State College Budgets Balloon to Pay for Buildings, Sports, and Administrators

(p. A1) The nation’s best-known public universities have been on an unfettered spending spree. Over the past two decades, they erected new skylines comprising snazzy academic buildings and dorms. They poured money into big-time sports programs and hired layers of administrators.

Then they passed the bill along to students.

The University of Kentucky upgraded its campus to the tune of $805,000 a day for more than a decade. Its freshmen, who come from one of America’s poorest states, paid an average $18,693 to attend in 2021-22.

Pennsylvania State University spent so much money that it now has a budget crisis—even though it’s among the most expensive public universities in the U.S.

The University of Oklahoma hit students with some of the biggest tuition increases, while spending millions on projects including acquiring and renovating a 32,000-square-foot Italian monastery for its study-abroad program.

The spending is inextricably tied to the nation’s $1.6 trillion federal student debt crisis. Colleges have paid for their sprees in part by raising tuition prices, leaving many students with few options but to take on more debt. That means student loans served as easy financing for university projects.

“Students do not have the resources right now to continue to foot the bill for all of the things that the university wants to do,” said Crispin South, a 2023 Oklahoma graduate. “You can’t just continue to raise revenue by turning to students.”

It has long been clear to American families that the cost of college has gone up, even at public schools designed to be affordable for state residents. To get at the root cause, The Wall Street Journal examined financial statements since 2002 from 50 universities known as flagships, typically the oldest public school in each state, and adjusted for inflation.

. . .

(p. A9) Public university leaders often blame stingier state funding for the need to raise tuition revenue.

. . .

For every $1 lost in state support at those universities over the two decades, the median school increased tuition and fee revenue by nearly $2.40, more than covering the cuts, the Journal found.

. . .

Much of the increase in outlays showed up in the hiring process, for administrators, faculty, coaches and finance experts, the Journal’s analysis found. Salaries and benefits, which usually eat up more than half of operating budgets, rose by roughly 40% at the median flagship since 2002.

The University of Florida in 2022 had more than 50 employees with titles of director, associate director or assistant director of communications, roughly double the number it had in 2017. The school also employed more than 160 assistant, associate, executive and other types of deans last year, up from about 130 in 2017.

. . .

Though a handful of powerhouse sports departments pay for themselves, most can break even only with student fees and university subsidies. Across all flagships with available data, that additional funding totaled $632 million in 2022. That’s a jump of 27% from 12 years prior.

. . .

Research by James V. Koch, an economist who studies college spending and a former president at Old Dominion University in Virginia, found that public-university trustees approved 98% of the cost-increasing proposals they reviewed, often unanimously. In most states, he said, there hasn’t been anyone to say, “No, you can’t do that.”

Back in 2005, a Hawaii state audit called out the University of Hawaii System board for approving a budget that gave the flagship Manoa campus $200 million when, auditors said, all but $13 million went to vague or unnecessary requests.

Honolulu attorney Benjamin Kudo, who joined the university’s board in 2011, said he was stunned by the lack of information he was given during the budget process. He said he received a packet of pie charts and a PowerPoint presentation with general information on how the university planned to divide up its funds for areas including teaching, libraries, athletics and facilities across 10 campuses.

Kudo said administrators weren’t initially receptive to requests that he and another new board member, Jan Sullivan, made for more detail, including a comparison of projected versus actual spending. Kudo, who served on the board until 2022, recalled being accused of trying to micromanage the $1 billion budget.

For the full story, see:

Melissa Korn, Andrea Fuller and Jennifer S. Forsyth. “State Colleges ‘Devour’ Money, And Students Foot the Bill.” The Wall Street Journal (Friday, Aug 11, 2023): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date August 10, 2023, and has the title “Colleges Spend Like There’s No Tomorrow. ‘These Places Are Just Devouring Money.’”)

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