Ignorance Is Not Bliss Regarding Spending on Athletics

By Richard Vedder*

Amidst fiscal problems requiring growing austerity in higher education, intercollegiate athletic programs still continue to grow, despite increasing subsidies coming from college/university general funding. What do students think about this?

To answer this question, my colleagues Matt Denhart and David Ridpath (also a professor at Ohio University) surveyed about 1,000 students at Ohio University, which is a member of the Mid-American Conference and is a fairly typical mid-quality state university. Their results, just published by the Center for College Affordability and Productivity (which I direct) in Ending the Arms Race: A Case Study of Student Athletic Fees, are very revealing. They find that:

• Most students severely underestimate the amount that their fee payments to the university subsidizes intercollegiate athletics (ICA);
• a majority felt that their were other sorts of extracurricular activities deserving of subsidy support more than ICA (but which, in fact, receive far less support);
• Fewer than 7 percent of respondents felts ICA reputation was “important” or “extremely important” in their enrollment decision—a majority thought it was “extremely unimportant;”
• Over 35 percent of students attend no sporting events, despite having to pay $765 in fees to support ICA, about 8 percent of their total charges;
• On average, each surveyed student paid indirectly well over $150 for each athletic event attended.

In short, most students are relatively indifferent about sporting events, are ignorant of the costs, and not in favor of as high athletic subsidies as they are being charged. I would suspect if the same questionnaire were given to their parents, the preference to scale down ICA subsidies would be even more pronounced.

The CCAP study will be criticized on two major grounds. First, it is not representative of students at Ohio University, and second, Ohio University is not representative of American higher education in general. The first criticism is largely bogus, I suspect, while the second one may be correct, but the CCAP study points to the need for more research.

My reading of the study suggests the sample selected, while clearly is not random (although all students were invite to participate—not all did), was probably pretty representative of the student body. For example, the typical number of sporting events attended annually for the sample (the mean was about five) seems to be pretty close to that for the student body as a whole. Looking more broadly, the Denhart/Ridpath results are quite consistent with those reported on a similar survey at the University of Toledo, suggesting the findings are probably representative of a broader body of schools than just Ohio U. Still, the study points out the need to explore this at schools where the subsidization of athletics is less (Ohio U. is well above average regarding subsidization of ICA). Denhart and Ridpath want to do this, and I hope funding is secured to allow that to happen.

Two questions arise. Why is this university, and probably others, spending far more on ICA than its customers (and almost certainly their parents, not to mention the school’s faculty) want? Two, what can and should be done about it?

Successful university presidents (in the sense of being popular with high job security) stay in office by raising lots of money and bribing various interest groups—by giving students a low workload and access to booze and sex; giving faculty low teaching loads and the freedom to teach what they want (more or less) for decent pay; and giving alums good success in ICA, along with nice new facilities to visit while on campus. Unfortunately, in their zeal to satisfy one group (alumni and perhaps trustees) with fairly high quality ICA (although ironically, Ohio U.’s success can at best be termed “modest” in recent years), presidents have created increasing unrest with other constituent groups angry about the continued high ICA budgets amidst falling budgets elsewhere in the university and rising costs to students.

With respect to solutions, this is like the arms race during the Cold War. One side is not going to unilaterally disarm. All parties need to sit down and impose limits—maximum size budgets (with accounting procedures uniformly defined), for example. “All parties” could be a grouping as small as the university presidents of a single athletic conference, but more likely would require even bigger disarmament deals—say, involving presidents of all BCS schools, all Division II schools, etc. (The cost explosion is present at Division II and III schools as well as the Division I institutions, if NCAA statistics are to be believed.)

The worst part of all of this the lack of transparency. Often students, faculty, major donors, etc., are in the dark as to the finances of ICA, and even what they are paying. Often this is accompanied by misleading statements by administrators on the alleged benefits of ICA, almost always grossly exaggerated. Increasingly universities are spending large parts of their budgets on things unrelated to the core academic mission. Whether universities should be in the entertainment business (e.g., ICA), food and lodging business, etc., is highly dubious to me. Institutions that focus with a laser beam on one or at most two tasks are more successful, I think, than those trying to be all things to all people. The new CCAP study needs to be replicated by others to strengthen the hand of those wanting athletics disarmament.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on January 31, 2011.

Academically Adrift: A Must Read

By Richard Vedder*

The most significant book on higher education written in recent years is out, Academically Adrift: Limited Learning on College Campuses, by Richard Arum of New York University and Josipa Roksa of the University of Virginia. While I have not read every word of this new University of Chicago Press book, I have read enough of it and an accompanying summary to know that it is very, very important, and extremely devastating in what it says about American higher education today. Basically, students study little and, as a consequence, learn little.

Arum and Roksa wed data from two very important but underutilized test instruments, the Critical Learning Assessment (CLA), and the National Survey of Student Engagement (NSSE). These instruments are used at hundreds of schools, and the Arum and Roksa book is based on detailed results from a good sized sample of students from 29 institutions. The CLA measures things such as aptitude with respect to critical learning and writing skills, while the NSSE mostly measures how students are engaged at school, in large part measured by how they use their time.

For the reader not familiar with some of the findings, Arum and Roksa conclude:

• “gains in critical thinking, complex reasoning, and writing skills (i.e., general collegiate skills) are either exceedingly small or empirically non-existent for a large proportion of students”;
• 36 percent of students experienced no significant improvement in learning (as measured by the CLA) over four years of schooling;
• less than one-half of seniors had completed over 20 pages of writing for a course in the prior semester;
• total time spent in academic pursuits is 16 percent; students are academically engaged, typically, well under 30 hours per week;
• scholarship from earlier decades suggest there has been a sharp decline in both academic work effort and learning;
• “students…majoring in traditional liberal-arts fields…demonstrated significantly higher gains in critical thinking, complex reasoning and writing skills over time than students in other fields of study. Students majoring in business, education, social work , and communications had the lowest measurable gains”;
• 35 percent of the students sampled spent five hours or less a week studying alone; the average for all students was under 9 hours.

Critics will no doubt argue that the CLA is an imperfect test instrument or that the sample of schools was too small and unrepresentative. What strikes me most, however, is that these findings are similar to those found in other studies (e.g. the Time Use Survey of the Bureau of Labor Statistics), and with my own personal observations based on a half century of involvement in higher education in all types of institutions ranging from mid-quality state universities to elite private liberal-arts colleges and prestigious private research institutions.

Moreover, the survey seems to confirm that many of the modern-day trends in higher education have lowered the quality of the educational experience. “Collaborative learning” is all the rage, and students are encouraged to work in groups—the Arum and Roksa study, however, suggests that studying alone is more effective than studying in groups. Another trend is the decline in the “market share” of the traditional liberal arts disciplines—social and natural sciences and the humanities—yet students in these disciplines seem to be learning more. To be sure, the communications and business majors are sometimes picking up vocational skills that are useful, which are not measured by the CLA.

To me, this above all further strengthens the thinking of scholars ranging from Robert Hutchins and James Bryant Conant (to go back more than a half a century) to Charles Murray today. As the proportion of the population going to college rises, more and more of them are simply not suited for academically rigorous forms of higher learning. Consequently, schools dumb down the curriculum, engage in grade inflation, etc.

Why, then, do college graduates continue to earn a healthy premium over high school graduates? In part, because, despite being relatively lazy and relatively unchallenged in school, college graduates are still smarter, more ambitious and more disciplined than the graduates of our relatively mediocre (on average) secondary schools. College is an expensive (to students) screening device, and one that is increasingly emphasizing the socialization dimensions of young adulthood over the dissemination of true knowledge and ideas. We are sending too many kids to school to learn too little to get jobs for which often the little that they do learn is not even necessary.

Ultimately, the public policy question is why the financially strapped federal government provides billions of dollars to subsidize students participating in the increasingly expensive and hedonistic experience we call “higher education?” Why do states subsidize the institutions that are responsible for this decline, rather than directly supporting a modest number of serious, hard-working and financially needy students? Why is higher education so dysfunctional, and becoming more so daily? When is the bubble going to burst? Run; do not walk, to the store to get this book.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on January 20, 2011.

New Evidence That College is a Risky Investment

By Richard Vedder*

Many published studies argue that higher education as a private investment yields a high rate of return—10 percent is a commonly cited figure. It is argued that you can do much better investing in higher education than in, say, real estate, stocks, or bonds. I have always been very skeptical of these studies, and two new papers support my view.

I have been saying for years that there is a huge risk that new college entrants will drop out, and that published academic studies usually implicitly look at those who graduate, ignoring a roughly equal number who fail to graduate from college in a timely manner. That is the huge flaw in the Does College Pay? studies annually produced by Sandy Baum for the College Board.

Now two studies, both presented at the American Economic Association meetings in Denver last week, make the same point. In “College Risk and Return,” Gonzalo Castex suggests a large part of the extraordinary (above normal) returns of college are explainable by the compensation needed for risk-averse persons to take the risks of going to college—the risk they might not make it through. Roughly the same thing is argued, albeit a bit differently, by Kartik Athreya and Janice Eberly in “The Education Risk Premium.”

When the return on something is high, investors flock to it, eventually reducing the return to a more “normal” return. Thus when Apple seemed to be making millions of new profits from the hugely popular iPad, dozens of imitators appeared with tablet devices—within months. But seemingly that phenomenon has not happened in higher education—enrollments have risen, but rather sluggishly, and not enough, it would seem, to increase the supply of college graduates enough to depress their average wage and thus the return on college investments.

The reason is that in some risk-adjusted sense, the return to higher education is NOT that unusually high, since the risks associated with “buying” an education are actually greater than buying, say, stock in Procter & Gamble: The probability of essentially losing the investment (by failure to graduate) is greater in higher education than in blue-chip stocks or certainly bonds.

Other evidence suggests that we may be entering an age where the risk-adjusted return on higher education, actually near that of other investments in the past, may be falling below the gains from these alternative opportunities. Tuition fees continue to rise sharply relative to the incomes of college graduates. More college graduates are taking low-paying jobs, say as waiters or cashiers in stores.

As former Spellings Commission chair Charles Miller reminded me the other day, if we reduce the price of higher education through productivity-enhancing changes in higher education, the rate of return will rise. Lower-than-normal returns in higher education can be remedied two ways: by reducing costs (and thus the size of the investment) or by increasing the wage premium associated with college by restricting the supply of growth of new college graduates. Or both.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on January 10, 2011.

Too Many Ph.D.’s and Professionals?

by Richard Vedder*

In two blogs in this space (here and here) that stirred up some interest (80 comments), I presented evidence that a large portion of those receiving bachelor’s degrees at American colleges and universities these days are getting jobs requiring less-than-college-level educational skills. I went on to argue that this is further evidence that the strategy of trying to dramatically increase the number of those with degrees may be counterproductive, and that we in fact in one sense are “overinvested” in higher education—that more people are getting degrees than the number of jobs available that traditionally have gone to college graduates (for a complete study on this topic, click here).

Mentioning this, however, leads to two fears. One is that some people, for whom college is almost certainly likely to be a good investment of time and money, might decide to forgo an education, to their detriment and that of society. There are still a good number of students who benefit from a college education.

However, I have a second, seemingly contradictory fear: that as college grads learn of the job/degree imbalance, they will try to get around the problem in some cases by inappropriately going to school even more, by getting a master’s or even doctoral degree, or perhaps become a member of the professions—becoming, say, a lawyer. The Bureau of Labor Statistics data suggest that the problem of underemployment or over-education (taking jobs requiring vastly less education than that acquired) extends very much to still higher levels of learning, to advanced degrees.

Consider the following. Looking at BLS data for 2008, over 10,500 persons with Ph.D. or professional degrees were employed as “cashiers” (excluding gaming); over 27,400 were retail salespersons; and well over 4,700 were hairdressers, hairstylists, or cosmetologists. My sidekick Chris Matgouranis found 10 occupations like these: the ones listed above plus waiters and waitresses, landscaping workers, amusement and recreation attendants, receptionists and information clerks, secretaries (except legal, medical, and executive), truck drivers (heavy and tractor-trailer) and electricians. Collectively, these occupations had well over 74,000 with doctorates or such professional degrees as a J.D. Other evidence confirms this. The Wall Street Journal recently reported that 29 percent of new lawyers were not doing legal work, consistent with the notion that there is a glut of those with doctorates and some professional degrees. The Economist recently published an article presenting evidence of very dim job prospects for many new Ph.D.’s.

To be sure, some of this is related to the recent prolonged economic downturn. Yet stories of, say, historians, with doctorates doing all sorts of non-history type work, have been around for years. Training Ph.D.’s and professionals is extremely expensive—often six-digit amounts for the post-bachelor’s training, only part of which is billed to the student. Why are we doing this? Why, for example, doesn’t the U.S. go to perhaps 30 or 40 Ph.D. programs in history (instead of 100 or more), to train perhaps one-third the number of students that we train now? That would be enough to keep us from losing touch with our heritage, and would allow us to continually record and analyze our ever-growing past, and continue to disseminate that knowledge to a broader public.

The argument sometimes used to keep graduate programs is they are is that relatively low-paid graduate students are doing a lot of the undergraduate teaching. But does that not really mean that such students are doing work traditionally done by faculty, who don’t want to have to stoop to teaching lowly undergraduates? And the fact that graduate students in some disciplines, including the humanities, often take eight or more years to get their degrees suggests that the true cost of these degrees (including the value of work foregone while in school) is even higher than the mere tuition fees, etc., would indicate.

Many programs are kept, of course, because the faculty members teaching them want to keep their jobs, or simply prefer teaching advanced graduate students. In other cases, the institution equates prestige and status with offering a large number of graduate/professional programs, and thus resists abandoning them. One of the healthy byproducts of the financial squeeze facing some schools as a consequence of weak business conditions is that out of sheer desperation they are being forced to abandon some of these programs that make little sense on any sort of rational cost-benefit analysis.

In a pure unfettered market economy, there are no such things as “shortages” or “gluts” of any type of worker—wages adjust to meet market conditions. If we are turning out too many historians, their pay will reach such low levels that few new candidates will pursue that field. But the combination of subsidies (mostly publicly but some privately financed) and nonprofit institutional status leads us to continue to produce highly trained individuals who do things that society does not find very valuable. When the political process, rather than market process, controls resource allocation and compensation, we tend to get undesirable results.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on January 5, 2011.

University Financial Crises: Lessons From Ancient Rome

By Richard Vedder

In ancient times, the Romans engaged in enormous building programs, particularly in Rome itself, which they largely financed by raiding the provinces for tribute. Rome started to fall when the marginal costs of maintaining the empire began to exceed the marginal revenue extracted from it, coupled with excessive spending in Rome, under direction of emperors of dubious quality such as Nero.

Sounds pretty similar to American higher education. Vast spending and empire-building in the 1970s through 1990s was partially financed by taking tribute from taxpayers and private philanthropists. In the last few years, though, tribute collections (taxpayer support) became more limited while the spending on a lavish capital (i.e. the university campus) continued relatively unabated. Rome built the Colosseum shortly after Nero’s disastrous rule, late in the first century A.D., and the “bread and circuses” approach to appease restless masses did not stem the decline: It actually accelerated it.

Fast forward a couple thousand years to American college campuses. Like in ancient Rome, stadium-building and other forms of bread and circuses today (climbing walls and luxury dorms) are hiding an increasingly rotten institutional setting that often suffers from both mission failure and excessive spending. Most colleges and universities have not clearly articulated what they want to do, have done a crummy job of even measuring what they have accomplished, and have viewed university resources as something that need to be spent in a way to minimize discontent from alumni, administrators, and occasionally students and faculty—rather than to achieve a well defined academic goal.

I was reminded of all of this in the last week or two at my own university. Like most states, Ohio is having huge budget problems, and my university likely faces sharp (15 percent or more) reductions in state subsidy payments in the coming couple of years. Prospects are great that staff will be discharged, programs will be eliminated, etc. Already I am told that my telephone probably will have to go, and if I want to talk to anyone more than a few feet away, I will have to pay for it myself. But is the university really engaging in austerity programs, looking for new models to teach more cheaply, lower costs of auxiliary services, etc.?

Maybe, but actions speak louder than words, and the reality is that it is actually accelerating spending on what is apparently its top priority: intercollegiate athletics. (Under the current president, the academic reputation of Ohio University has sagged, falling more than 20 positions in the U.S. News & World Report rankings in just 6 years. Never mind: The path to success, we are told, is being very good at throwing balls).

Our moderately decent football team managed to win eight games and get into the least prestigious of the bowl games, the iconic R+L Carriers New Orleans Bowl—one of 35 bowl games this season. Attendance was allegedly 29,159, but most observers I know guessed the number at much less (and there were at least 43,809 empty seats in the Super Dome). Ohio University was correctly worried that hardly any students would attend, which would be embarrassing, so they offered several hundred students transportation from several Ohio cities, lodging (at a Hilton hotel), tickets, etc.—all for $40. This promotion cost the university conservatively $150,000, more than the annual subsidy of its highly regarded Ohio University Press, which will probably close because of declining university support.

Our team got slaughtered in a lopsided contest, and beyond having to heavily subsidize students to attend, it costs the university to participate—as opposed to major bowls, like the Rose Bowl, where participants reap millions in revenues.

But that is not all. We are told we cannot “reach the next level” in athletic greatness without a new indoor practice facility, so, voila, a $10-million grant for a “multipurpose” facility (translation: indoor football field) has just been announced from a wealthy alum who obviously has been conned into believing the bread-and-circus approach to greatness. No doubt, had that facility existed, my university would have lost to Troy State by maybe only 10 points instead of more than 25.

Meanwhile, funding for other politically correct but otherwise dubious smaller projects continues, including replacing a “sustainability coordinator” whose main claim to fame was advocating that we eat locally grown organic foods, which is a bit hard in a area with very little farming and poor soil.

Across the country, schools are following the Emperor Nero approach of overbuilding, overspending, and ignoring reality (a cautionary note: it caught up with Nero, who died at the age of 30 after a reign of but 14 years). The University of Michigan, in the midst of high double-digit unemployment and declining state-subsidy support, spent an amount approaching a good hunk of the annual GDP of some small poor nations on making its stadium bigger and providing more comfort for the über-rich attending football games. At some schools, where academics gets more than lip service, the spending is for superstar faculty who rarely see students; at others, for sumptuous facilities, to create a country club El Dorado around those boring things called classrooms, libraries, and laboratories.

Will this continue indefinitely, or will sanity and realism finally reach the academy? Already, cash-flow problems are forcing schools to furlough staff, reduce salaries (University of California), and the like out of desperation. But is this the beginning of a true rationalization and restructuring of a bloated enterprise that has been for far too long accountable to no one? I don’t think so—not without more fundamental organizational reforms—but stay tuned.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on December 21, 2010.

The Great College-Degree Scam

By Richard Vedder*

With the help of a small army of researchers and associates (most importantly, Chris Matgouranis, Jonathan Robe, and Chris Denhart) and starting with help from Douglas Himes of the Bureau of Labor Statistics (BLS), the Center for College Affordability and Productivity (CCAP) has unearthed what I think is the single most scandalous statistic in higher education. It reveals many current problems and ones that will grow enormously as policymakers mindlessly push enrollment expansion amidst what must become greater public-sector resource limits.

Here it is: approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less. Only a minority of the increment in our nation’s stock of college graduates is filling jobs historically considered as requiring a bachelor’s degree or more. (We are working to integrate some earlier Edwin Rubenstein data on this topic to give us a more complete picture of this trend).

How did my crew of Whiz Kids arrive at this statistic? We found some obscure but highly useful BLS data for 1992 that provides occupational/educational attainment data for the entire labor force, and similar data for 2008 (reported, to much commentary, in this space and by CCAP earlier). We then took the ratio of the change in college graduates filling these less skilled jobs to the total increase in the number of college graduates. Note I use the word “increase.” Enrollment expansion/increased access policy relates to the margin—to changes in enrollments/college graduates over time.

To be sure, there are some issues of measurement, judgment, and data comparability. With this in mind, I had my associates calculate the incremental unskilled job to college graduate ratio using different assumptions about the data. Even with alternative assumptions, a majority of the increased college graduate population is doing jobs that historically have been filled by persons with lesser education.

The exact numbers in the initial calculation are broken down as follows: In 1992 the BLS reports that total college graduate employment was 28.9 million, of whom 5.1 million were in occupations which the BLS classified as “noncollege level jobs” while in 2008 the BLS data indicate that total college graduate employment was 49.35 million, with 17.4 million in occupations classified as requiring less than a bachelor’s degree.

An example or two from specific occupations is useful. In 1992 119,000 waiters and waitresses were college degree holders. By 2008, this number had more than doubled to 318,000. While the total number of waiters and waitresses grew by about 1 million during this period, 20% of all new jobs in this occupation were filled by college graduates. Take cashiers as well. While 132,000 cashiers possessed college degrees in 1992, by 2008, 365,000 cashiers were college graduates. As with waiters and waitresses, 20% of new cashiers since 1992 are college graduates. (The sources for all of these data are Table 1 of the Summer 1994 Occupational Outlook Quarterly and the Employment Projection Program “Occupations” tables on the BLS Web site)

Six quick observations on these numbers:

First, the push to increase the number of college graduates seems horribly misguided from a strict economic/vocational perspective. It is precisely that perspective that is emphasized by those, starting with President Obama, who insist that we need to have more college graduates.

Second, the data suggest a horrible decline in the productivity of American education in that the “inputs” used to achieve any given human capital (occupational) outcome have expanded enormously. More simply, it takes 18 years of schooling (including kindergarten and the typical fifth year of college to get a bachelor’s degree) for persons to get an education to do jobs that a generation or two ago people did with 12-13 years of education (graduating more often from college in four years and sometimes skipping kindergarten).

Third, a sharp rise in the dependency ratio—those too old or too young to work relative to the work age population is coming because of the aging of the American population. This means we need to increase employment participation in younger ages (e.g., 18 to 23) where participation is low today because of the rising college participation rate. The falling productivity of American education is aggravating a serious problem—a shortage of workers to sustain a growing population of those unable to care for themselves.

Fourth, all of this supports the notion that credential inflation arises from a perceived need by individuals to demonstrate potential employment competence through a piece of paper, i.e. a college diploma. Employers are using education as a screening and signaling device, at a low cost directly to them (although not costless because of the taxes they pay to sustain much of this), but at a high cost to the prospective employees and to society as a whole.

Fifth, this shows that the current problem of college student employability is not a new, and merely temporary, problem.

Lastly, I am saddened that this is happening. Many of those advocating more access are well meaning and have pure motives, but they are ignorant of the evidence. But higher education is all about facts, knowledge—learning how the world works and disseminating that information to others. Some in higher education KNOW about all of this and are keeping quiet about it because of their own self-interest. We are deceiving our young population to mindlessly pursue college degrees when very often that is advice that is increasingly questionable.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on December 9, 2010.

Is the Pen Mightier Than the Sword?

By Richard Vedder*

Books criticizing higher education are not new, but recently both the number of them and the intensity of criticism has been increasing, and a large portion of them are “inside jobs,” written by people who are intimately involved on a regular basis with the academy and the world of ideas.

Consider Jackson Toby’s The Lowering of Higher Education in America, or Andrew Hacker and Claudia Dreifus’s Higher Education: How Colleges are Wasting our Money and Failing Our Kids, Mark Bauerlein’s The Dumbest Generation, or Craig Brandon’s The Five Year Party: How Colleges Have Given Up on Educating Your Child and What You Can Do About It. All have been written in the last year or so, and this list is not exhaustive.

More are coming: I cannot wait to read Naomi Riley’s The Faculty Lounges…And Other Reasons That You Won’t Get the College Education You Pay For, forthcoming from Rowman and Littlefield. Moreover, other books are scathing about specific areas of the academy, notably intercollegiate athletics, with Kenneth Armstrong and Nick Perry’s Scoreboard, Baby: A Story of College Football, Crime and Complicity, or Mark Yost’s Varsity Green: A Behind the Scenes Look at Culture and Corruption in College Athletics, being but two good examples (I am indebted to the extraordinary Frank Splitt for bringing some of these works to my attention).

All of these books have come out, roughly, within a year. Two have provocative words like “crime” or corruption” in their titles, yet the authors are by and large a group of rather respected persons, one a distinguished English scholar at a major research university, for example; at least two of the books were published by university presses, including Stanford.

I don’t know if writings like this are a leading indicator of a forthcoming firestorm of public protest about higher education, but it is not a good sign. Economists like myself think at the margin. In this context, the storm of protest will manifest itself in real action only when the marginal benefits of complaining become so great that they exceed the marginal costs of engaging in protests.

Usually the “sword” of university political power is manifested in lobbying of politicians, who are almost all university graduates. That is enough typically to neutralize public anger. But some things have changed. Politicians saw in the last election that the people do not like to be ignored, and voters are restless. Also, budget reduction is a major activity at all governmental levels, and the governmental power of the purse over higher education is huge.

To be sure, I don’t think, for example, that we will clean up college sports overnight, or get the transparency and other things we need for better accountability real soon. But pressures are building that may become too large for the Dupont Circle crowd to overcome. But most important, more and more people are thinking college is a rip-off, a criticism seldom uttered in the past. Compounding the problem for colleges is a growing concern that a diploma is no longer a guaranteed ticket for entry into comfortable middle-class adulthood. We have some occupations where we have roughly as many workers with less than a high-school diploma doing the same thing as college graduates.

If news accounts are any indication of reality, even many of the more thoughtful leaders of the Higher Education Establishment are admitting the forces supporting big change are mounting. The exact contours of the changes are unknown, nor is the timing, but the “sword” of higher education lobbying may lose some of its clout fairly soon.

**This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 22, 2010.

25 Ways to Do More With Less

By Richard Vedder*

While the Educational Establishment sees the biggest higher education problem to be an inadequate number of students receiving college degrees, I think the two biggest problems are, first, the lack of information about the quality of academic teaching and research and the accompanying worry that quality is mediocre and perhaps declining. Just as important, however, college is becoming ghastly expensive and productivity change in American universities has been somewhere between zero and negative.

But it is easy to criticize the status quo. What can be done to change it? My little think tank has sponsored two new works that offer lots of practical answers to the second of our big problems—namely excessive college costs.

In Doing More with Less: Making Colleges Work Better (edited by Joshua Hall and published by Springer), some 16 scholars offer suggestions on market-based approaches to reducing costs, ranging all the way from reforming intercollegiate athletics to more intelligent uses of master teachers.

An even more specific and cheaper, easy-to-access “electronic book” has been compiled by CCAP, entitled 25 Ways to Reduce the Cost of College. The ideas in the study are being released one section at a time over the next several weeks. Very few are terribly new or novel, but cumulatively, an adherence to the ideas could lead to powerful reductions in the per student cost of offering a college degree. We have already released chapters 1-5 of this report, and chapters 6-12 are coming out this Wednesday.
The ideas are:

1. Increase the proportion of students attending low cost schools, such as community colleges;
2. Promote dual enrollment programs (e.g., AP, the College Level Examination Program of the College Board, etc.);
3. Revisit tenure and reform academic employment practices;
4. Offer three-year Bachelor’s Degrees;
5. Outsource far more services (e.g., remedial education, maintenance, maybe even building ownership);
6. Reduce administrative staff—drastically;
7. Eliminate unnecessary, low enrollment or qualitatively suspect programs;
8. End the “athletics arms race,”
9. Complete the overhual of the FAFSA form;
10. Eliminate excessive academic research (e.g., publishing for the Journal of Last Resort or its equivalent);
11. Streamline redundant programs at the state level;
12. Promote more collaborative purchasing;
13. Improve facility utilization (use market approaches to allocate and more fully use space);
14. Increase teaching loads (the corollary to #10 above);
15. Incentivize the timely completion of degrees;
16. Move more classes online;
17. Reduce textbook costs using new technologies and approaches;
18. Digitize academic libraries, and reduce book acquisitions;
19. Outsource e-mail;
20. Utilize interactive course management tools using new technologies;
21. Ease credit transfer problems between public institutions;
22. Reform student aid programs at the federal and state levels;
23. Reform accreditation and reduce barriers to entry;
24. Subsidize students, not institutions and move to student-centered funding to a greater extent, and
25. Promote competition based on value, not reputation.

Many ideas above have been implemented at some schools, and others are controversial and require some thinking as to implementation. Some offer possibilities for long, not short run, cost reduction. All require more elaboration than the listing I gave above. Those interested can get more details at http://centerforcollegeaffordability.org.

The big problem, of course, is that there are forces at work at colleges that make implementation difficult for even these extensive but not radical structural reforms. But these ideas are mostly good ones, and it is worth some effort to fight reactionary forces opposed to real reform in higher education.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 15, 2010.

Lessons for Higher Education From the American People

By Richard Vedder*

The 2010 elections sent a very clear message: On average, Americans think government is too big, spends to much, and intrudes too much in our lives. The Republican gains in the House (at least 60) were the largest in 74 years, and third-largest in the history of that political party, only behind the 1894 and 1938 experiences. While they lost the California governorship, they gained control of that office on net in more than a half dozen states (giving them at least 30 governorships), including several populous ones, such as Pennsylvania, Ohio, and Michigan. Several powerful Democratic committee chairs in the U.S. House of Representatives lost not only their chairmanships but also their seats, such as James Oberstar, John Spratt, and Ike Skelton.

Does this make any difference for higher education? In the past, the impact of such changes was often more rhetorical than real. Higher education was a secondary budgetary item and there was something resembling bipartisan support for most programs. I think that support has frayed considerably, partially because of budget pressures, but partly because of the arrogance of university leaders regarding the political process. Nonetheless, because of likely gridlock in Washington reflecting the division of power between the two parties, revolutionary changes are unlikely to occur at that level –the rhetoric will change more than the reality once again. Yet budget realities are so grim (independent of the election) that federal higher education subsidies are in peril. A similar situation exists in many states. I would observe the following:

1. While the Senate has those wanting to scrutinize and attack for-profit higher education more (e..g, Senators Harkin and Durbin), the GOP controlled House will push for greater accountability from all institutions, opposing the singling out of for-profit institutions. Presumptive speaker John Boehner likes the for-profits, for example, if his earlier experience as chair of the House Education committee is any guide.

2. Because of budget pressures, the expansion of Pell Grants and direct student loans may be stopped or even reversed. In particular, I think the GOP might start putting some accountability into the Pell Grant program, a program which, though apparently good at achieving its general goal, is excessively expensive. I am reasonably confident, for example, that more than 85 percent of Pell Grant recipients at the University of Texas at El Paso will never (at least not within six years) get bachelor’s degrees. Why should that institution (and many others like it) be allowed to continue in the Pell Grant program if the apparent success rate is so low? Isn’t that suggestion analogous to the Obama Administration’s proposal that for-profit schools whose students earnings from gainful employment are unacceptably low should lose the right to federal assistance?

3. The solid victory for legislation banning affirmative action in Arizona (joining similar laws in California, Michigan, Nebraska, and Washington) should further demonstrate the disconnect between the frequent call by university leaders for preferential treatment for people on the basic of group characteristics such as skin color or ethnicity, and the general view of the American people favoring an emphasis on meritocracy independent of racial, gender, or other status.

4. More generally, the political lesson this year is that “ignoring the people” has political consequences. Universities have been taking positions sharply out of tune with public opinion for decades. They ignore growing cries about rising tuition charges, for example. Could this contempt for public opinion lead to the further defunding of the universities?

5. I expect the defunding of higher education to accelerate a bit. Take my state of Ohio. The voters threw out a loyal Obama supporting liberal Democrat governor (Ted Strickland) for a rather conservative Republican (John Kasich) who has vowed to not raise taxes, at precisely the time the state faces the need for huge budget cuts, and at a time that Gov. Chris Christie of New Jersey has proven that tough budget cutting can actually be highly politically popular. Therefore, in Ohio, I expect universities are in for a painful retrenchment of public financial support. My guess is the situation in Michigan is very similar, as it is in probably quite a few other states.

Higher education is very good at pleading, but not so good at listening, especially to those outside the Ivory Tower. Yet it is ordinary folks who provide the third-party payments that have allowed higher education to grow so much—too much in my judgment. Direct subsidies to institutions and individuals by the government are supplemented by tax-sheltered giving from private donors. The general attitude in the Academy when the nation moves to the right is: “Be patient, this too will pass.” But the fiscal imperatives of dealing with trillion-dollar federal budget deficits, and similar fiscal stress in many states may lead desperate political leaders to consider more radical changes in policies regarding those institutions so dependent on public support.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 3, 2010.

The 2010 Election Results and Higher Education

By Richard Vedder*

Do the 2010 congressional elections really matter? I suspect the answer is yes, and I am probably a fool for speculating about them right before they take place, but tenured professors usually don’t care much about whether they are foolish or not, as it has little impact on their material lives.

Like everyone else, I think the Republicans are going to make big gains, likely taking over the House. I sense that Democratic last-minute actions to avert disaster have had a small amount of success, but not enough to prevent a bloodbath. Dozens of sitting Democrats in the House who want to continue will lose their jobs, perhaps exceeding the postwar high for that statistic. Nancy Pelosi is in her last weeks as Speaker.

John Boehner was the former chair of the House Education and Work Force Committee, and has a far more sympathetic view towards things like private provision of student loans and for-profit education. In the Senate, I think the GOP gains will solidify their ability to block Democratic initiatives, but not big enough to successfully put forward an alternative agenda. Remember, Barack Obama is still president, and I doubt he is temperamentally capable of bending and compromising in a pragmatic way with the GOP, so he would veto moderate, middle-of-the-road proposals that are inconsistent with his socialist and collectivist way of thinking.

What that might mean is gridlock. Now, gridlock is not all bad. In the mid-1990s, there was a period of divided power (Clinton in the White House, GOP controlling the House of Representatives) and our nation, more or less, flourished. Sometimes gridlock forces compromises that the increasingly partisan and ideologically oriented Congress could not otherwise deliver.

Yet some of the Obama plans need to be modified. The attack on the for-profit universities while ignoring poor performance of traditional institutions is both unfair and bad policy. Either hold everyone accountable by the same standards or turn quality control over to the states, where it originally resided and, arguably, where it belongs. The continued increase in federal financial aid without systematic reform of the system is fiscally irresponsible and contributes to the rising problem of the low-wage college dropout or even college graduate. Why shouldn’t Pell Grants, for example, be tied at least somewhat to expectations of success? Why shouldn’t academic excellence be rewarded and mediocrity punished, at least modestly?

I hope the House Republicans, if they assume control, push on these issues, even if they face a dubious future in the Senate and a potential Obama veto. Basically, the notion of federal college grants as an entitlement no matter how bleak the prospects of academic success are is extremely expensive, often debilitating, to the students involved, and arguably morally suspect.

The idea of requiring schools that want to operate throughout the U.S. online offerings to get licensing in every single state is anti-competitive, anti-consumer, anti-small business, anti-capitalist, and otherwise just dumb. It has been 186 years since the U.S. Supreme Court in Gibbons v. Ogden decided that New York State could not use its licensing powers to keep steamboat companies from operating in multiple jurisdictions. Individual state licensing of essentially interstate activities was condemned. It was a good decision during the Administration of James Monroe, and it is a good principle in the Administration of Barack Obama.

There are many other reforms of higher education that need to be addressed, but I doubt very much that Washington will be the impetus of these changes, at least for now.

In short, this election will make a difference, arguably not a transcendental difference owing to the likelihood of divided government, but a difference nonetheless.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 1, 2010.

The Perfect Storm: a Coming Revolution?

By Richard Vedder

A couple of weeks ago, I spoke at the Alexander Hamilton Institute (AHI) in Clinton, New York, near the campus of Hamilton College. AHI should be part of Hamilton, but the leftist orientation of faculty and administration makes that impossible, since AHI is a group of right-of-center scholars who bring in speakers with a different perspective than the typical campus visitor. Hamilton, like many schools, seems to think diversity is beautiful when it comes to skin color but deplorable when it comes to ideas, but that is a topic I should leave to new “Innovations” blogger (and friend) Peter Wood, who I welcome to our little group. He is already stirring up a bit of a fuss, starting to rival me in the number of agitated readers. Good.

What did I say at Hamilton? Basically, a “perfect storm” is enveloping higher education, which will lead to revolutionary changes. Consider the following:

1. The cost of higher education to students is rising faster than family incomes, not a sustainable condition indefinitely. Tuition fees can rise faster than overall prices forever (like London theater tickets), but they cannot rise faster than people’s incomes for eternity.

2. The pool of 18 to 24 year old students that forms the core constituency of colleges and universities will stagnate in size over the next decade.

3. Despite rampant grade inflation, well over 40 percent of entering full-time students fail to earn a diploma within six years, with the record for community colleges even worse. This may be related to evidence showing remarkably low levels of student academic effort as measured by their use of time.

4. Growing numbers of college students are ending up in relatively low paid jobs traditionally held by persons with modest levels of educational attainment, or, worse, are becoming unemployed.

5. The college-high school earnings differential has not materially grown for the largest population cohort –women–over the past couple of decades -despite sharply rising costs of attendance.

6. The number of college graduates or dropouts with dangerously high ratios of student debt to current income is growing substantially, a repeat on a smaller scale of the situation leading up to the housing bubble.

7. In spite of all of the above, the President, other key politicians, foundation executives and higher education officials are exhorting us to expand student college participation in order to raise the ratio of college graduates to the adult population.

8. Historically unprecedented federal budget deficits, a rising debt to GDP ratio, and a large growth in the elderly population (and the financial liabilities associated with their entitlements) are putting pressure on government to reduce spending in all but the absolutely vital areas.

In the market economy, when something becomes more expensive and its benefits become less clear-cut, people quite rationally and efficiently reduce their demand for it and thus resources are allocated away from the activity. In the politicized world of higher education, people like our President are trying to do the opposite –increase resource usage at a time when trends suggest we need to do otherwise. And universities, who could counteract the “perfect storm” by reforms that reduce costs and increase efficiency, have little incentive to do so, thwarting an efficient solution to the problem.

How will this all end up? I am not sure, but I predict American higher education in another generation will look rather different than it does today, and the institutional inefficiencies will probably have to be broken down, and the utopian aspirations of politicians and the Education Establishment will have to be modified. Time will tell if I am right.

Why Did 17 Million Students Go to College?

By Richard Vedder

Two sets of information were presented to me in the last 24 hours that have dramatically reinforced my feeling that diminishing returns have set in to investments in higher education, with increasing evidence suggesting that we are in one respect “overinvesting” in the field. First, following up on information provided by former student Douglas Himes at the Bureau of Labor Statistics (BLS), my sidekick Chris Matgouranis showed me the table reproduced below (And for more see this).

Over 317,000 waiters and waitresses have college degrees (over 8,000 of them have doctoral or professional degrees), along with over 80,000 bartenders, and over 18,000 parking lot attendants. All told, some 17,000,000 Americans with college degrees are doing jobs that the BLS says require less than the skill levels associated with a bachelor’s degree.

Occupation	Number with at least a Bachelor’s	Percentage
Customer service representatives	482,784	21.62
Waiters and waitresses	317,759	13.40
Secretaries, except legal, medical, and executive	311,440	16.64
Executive secretaries and administrative assistants	243,131	16.64
Receptionists and information clerks	141,476	12.89
Laborers and freight, stock, and material movers, hand	118,441	5.07
Janitors and cleaners, except maids and housekeeping cleaners	107,457	5.01
Truck drivers, heavy and tractor-trailer	85,205	5.09
Bartenders	80,542	16.00
Carpenters	65,412	7.27
Food preparation workers	63,737	7.24
Amusement and recreation attendants	63,704	24.61
Landscaping and groundskeeping workers	62,414	6.77
Construction laborers	59,409	5.82
Telemarketers	54,713	15.85
Postal service mail carriers	49,452	13.95
Electrician	49,109	7.76
Hotel, motel, and resort desk clerks	37,156	16.14
Flight attendants	29,645	29.80
Parking lot attendants	18,749	13.74

I have long been a proponent of Charles Murray’s thesis that an increasing number of people attending college do not have the cognitive abilities or other attributes usually necessary for success at higher levels of learning. As more and more try to attend colleges, either college degrees will be watered down (something already happening I suspect) or drop-out rates will rise.

The relentless claims of the Obama administration and others that having more college graduates is necessary for continued economic leadership is incompatible with this view. Putting issues of student abilities aside, the growing disconnect between labor market realities and the propaganda of higher-education apologists is causing more and more people to graduate and take menial jobs or no job at all. This is even true at the doctoral and professional level—there are 5,057 janitors in the U.S. with Ph.D.’s, other doctorates, or professional degrees.

This week an extraordinarily interesting new study was posted on the Web site of America’s most prestigious economic-research organization, the National Bureau of Economic Research. Three highly regarded economists (one of whom has won the Nobel Prize in Economic Science) have produced “Estimating Marginal Returns in Education,” Working Paper 16474 of the NBER. After very sophisticated and elaborate analysis, the authors conclude “In general, marginal and average returns to college are not the same.” (p. 28)
In other words, even if on average, an investment in higher education yields a good, say 10 percent, rate of return, it does not follow that adding to existing investments will yield that return, partly for reasons outlined above. The authors (Pedro Carneiro, James Heckman, and Edward Vytlacil) make that point explicitly, stating “Some marginal expansions of schooling produce gains that are well below average returns, in general agreement with the analysis of Charles Murray.” (p.29)

Now it is true that college has a consumption as well as investment function. People often enjoy going to classes, just as they enjoy watching movies or taking trips. They love the socialization dimensions of schooling—particularly in this age of the country-clubization of American universities. They may improve their self-esteem by earning a college degree. Yet, at a time when resources are scarce, when American governments are running $1.3-trillion deficits, when we face huge unfunded liabilities associated with commitments made to our growing elderly population, should we be subsidizing increasingly problematic educational programs for students whose prior academic record would suggest little likelihood of academic, much less vocational, success?

I think the American people understand, albeit dimly, the logic above. Increasingly, state governments are cutting back  higher-education funding, thinking it is an activity that largely confers private benefits. The pleas of university leaders and governmental officials for more and more college attendance appear to be increasingly costly and unproductive forms of special pleading by a sector that abhors transparency and performance measures.

Higher education is on the brink of big change, like it or not.

Christopher Matgouranis helped enormously in preparing this posting.

Why Do We Have HBCU’s?

by Richard Vedder

Jason Riley is a great writer, and both he and his wife Naomi (who is writing a book on tenure) have interesting and often provocative things to say, such as in Jason’s great recent book on American immigration. Now Jason has stirred things up a bit with his Wall Street Journal piece that argues that historically black colleges and universities (hereafter, HBCU’s) are serving black students very poorly, and have become something of an expensive, ineffective anachronism. This has stirred up some anger, and Michael Sorrell, writing with Marybeth Gasman, has used this blog series to argue that Riley is misinformed, inaccurate, etc., etc. Sorrell, by the way, is president of an extremely small black college in Dallas that once achieved something very difficult to accomplish in higher education: it managed to almost lose its accreditation.

Ms. Gasman and Mr. Sorrell say the evidence shows Jason Riley is wrong. I disagree, but even before we get to the evidence, I find the idea of race-based institutions of higher education very disturbing in this day and age. It is interesting that most schools use the cry for “diversity” to justify their racially preferential policies that are designed to reduce racial homogeneity in the student body, arguing there are social if not educational benefits to having more racially mixed student bodies. Yet at the same time we are subsidizing and promoting institutions that celebrate homogeneity–arguing that black self-esteem is enhanced when students are educated in largely segregated schools with other blacks (think of the hue and cry if someone tried to establish an institution designed explicitly to serve white persons or even Asians.) In a nation where there is a black president elected largely with white votes, where blacks are found with increasing frequency as Secretary of State, in Congress, as leading entertainers and sports figures, and as CEO’s of prestigious companies like American Express, do we really need to have HBCU’s? Indeed, isn’t this short of a embarrassment to our nation that prides itself on equality of opportunity and where success historically has been largely based on meritorious achievement and, as Martin Luther King so memorably said, on “the content of your character”?

But enough opinion. How good are the HBCU’s? One way to evaluate this is to look at rankings. I suspect the Harvard, Yale and Princeton of the HBCU’s are Howard, Spelman, and Morehouse. In the US News & World Report rankings, the top-ranked liberal arts college, Spelman is ranked 59th, which is pretty good but hardly one of the best. Howard, the top HBCU research university, does not crack the top 100 in that list. Not one school is considered a very fine school of the highest distinction. In the Forbes rankings (full disclosure: I am in charge of compiling them), there are some 610 schools ranked, and not one the HBCU’s makes the top half of that list. The best of the HBCU’s are considered to be fairly decent but hardly superb institutions. Taken collectively, the 95 or so four year domestic HBCU’s have typical six year graduate rates around one-third, compared with well over 50 percent for the general population of schools. For every student entering one of these schools full time who successfully graduates (albeit in as much as six years), two others drop out. Lists of the lowest graduation rate schools in the country have disproportionately high representation from the HBCU’s.

Proponents of HBCU’s would say the low indicators of performance of those schools arises from the fact that students, on average, have lower incomes and poor academic backgrounds than non-HBCU schools–which is true. Some limited empirical analysis that we have done at the Center for College Affordability and Productivity suggests that this may explain much, but not all, of the relatively poor graduation rates. Even if it explains all of the differential rates, however, it only means that HBCU’s are no better nor worse than other schools, hardly a justification for continuation of race-centered institutions.

Another issue relates to the amount of subsidies. Howard gets about $235-million from the federal government annually, or roughly $22,225 per student. Most traditional state universities are lucky to get per student subsidies of half that amount, and one-quarter is closer to typical. Would the students be better off if we gave them $22,225 vouchers to attend traditional universities ranked higher than Howard in the rankings? I suspect so. It is time to rethink the public funding of this anachronism from the past.

I am not proposing simply abolishing these institutions. I simply would suggest that they should not receive special funding because of some race-based status, and that they should accordingly be encouraged to enroll more non-black students. Already some HBCU’s, notably two in West Virginia, are in fact no longer predominantly black. Just as all-male bastions like Harvard and Yale started accepting women quite successfully 40 years ago, so I suspect the HBCU’s would benefit from expanding their client base.

*This blog post was originally published as part of the "Innovations" blog series at The Chronicle of Higher Education

A Tale of 40 Professors at Texas A&M University

By Richard Vedder

Texas A&M University has done something very cool, albeit under some duress. They have released in a document longer than some novels a list of every single instructor in the vast A&M empire, including the smaller affiliated schools, along with information on their salaries, number of classes taught, number of students, weighted student credit hours taught, etc.

I went to my Chief Whiz Kid (student research assistant) Chris Matgouranis and told him to pick, more or less at random, 20 departments at the university's main campus at College Station. I told him to find one highly paid professor with very little teaching load in each department, but also the opposite, one instructor who is modestly paid but has many students. The findings were startling, even for a jaded veteran professor like myself who thought he was aware of the budgetary priorities of major universities.

The 20 high paid professors made on average over $200,000 each, and with fringe benefits it cost $5,004,400 annually to compensate them for their services. They taught collectively 125 students last year, or roughly $40,000 per student; since a typical student takes perhaps 10 courses a year, the average cost of educating a student exclusively with this group of professors would be about $400,000, exclusive of any other costs beyond faculty salaries.

To finance this extraordinary expenditure, let us look at the other 20 professors in our sample. They made almost precisely one-fourth as much on average, or just over $50,000 a year. With fringe benefits, it cost $1,250,697 to pay them. Yet these professors collectively taught 13,667 students (three taught over 1,000 students, and all the others at least 200), at an average instructor cost per student of under $100. It cost 400 times as much per student to educate the small number studying with the highly paid researchers as with the teachers with large classes. 80 percent of A&M's resources devoted to the 40 sampled professors went to the high paid researchers who taught less than one percent of the students.

My guess is the average tuition paid, net of institutional financial aid, was GREATER for those students in the mega-sized classes with the low paid instructors than that paid by the 125 students working with the high priced professors. The one group subsidized the other --massively. Almost certainly, freshman and sophomores at A&M were "cash cows" used to fund expensive graduate students and graduate programs. To be sure, many of the high priced professors no doubt received federal research grants, but in terms of costs to society, it makes relatively little different who pays the bills.

There are many retorts to all of this. It is probable a full investigation of all A&M instructors would suggest the differential costs between the teachers with heavy loads and the research oriented faculty would be less. And, of course, the high paid professors are relatively well known nationally and producing lots of research.

But is even that necessarily true? Is not the implied cost per article published, or per paper given at professional meetings, terribly high? Does it make any sense on cost-benefit grounds? Who knows? But I have my suspicions. For example, I examined the vita of the high paid professor chosen in the Department of Educational Psychology as posted on the department's web site. It shows in the five year period from 2006 through 2010, he published four articles in journals or books accumulating to just over 60 pages, had three papers "in press" and serves on the editorial boards of a couple of academic journals and is an associate editor of a third. The cost per student for him was $97,272 (he had two students last year). His lower cost counterpart in his department, almost certainly an adjunct or graduate student, cost $72 per student. Is it worth the nearly $200,000 extra per year spent on the high price professor in order to get roughly one academic paper a year? Some of the high price faculty were far more prolific (e.g., Michael Hitt, a management professor who apparently from what I can ascertain is near the pinnacle of his profession), and some may also have significant administrative responsibilities. Nonetheless, the implied cost of these services is very, very high.

I am not trying to trash A&M. Indeed, it is commendable that they have shown a level of transparency that is far higher than typical for a major state university. I suspect the pattern observed here can be replicated many times over at other schools. But it is also clear that universities spend huge sums trying to get prestigious professors, and that a serious examination of the cost-benefit of this type of behavior needs to be done by impartial outside persons or research centers.