by Andrew Gillen
Yesterday afternoon, I heard someone say something along the lines of “today, students pay about a third of the total cost of educating them.” Given that this seems to be a reoccurring statement, I’d like to demolish the idea that “the total cost of educating,” based on current university practices, is a good benchmark to use. Just because students pay X, while schools spend 3X per student does not mean the students are getting a great deal, especially if X is close to Y, the cost of educating a student in a more rational system.
What should it cost to educate a student/ What is Y? The following table indicates the cost per student per class for instruction, assuming that you pay professors $100,000 a year.*
The yellow boxes indicate what I think are the most typical combinations of classes and students per class. Let’s say that professors teach six classes per year, and that the class size is 30. If a student takes 10 classes a year (15 hours a semester, more than the 12 hours that is typically considered full time), the amount spent to pay the professors for that student for the year is $5,560. If class sizes are 20, the amount spent is $8,330. Even if the class size drops to 15, the amount spent is only $11,110.
In other words, given current light teaching loads (typically six classes per year), fairly generous compensation of $100,000 per nine month year for professors, and a generous estimate of 20 students per class, the instructional costs per student per year should be around $8,330.
Compare this $8,330 to the current fund expenditures reported by the Digest of Education Statistics, which were $32,613 in 2000-2001 for 4-year public schools, and $37,768 in 1995-1996 for 4-year private schools. While there are certainly other legitimate costs for a university than paying the professors that teach, this would indicate that schools are spending around three dollars outside the classroom for every dollar they spend in it.
Where is all the money going?
At a 4-year school, realistic “instructional costs”** for educating a full time student (10 courses a year) are in the range of $3,130 (assuming professors teach 8 classes of 40 students a year) to $16,670 (assuming professors teach 4 classes of 15 students a year). And this is assuming all classes are taught by professors making $100,000 a year, not low paid adjuncts or graduate assistants. The actual price to most students falls in that range as well. The fact that schools spend multiples of these amounts is indicative of endemic wastefulness.
To sum up, saying that students are only paying X while it costs 3X to educate them, and trying to draw anything meaningful out of that is ridiculous when 3X bears no relation to the actual costs of providing instruction. In fact, the amount that students pay, X, is close to Y, the amount that it should cost to educate them in a more rational world. That’s a shame given the massive subsides that are given to try and make the price for students lower than the costs of educating them (to make X smaller than Y).
* The average salary for “full-time instructional faculty and staff” was $73,940 in 2003-2004, so a figure of $100,000 is fairly accurate once benefits are taken into account.
** "Instructional costs" include quite a bit of research. Light teaching loads inflate these figures by classifying non-sponsored research costs as instructional costs. For instance, for a professor without a research grant and with a common 3-3 teaching load (6 courses a year), the entire salary is thought of as an instructional expense, even though they only spend 9 hours a week in the classroom.