Top 10 Reasons Oklahoma Regents Should Cut, Not Raise, Tuition
July 1, 2011
Last month Oklahoma’s higher education regents approved tuition and fee increases for the state’s public colleges and universities. No surprise there; as former Harvard president Derek Bok famously remarked, “universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires.” But before the regents consider their next round of tuition and fee hikes, one hopes they will consider the following.
10. Many Oklahomans are struggling financially. A full 73 percent of Oklahoma taxpayers have annual household incomes under $50,000, according to an analyst at the Oklahoma Policy Institute, a liberal think tank.1 Oklahomans’ family budgets are “already tight,” the institute noted last week, as 2011 is proving to be “a time of rising costs for fuel, health insurance, and other household necessities.”2
9. Universities do not have a revenue problem. In fact, some are extremely wealthy and highly profitable. As Vance H. Fried, Riata Professor of Entrepreneurship at Oklahoma State University, pointed out in a report last month, “Undergraduate education is a highly profitable business for nonprofit colleges and universities. They do not show profits on their books, but instead take their profits in the form of spending on some combination of research, graduate education, low-demand majors, low faculty teaching loads, excess compensation, and featherbedding. The industry’s high profits come at the expense of students and taxpayers.”3
Moreover, the University of Oklahoma (for example) is sitting on an endowment of nearly a billion dollars.4 Oklahoma State University’s endowment is nearly half a billion dollars.5 But “why should a school create a fund that it never intends to spend?” Dr. Fried asks. After all, “schools aren’t trust companies; they are educational institutions. ... These colleges are like poor little rich kids fixated upon their wealth. Although rich, they constantly complain about not having enough money to cover their needs. Although rich, they constantly try to get more money out of their students and society at large. They continue to build their endowments even though each dollar added to endowment represents a dollar that could have gone to providing an education to current students, researching today’s great problems, or to reducing tuition.”6
8. Colleges and universities are continuing to add employees. The total number of full-time-equivalent employees (FTE) at Oklahoma colleges and universities increased by 3,052 in recent years—from 30,070 in FY-2006 to 33,122 in FY-2011.7 In other words, FTE totals in FY-2011—a “downturn-level” year—exceed by 10.15 percent the FTE levels of FY-2006. In FY-2011, colleges and universities are employing a near-record8 number of employees.
Moreover, a recent report from the American Council of Trustees and Alumni found that in the five-year period ending in 2008, the University of Oklahoma more than doubled its spending on administration.9 It’s small wonder that Oklahoma voters, by a margin of 81 percent to 6 percent, believe “public colleges and universities in Oklahoma can be run more efficiently.”10
7. Some of the compensation in higher education is excessive. In FY-2010, Oklahoma colleges and universities spent nearly $336 million to pay the salaries of approximately 2,086 faculty and staff members who earn more than $100,000 per year.11
6. Prioritization could reduce costs. Much of what passes for higher education brings to mind former Boston University president John Silber’s quip: “Higher than what?”
There are too many “soft courses,” economist Thomas Sowell recently noted, “that allow students to spend years in college without becoming educated in any real sense.”12 Oklahoma institutions of higher education offer courses such as “Badminton,” “Principles of Floral Arranging,” “Beginning Bowling,” “Puppetry I,” and “Billiards.”13 The University of Oklahoma offers courses such as “Star Wars and the Hero’s Journey,” “Six Years in the Life: The Beatles and the Counterculture,” “Disney Dogs and Popular Pets,” “Monsters, Mummies, Myths: A Study of Bad Archaeology and Pop Culture,” “The Evolution of a Media: Hip Hop Narrative,” “Environmentally Conscious Living,” “South Park and Stereotypes: TV Racism in the Obama Era,” “Jersey Shore-GRC: Depictions of Gender, Race and Class on The Shore,” “Sociology of Gender and Sexuality in Media,” and “Rough Girls and Sweet Boys: Gender, Personality and Communication.”14 A University of Oklahoma professor teaches a course called “Food, Culture, and Society,” and once published academic research entitled “Towards Queering Food Studies: Foodways, Heteronormativity, and Hungry Women in Chicana Lesbian Writing.”15
“We don’t need more government ‘investment’ to produce more of such ‘education,’” Sowell says. “Lofty words such as ‘investment’ should not blind us to the ugly reality of political pork-barrel spending.”16 Universities should get rid of some fluff and then cut tuition.
5. Colleges and universities have spent more than $188 million on travel over the last three fiscal years. During FY-2010, a “revenue shortfall” year for the state, colleges and universities only reduced travel expenditures by 10.4 percent from the prior year, reducing total travel costs from $64.9 million in FY-2009 to $58.2 million in FY-2010.17
4. Colleges and universities are making poor use of the money they currently receive. As the following chart demonstrates, these institutions are failing to engage and educate a staggering percentage of their students.18 There is no reason to believe that more money is going to help.
3. Colleges and universities are perpetuating a never-ending cycle of getting all the money they can, and spending all the money they get. As Dr. Fried observes: “Thirty years ago, Howard R. Bowen, an economist and president of three different colleges, proposed what is known in education circles as Bowen’s Law. It can be summarized as ‘colleges raise all the money they can, and spend all the money they can raise.’ Bowen’s Law is well-accepted by scholars of higher education economics.
“But don’t colleges try their best to keep costs low in order to keep tuition down? No! As Bowen points out: ‘The question of what ought higher education to cost—what is the minimal amount needed to provide services of acceptable quality—does not enter the process except as it is imposed from the outside. The higher educational system itself provides no guidance of a kind that weighs costs and benefits in terms of the public interest. The duty of setting limits thus falls, by default, upon those who provide the money, mostly legislators and students and their families.’”19
2. Many private colleges and universities are discounting tuition “at unprecedented levels” during the recession.20 Moreover, the University of the South, a prestigious liberal-arts institution in Sewanee, Tennessee, recently cut tuition by 10 percent,21 and the Ave Maria School of Law has decided to freeze tuition for at least 15 months.22 There is no reason public institutions cannot do likewise.
1. Professors are not teaching enough classes. Richard A. Burpee, a retired Air Force general who also served as a vice president at the University of Central Oklahoma for four years, recently suggested that “we need to take a hard look at how much teaching professors actually do.”23 After all, it is not fair to students (and their parents) to require ever-increasing tuition payments, only to have students be taught by teaching assistants. We should demand that more professors follow the example of University of Oklahoma historian J. Rufus Fears, who teaches large numbers of students. A recent SoonerPoll asked likely Oklahoma voters whether they agreed or disagreed with this statement: “Professors should be paid based on how much teaching they do, especially how many students they teach.” A full 63 percent agreed with the statement, while only 25 percent disagreed.24
Moreover, a new study by economist Richard Vedder suggests that tuition could be cut substantially if professors were required to teach more classes.25
1 David Blatt, “Bridging the Budget Gap: Revenue Options for a Balanced Approach,” Oklahoma Policy Institute Issue Brief 3, no. 1 (April 2010), http://www.okpolicy.org/files/bridgingthegap_brief.pdf.
2 David Blatt, “Child care cuts deal a blow to low-income working families and kids,” OKPolicy Blog, June 16, 2011, http://okpolicy.org/blog/children-and-families/child-care-cuts-deal-a-blow-to-low-income-working-families-and-kids. The author’s comments were in the context of policy changes at the Department of Human Services, but apply equally well to cash-strapped students and parents trying to pay tuition.
3 Vance Fried, “Federal Higher Education Policy and the Profitable Nonprofits,” Cato Institute Policy Analysis no. 678 (June 15, 2011), http://www.cato.org/pub_display.php?pub_id=13172.
4 National Association of College and University Business Officers, “U.S. and Canadian Institutions Listed by Fiscal Year 2010 Endowment Market Value and Percentage Change in Endowment Market Value from FY 2009 to FY 2010,“ in 2010 NACUBO-Commonfund Study of Endowments (2011), http://www.nacubo.org/Documents/research/2010NCSE_Public_Tables_Endowment_Market_Values_Final.pdf.
6 Vance Fried, “The Endowment Trap,” John William Pope Center for Higher Education Policy “Commentaries” (March 29, 2011), http://www.popecenter.org/commentaries/article.html?id=2499.
7 Oklahoma Office of State Finance, Appendix D-9 of FY-2011 Executive Budget (February 1, 2010), http://www.ok.gov/OSF/documents/bud11.pdf, and Oklahoma Office of State Finance, Appendix D-9 of FY-2012 Executive Budget (February 7, 2011), http://www.ok.gov/OSF/documents/bud12.pdf.
8 The FTE level in FY-2010 was higher. Moreover, higher education spent $109 million more on salaries in FY-2010, a “revenue shortfall year,” than was spent on salaries in FY-2008.
9 American Council of Trustees and Alumni, What’s Happening Off the Field? A Report on Higher Education in the Big 12 (November 2010), https://www.goacta.org/publications/downloads/Big12Report.pdf.
10 SoonerPoll, telephone interview of 508 likely voters in the state of Oklahoma, January 24 to February 3, 2011. The margin of error is plus or minus 4.35 percent.
12 Thomas Sowell, “The ‘Education’ Mantra,” reprinted by RealClearPolitics from Creators Syndicate “Opinion” section (May 10, 2011), http://www.realclearpolitics.com/articles/2011/05/10/the_education_mantra_109799.html.
13 Citizens against Public Waste and Oklahoma Council of Public Affairs, 2006 Oklahoma Piglet Book (October 2006), http://s3.amazonaws.com/assets.ocpa.com/assets/assets/42/original/PigletBook06.pdf.
14 The University of Oklahoma Outreach Intersession Course Offerings, “December 2010 Course Offerings,” http://www.intersession.ou.edu/december.html; “May 2011 Course Offerings,” http://www.intersession.ou.edu/may.html; http://www.intersession.ou.edu/may.html; and “August 2011 Course Offerings,” http://www.intersession.ou.edu/august.html.
15 Julia C. Ehrhardt, “Towards Queering Food Studies: Foodways, Heteronormativity, and Hungry Women in Chicana Lesbian Writing,” Food and Foodways: Explorations in the History and Culture of Human Nourishment 14, no. 2 (June 2006): 91–109.
16 Sowell, “The ‘Education’ Mantra.”
18 Matthew Denhart and Christopher Matgouranis, Oklahoma Higher Education: Challenging the Conventional Wisdom (Center for College Affordability and Productivity and Oklahoma Council of Public Affairs, June 2011), http://s3.amazonaws.com/assets.ocpa.com/articles/pdfs/1222/original/OCPA_CCAP_Okla_Study_FINAL.pdf?1307715016.
19 Fried, “Federal Higher Education Policy.”
20Kevin Kiley, “Discounting the Bottom Line,” Inside Higher Ed “News” (May 23, 2011), http://www.insidehighered.com/news/2011/05/23/nacubo_survey_finds_increased_tuition_discounting_led_to_financial_problems_during_the_recession.
21 Edwin Williamson, “A revolutionary idea: Cutting tuition,” The Washington Examiner, May 29, 2011, http://bit.ly/kxsbeW.
22 “Tuition Freeze at Ave Maria School of Law,” http://bit.ly/mEK82U.
23 Wesley Burt, “Oklahoma Voters in Favor of Making Changes to Higher Education Administration,” SoonerPoll.com “Statewide” (March 7, 2011), http://soonerpoll.com/oklahoma-voters-in-favor-of-making-changes-to-higher-education-administration/.
25 Richard Vedder, “Time to Make Professors Teach,” Wall Street Journal, June 8, 2011, http://online.wsj.com/article/SB10001424052702304432304576369840105112326.html.