Press Releases

In Case You Missed It, the Wall Street Journal highlighted the meteoric rise of college tuition cost at several public universities and described the root causes, including wasteful investments, excessive administrators, and little accountability. 



Colleges Spend Like There’s No Tomorrow. ‘These Places Are Just Devouring Money.’
By Melissa Korn, Andrea Fuller, and Jennifer S. Forsyth
August 10, 2023

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.

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.
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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.

Many university officials struggled to understand their own budgets and simply increased spending every year. Trustees demanded little accountability and often rubber-stamped what came before them. And schools inconsistently disclose what they spend, making it nearly impossible for the public to review how their tuition and tax dollars are being used.
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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.

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. 
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Schools use their own discretion to categorize spending on audited financial statements, making precise comparisons at a single school over time, or among different schools, extremely difficult. Colleges, for example, sometimes classify professors’ salaries as instructional spending one year and as research expenses the next.

Total operating expenses rose nearly 10% from 2012 to 2022 at the median university.

The schools have passed the tab on to students even in the nation’s poorest states. 
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Schools loaded their campuses with state-of-the-art recreation centers and dorms to appeal to students with top test scores and minimal need for financial aid. The price for these amenities was then baked into the bills for all students, including with fees students paid to cover construction debt.

Tuition and fee revenue per student climbed by double digits in the past 20 years at every school in the Journal’s analysis.
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Penn State’s University Park campus was the country’s most expensive state flagship in the 2021-22 school year for in-state freshmen after scholarships. Those students paid an average $26,747 in tuition, fees, room and board, according to the Education Department data.

Penn State determined last year it was on track to blow through its $350 million reserve funds in the next few years if it didn’t change course. 

Read the full article here.