Monday, June 14, 2010

I would love to know where the rest of the money goes

Bob Samuels has an interesting article called The Solution They Won't Try. His main point is that public universities can pick up a lot of extra money by accepting more students. The point I found most fascinating was in these two paragraphs:

To calculate how much public research universities spend on educating each undergraduate student, we can look at national statistics regarding faculty salaries and how much it costs a university to staff undergraduate courses. According to a recent study by the American Federation of Teachers, "Reversing Course," the average salary cost per class for a tenured professor at a public research university is $20,000 (4 classes at $80,000), and it costs $9,000 for a full-time non-tenure-track teacher and $4,500 for a part-time instructor to teach the same course. Using these averages, we can determine the annual instructional cost for each student by considering the number of classes each student takes in a year and how much each individual course costs. Since we know that only a third of undergraduate courses are now taught by professors, and the other courses are taught by non-tenured faculty, we can calculate the per student cost, but we first have to determine the average class size to do this calculation, and this is the analysis that I believe no one has ever done.
Looking at transcripts from several public research universities, I have determined that the average annual course load for a student is six large classes (averaging 200 students) and two small courses (averaging 20 students). Next, by using the national faculty average salary per class, and determining who actually teaches the courses (1/3 professors, 1/3 full-time non-tenure-track faculty, and 1/3 part-time faculty), we find that the total average annual instructional cost per student is $1,456 (each large class costs $56 per student and each small class costs $560). In other words, public universities charge on average
$7,000 per student and they get another $8,000 per student from the state, but in reality, it only cost about a tenth of this amount to teach each student.

For me the key point is public universities have to pay out about $1,456 a year to teacher's salaries for each student, but the universities collect about $15,000 each year.

Where does the rest of the money go? I'm sure there are some reasonable administration costs. I know it costs some money to maintain the buildings and the grounds. But that shouldn't account for more than a couple thousand dollars a year per student.

Where does the remaining $10,000 a year per student go? Has anyone seen a good pie chart on the break down for where the money goes?

Keep in mind that this is happening while the cost of a college education is climbing three times faster than inflation.

(Hat tip: Instapundit)

Technorati tags: children, education, government schools, children, public school, public education


Sebastian said...

Well, there are all the administrative positions, stocking and running the library (subscriptions to academic journals are unbelievably expensive), the health clinic, etc. It probably costs far more in equipment to teach a science or engineering course than an English or history course.
Also students who pay full tuition are also paying freight for students who get scholarships and other tuition assists from the school.
And yes, I'd love to see more explanation why universities, especially public schools, are raising tuition at such a rate.

Luke said...

[sigh] More money disappearing into a void...


Henry Cate said...

Sebastian - thanks for the list.

Today's Wizard of Id hits too close to come.

Eric Holcombe said...

It depends on the engineering courses. Many of mine were not laboratory type courses, so no real difference in capital expense. The ones that had labs often charged for the credit hours, so more money was collected for the lab. These labs often were taught by grad students or TA's as well, so the instructor cost was lower.

Some other factors are debt service, health insurance benefits (I find these to be obscene for state employees - not many private companies can afford them), state retirement pensions (which got slammed along with everything else invested in the stock market - I'll bet your state doesn't want to talk about that).