People throw around offensive-sounding numbers of millions of dollars for college amenities, but often they work out to pocket change per student (quite a few people will circulate through a large state university over the lifetime of a building) or are paid for by private donors.
The Bowen hypothesis makes people feel better about themselves - it says the root of all our problems is that kids today are spoiled. However, one must consider that state subsidization of public higher education has been slashed in half since 1975; students and their families pay a higher proportion of the cost than they once did.
People throw around offensive-sounding numbers of millions of dollars for college amenities, but often they work out to pocket change per student
This is not true, generally. The cost of running a modern university (property, plant, energy) is quite material. These costs are an order of magnitude above "pocket change".
Physical plant costs are material, yes. However, the issue is specifically the incremental physical plant costs of having nice things like brand new athletic centers.
My university has a new $51m gym. $51,000,000 / 12,000 students / 30 years = $142/student/year. Roughly the price of a single science textbook, and that's assuming it only lasts 30 years.
Not pocket change on a student's personal expenses budget, but compared to the $65k sticker cost of attendance, it's a drop in the ocean. If administration had refrained from spoiling its students with nice things, cost of attendance would not be markedly less.
=~$1.5 B on opex. Which is basically garnderers, housekeepers, lawn-mowers, and janitors. That, plus security, heat electric, etc. golf courses, gyms, etc.
Pocket change in this context would be 1-3% of a cost base.[1] >5% is not pocket change, it is a material expense. The expenses in question may be in the 30-40% range ( >10x a "pocket change" amount of 1-2%). Hope this is clearer.
Obviously this isn't granular enough to draw any conclusions from, but my alma mater (University of Virginia) has an annual opex of about $2b. This covers about 12,000 undergrads and 8,000 grad/professional students.
The reason why prices are high won't matter once the customer stops purchasing. I think there are enough metrics to suggest a peak in US higher education growth, probably around 2010. ( www.nytimes.com/2013/12/26/education/getting-out-of-discount-game-small-colleges-lower-the-price.html & http://www.bloomberg.com/news/2013-09-30/student-loan-defaul... for a few recent examples.)
The debate needs to encompass the entirety of the US higher education system rather than making generalizations based on specific pieces of it. State universities, private schools, not for profits, for profits, schools with massive endowments, and so on, each have their own piece of the story.
Secondly, given that the issue in question involve debt, some portion of the analysis here is future prediction -- both for the students borrowing and for schools which are borrowers. Borrowing a ton of money today seems rational if the future brings great inflation, and lunacy if deflation or stagnation.
The Bowen hypothesis makes people feel better about themselves - it says the root of all our problems is that kids today are spoiled. However, one must consider that state subsidization of public higher education has been slashed in half since 1975; students and their families pay a higher proportion of the cost than they once did.
http://www.nasfaa.org/advocacy/perspectives/articles/Myths_a...