What’s it Cost?

An old friend of mine asked me the other day, “What portion of the accumulated student debt was for educational endeavors?”  He worked on a campus for a long time, not as a faculty or administrator but as a public safety officer: A cop. He watched the ebb and flow of students over a generation and had some concerns. Concerns about costs are not limited to families and students, administrators protecting their backs, finance officers balancing the books, admissions offices explaining away the ever-increasing cost and what it added to the benefits of a college education, or politicians running for cover. Remember, he was a cop asking a good question.  The answer may raise the hair on the back of your neck.

Nationally, the 2013 graduates of universities carried an average of almost $30,000 in debt.  Graduates from the top 10 debt-generating institutions leave with over $40,000 in debt. None are the familiar private elites.  The “Ivies” average a comparatively low $25,000 in debt.  On a state-by-state basis the top 10 states averages over $29,000 in debt.

With budget cuts to higher education looming, and real family income growth gasping, the percentage of family income dedicated to paying for college is mushrooming.  Arizona and Louisiana are two notably challenged states with appropriations decreases near 50%.  Only two jurisdictions, Alaska and North Dakota, register increased spending per student during the period of FY08 through FY14.

I am optimistic by nature but current circumstances strain my buoyancy.  Meeting the educational aspirations of students at reasonable costs is vital for economic growth.  The endlessly escalating cost of college is borne not by the states, or the federal government, but by students and families with after tax income.  Frequently debt is incurred by students unprepared for study, and unable to complete a degree, undermining the value of higher education for all.

It’s an embarrassment that is turning into a crime.

Here is the answer to the question.  The costs for a mid-sized research university in Illinois are used because they are typical, and differ only slightly from similar institutions, of which there are over a hundred nationally.  This is not a criticism of this university.  In fact, this institution has relatively low debt loads for graduates, and Illinois, the college’s home, ranks 15th nationally in average debt, with 70% of the graduates carrying an average of $28,543 in debt. No institution in Illinois is on the “high debt” list. For a high tax, high cost of living state, this is worth noting.  However, these facts command no complacency: And ignorance, real or feigned, provides no relief.

Broad brush strokes are used paint this picture.  I urge caution in taking too much from this breakdown.  All of the costs associated with this analysis are based on a 15 student credit-hour course load per semester. This assumes the student is full-time. It is also based on the assumption that the student is in-state and paying current rates of tuition and fees.

The tuition is $4,200 per semester. It is safe to assume 100% of that goes to academic costs — teaching and related educational support.

However, fees fuel the cop’s concern.

A student would pay $140 for the student center, $45 for student activity fees, $134 for the Student Recreation Center, $306 for the athletic fund, $9 for campus recreation, $620 for medical benefits, (It seems this should be obviated by the Affordable Care Act.),  $60 for bond retirement, $50 in mass transit assessments,  $80 to support information technology,  $80 for a new student services building,  $250 directed to facilities maintenance, $10 green fee, and $3 for student grants. Additionally, each student is assessed $6 to fund a student attorney.  All totaled, about $1,800 per semester.

The total tuition and fees, in round numbers, is $6,000 per semester.

Residence halls and all-you-can eat dorm food add an additional $5,000 each semester, totaling roughly $11,000 per semester or $22,000 per year.  A grand total of $88,000 for four years, not including other “supporting nuances” like Kewpie dolls, snacks, nights out, and oh, books — print or “e.”   Differences are matters of degree, not game changers.

Don’t trust me. Check your local State U.  Costs are relatively consistent across similar institutions. So, the average graduating student currently has about $30,000 in debt. Most graduates cannot even tell you how much they have borrowed.  And, troublingly, this does not include the nearly half who don’t graduate, are unaccounted for by transfer, part-time attendance, or disappear in a fogging morass of data.

Any way you cut it, borrowed resources pay for well less than half the educational costs. The balance is Life Style Support.  And, for transparency, the trends in Illinois are like 48 of 50 states in the nation: Costs have increased while state appropriations have decreased.

The answer to the question, “What portion of the accumulated student debt was for educational endeavors?” 

Much less than one-half while the student/family borne cost to maintain the status quo increases and perceived value falls.

What do you think is the answer to the question, “What’s it cost?”

4 thoughts on “What’s it Cost?

  1. These huge costs documented here are appalling. What would happen if some institutions eliminate the student center fee of $140 especially since the building itself is now a corporate mall rather than anything generated towards genuine student activities with franchises such as MacDonalds, Starbucks and other firms conspicuous not by their absence but dominating presence? Students can also take the initiative to engage in their own activities. They don’t need an institution to do this for them and this move would engender creativity and independence on their part. Athletics and the abolition of sports as opposed to education as well as selling the Recreation Center and Sports Stadium to private concerns could also help the University in these very hard times.

    With due respect Mark, this article is dealing with wasteful expenditure that makes the goal of education financially impossible for the majority of students. Could one reason for these rising costs be a stimulus to get young people into the military now that the draft is abolished? College costs could be one carrot on a stick assuming the survivors will be mentally and physically equipped to take advantage of such “glittering prizes” at the end of their tour of duty,

  2. I love this discussion. The “cost”…as you note…isn’t all that easy to figure. Of course a bunch of the cost that is “figured in” by FA formulas is “living”, but it’s not as if those “living” expenditures don’t sometimes end up back on University balance sheets. The entire dorm administrative structure is the most obvious case in point. But the fees have been an end around to increasing tuition for decades now, so to say they aren’t part of the “educational cost” is a bit disingenuous. Either way…it’s all kind of irrelevant to me at this point. And it gets a little to myopic distracting from the bigger economic realities of decades of expansion of the “student loan bubble”. There are many reasons it’s been expanded…political and crony corporate interests being the most primary, as is true in any corporatist society such as ours (that POLS and ECON and MCMA, etc etc don’t teach “corporatism” as a political/economic structure AND THE ONE WE EXIST IN TODAY is a complete travesty and exacerbates our problems as a society…it’s down right shocking and inexcusable to me).

    So lets think of a few ways…and their consequences. These student loans have been used to create artificial demand in the larger economy by an otherwise poor group…young adults…since the late 80s/early 90s. Similarly, it’s kept this group off the unemployment roles in large numbers (easy loans)…like the booming prison populations as well. It allows for an interesting “education” of entire generations as the Ivory Towers became less and less intellectually diversified…promoting a status quo couched in a PR screed that paints it as “fighting power”. The sycophant nature of academia today bears the consequences of decades of a tenure system that largely promoted people who bore the approved ideologies of the “modern progressive” (corporatist). It shackles the young…leaving them to “take what they can get” in the job market to pay their looming student loan bills. Mobility has been crushed…literally and figuratively…and by extension, control has been increased and innovative competition to the status quo politically and in business stymied at the same time. The list can go on and on but I’ll allow all of you to join in that mental exercise.
    The irony here is that probably the most important macro consequence economically is the same consequence that is undoing the centralized elite power structures in TBTF business, banks, politics and even higher education. The 20th c. set-up of our economic system requires consumption from the “working age demographic” to support the various ponzi schemes both private (the stock market and central banking system) and public (like S.S. and Medicare, etc.). You need the “buy in” of new people to support the early entrants because there is no real “trust funds” as with Social Security or the balance sheets of the TBTF banks (such of mortgage backs securities, etc.). These are “paper promises” with no real backing. Every student loan payment the size of the “average” you accurately presented (and you can roughly argue half would be higher still) is a car payment, a house payment, or BOTH that didn’t happen…and all the other asides not consumed which are required in our economic model. SS is getting closer and closer to that “two workers to pay for every one retiree” reality…it’s unsustainable. Much like the Illinois Pension system. Again…false promises made to 18-24 year olds led them to accumulate large debt loads to help “paint the tape” as they say on a market floor…to provide the image of a system that was working. There’s many other ways that combined to provide the illusion of prosperity for so long…but they all leveraged the future so that previous “young adults” in multiple generations could consume more than they paid for…and cronies in the system could get the contracts and holds the debt that might control the people of the future…MIGHT is the operative term. Having a lot of young people standing around with no optimism for the present (or the future) does not work out well historically. Just saying.

  3. This is interesting, but your summary calculations gloss over some expenses on which it would be interesting to get your take.

    How about administrative expenses caused by government mandates?

    There is a common complaint, among educators, students, parents, and across the political spectrum that administrative bloat has driven higher ed costs increases. However, I haven’t seen convincing analysis of the causes of this bloat. Sure, some venality and poorly designed incentives are likely in play, but I wonder whether there is anything else causing it. I really got to thinking about the problem of unfunded government mandates when this mid-sized research university you often discuss decided that it needed to train *every* employee on campus about crime-reporting to cover its federal Cleary Act obligations. That could not have been cheap! Since then, I keep spotting more and more obligations heaped on higher ed by politicians with no cost-benefit analysis (while they also cut budgets and hypocritically decry the increasing cost of education).

    People need to talk about this issue, and you’d provide useful insight.

Leave a Reply to Mark Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.