the evidence provided by Campos, Ginsberg, and others will drive a stake through the heart of the “funding-cuts-made-us-raise-tuitions” myth. But don’t count on that happening just yet. The myth, Campos concludes, is as “ubiquit[ous]” as it is illusory. As long as it continues to be an unquestioned staple of the media narrative, there will be a future for this illusion, and with it, the discontents driven by disinformation.