Lies Our Professors Tell Us
On Sunday, the Washington Post ran an op-ed by the chancellor and vice chancellor of the University of California, Berkeley, in which the writers proposed that the federal government start pumping money into a select few public universities. Why? On the constantly repeated but never substantiated assertion that state and local governments have been cutting those schools off.
As I point out in the following, unpublished letter to the editor, that is what we in the business call “a lie:”
It’s unfortunate that officials of a taxpayer-funded university felt the need to deceive in order to get more taxpayer dough, but that’s what UC Berkeley’s Robert Birgeneau and Frank Yeary did. Writing about the supposedly dire financial straits of public higher education (“Rescuing Our Public Universities,” September 27), Birgeneau and Yeary lamented decades of “material and progressive disinvestment by states in higher education.” But there’s been no such disinvestment, at least over the last quarter-century. According to inflation-adjusted data from the State Higher Education Executive Officers, in 1983 state and local expenditures per public-college pupil totaled $6,478. In 2008 they hit $7,059. At the same time, public-college enrollment ballooned from under 8 million students to over 10 million. That translates into anything but a “disinvestment” in the public ivory tower, no matter what its penthouse residents may say.
Since letters to the editor typically have to be pretty short I left out readily available data for California, data which would, of course, be most relevant to the destitute scholars of Berkeley. Since I have more space here, let’s take a look: In 1983, again using inflation-adjusted SHEEO numbers, state and local governments in the Golden State provided $5,963 per full-time-equivalent student. In 2008, they furnished $7,177, a 20 percent increase. And this while enrollment grew from about 1.2 million students to 1.7 million! Of course, spending didn’t go up in a straight line — it went up and down with the business cycle — but in no way was there anything you could call appreciable ”disinvestment.”
Unfortunately, higher education is awash in lies like these. Therefore, our debunking will not stop here! On Tuesday, October 6, at a Cato Institute/Pope Center for Higher Education Policy debate, we’ll deal with another of the ivory tower’s great truth-defying proclamations: that colleges and universities raise their prices at astronomical rates not because abundant, largely taxpayer-funded student aid makes doing so easy, but because they have to!
It’s a doozy of a declaration that should set off a doozy of a debate! To register to attend what should be a terrific event, or just to watch online, follow this link.
I hope to see you there, and remember: Don’t believe everything your professors tell you, especially when it impacts their wallets!
Taxpayers, Anyone? And How About Tuition Inflation?
The Student Aid and Fiscal Responsiblilty Act will probably be approved by the House of Representatives today, and to push it along the bill’s sponsor, Rep. George Miller (D-CA), makes clear for whom he is working:
Let’s remember whose voices really matter here. It’s time to listen to our students and our families.
First of all, do the voices of taxpayers not matter at all? You know, the folks who are going to foot the bill for all this largesse? Oh yeah – concentrated benefits, diffuse costs. And have students and their families really been trees falling in the wilderness with no one to hear them? With inflation-adjusted aid per full-time-equivalent student (table 3) rising from $4,454 in 1987 to $10,392 in 2007 — a 134 percent increase — it sure doesn’t seem so.
In fairness, the bill’s proponents have paid lip service to taxpayers, saying with straight and utterly deceptive faces that SAFRA won’t cost taxpayers a dime. The thing is, not only is this totally unsupportable according to several Congressional Budget Office analyses, it completely ingores that tax money is covering all of the costs of the bill. SAFRA would simply transfer taxpayer ducats from backing ostensibly private loans to loans directly from Washington, as well as lots of other federal expenditures.
And then there’s this: SAFRA supporters can talk all they want about helping students and families, but increasing grants and loans ultimately just hurts college-goers. Why? Because colleges and universities raise their prices to capture every additional penny of aid, as basic economics makes clear they would. So the only people politicians are ultimately helping are colleges, and by appearing to care ever so much about likely voters, themselves.
Filed under: Education and Child Policy; Finance, Banking & Monetary Policy; Government and Politics; Tax and Budget Policy
A Look Inside the Ivory Tower Spiral
With the Obama Administration promising to ramp up all sorts of college-affordability (read: government expenditure) efforts in the coming months, now is a crucial time for Americans to understand why our colleges and universities ingest money as bottomlessly as their students guzzle beer. With that in mind, the release of a new report from the John William Pope Center is perfectly timed. The Revenue-to-Cost Spiral in Higher Education explains how colleges’ internal arrangements render them almost destined to spend every dime they bring in, no matter how wastefully. The basic problem, argues author and economist Robert E. Martin, is that very few colleges and universities are intended to make a profit — which would give “owners” a powerful incentive to maximize efficiency – and no one really seems to be in charge at most schools.
Of course, this is a serious over-simplification of Martin’s argument, so you’ll have to read the report. But don’t just stop there: A few weeks ago the Pope Center held a colloquium right here at Cato to discuss the report, and Pope Senior Writer Jay Schalin just posted an excellent summary of the back-and-forth between participants. I think you’ll find the points about the third-party-payer problem especially powerful, but there are lots of other good arguments highlighted as well.
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