Cost of College Education

Quote from "The New York Times, Sunday, November 8, 2009 edition",

Prime Number
58
THE NUMBER OF PRIVATE COLLEGES THAT NOW CHARGE AT LEAST $50,000 a year for tuition, fees, room and board, according to the The Chronicle of Higher Education.  Last year, only five colleges charged that much.  Generous aid packages mean many students pay far less, the Chronicle noted.  Even so, the cost of a college education has grown much faster than the costs of other goods and services--up 4.3 percent this year at private colleges and 5.9 percent for instate students at public schools.

$200,000 for a four year degree!  The private colleges have the ability to quickly raise tuition to keep pace with the rising costs.  The public institutions do not have this ability.  Tuition increases have to be passed by state legislators who in turn are justifiably pressured by their constituents to keep the costs of a university education down.  Revenue measures aside, the cost of a university education is simply becoming too high for the middle class.  I suspect this is just another reflection of the widening gap between our middle class and the upper class (as measured by income levels).   Where will this all end?

I was recently asked to attend a meeting of Eastern Washington University officials and representatives for the Spokane area accounting profession to discuss the funding of an endowed chair of accounting that I occupied the last six years of my academic career.  Simply put, the endowment for the chair is not generating enough funds in the present economic environment.  As I sat at the conference table I learned that the full  time accounting faculty at EWU now total five.  Our department totaled 12 during it's prime approximately fifteen years ago.  I learned that they are currently recruiting two additional full time qualified faculty members.  How much does a new Ph.D. in accounting with no teaching experience get I innocently asked.  $150,000 per year plus benefits, if you can find one,  I was told.  Accreditation standards require that approximately 60% of the faculty have a PhD.  The numbers dictate that the recruits have PhD's.  Yet given that they were able to find two additional faculty who were PhD qualified, the department would still be seriously understaffed. Student enrollments in accounting have not declined significantly in the last 15 years.  Salaries have approximately trebled during this same period of time.  Now couple this with the fact that salaries make up approximately 90% of an academic department budget,  a history of budget contractions, recent budget cuts approaching 18%, and upcoming budgets cuts and you have a formula for disaster.  Actually, the disaster has arrived for the accounting major at Eastern Washington University.  By the way the "non-academic" side of the typical university has encountered even larger budget cuts than the academic side.

So what's my point?  Well I need to explain further.  When I occupied the E. Claire Daniels chair of accounting the funded chair allowed the accounting department to do some special incremental things; mainly, provide a dedicated faculty member (me) to provide a needed interaction/interface with the professional accounting community, both public accountants and private accountants.  It was "in addition" to what the University (State) provided (funded).  The endowed chair allowed us to provide a unique experience for the students and faculty alike ~ a "high profile" for the department in  the professional accounting community.

My "take" on the meeting I mentioned above indicated to me that now  the endowment is viewed by the university administration as a supplement to state funding, not incremental funding to enable the accounting department to get that little extra boast toward excellence.  The University appears not willing or unable to fund the department at its most basic level.  If the University is going to develop a model that relies on private endowments to fund the basic funding model, it isn't going to be without  "strings".   It is a slippery slope the university is approaching.   We are rapidly approaching the model that I discussed in a previous blog where the private sector will provide the technical training and the state will provide the liberal arts education ~  not a good model in my view.  And, I feel uncomfortable representing my university in an interaction with the accounting community as a result.

I am conflicted.  As a liberal, I appreciate and expect change ~ make it better and more reflective of our society.  As a "blue-dog" democrat with a conservative leaning, however, I realize that change does not automatically equate to "good" or even needed.  I am reminded of the recent financial mess in which we found (and find) ourselves.  There were good reasons why certain laws were passed in the 1930's.  Changing those laws in the name of "increased competition and efficiency" really turned out to be corporate greed and the restriction of competition though "largeness".  In my view, most of the changes were short sighted and stupid ~ period!  Maybe we should enact a law that makes greed and stupidity illegal !  :-)

We don't need to change the basic structure of higher education.  We need to support it and reinforce it.  And, most importantly, we need to keep it affordable to the populace.  How we do this is what troubles me this morning as I drink my coffee.  Society does not seem willing, let alone able,  to support higher education.

My contribution to "soup stirring" for the week!.  Other than that things are fine here on the shores of Lake Wo-be-Gone.

Gordon, et. al.