Sunday, June 22, 2014

Government Regulations Killing Education? Part 3

By Professor Doom

I’ve spent the last two posts analyzing a $650,000 a year administrator’s thesis that the reason for the skyrocketing tuition of higher education is all the government regulation and such.

Now, there are many very strong arguments to be made for that thesis, but, alas, the $650,000 a year administrator failed to make them, instead demonstrating the level of hypocrisy and cluelessness that is actually typical of administration in higher education. It’s a huge puzzle why we need so many of these guys, and why they get so much money.

But wait, there’s more.

 The readers in the comments section do a fine job of pointing out weaknesses in the essay. Even more amazing, there’s a look at the school’s publicly available tax forms, which sure do tell a different tale (a huge shout-out to the amazing Unemployed_Northeastern, it’s a shame I can’t contact this commenter directly to thank him).

Most students at the Poo-Bah’s institution are only there because their tuition is paid via federal student loans and Pell Grant money. In short, about half of the institution’s revenue (roughly $70,000,000) is coming from the federal government. As a non-profit, the school gets a variety of massive federal and local tax breaks on top of that. 

I’d be hard pressed to complain about a client giving me $70,000,000 a year and huge tax breaks wanting to know the money is being used properly, but the Poo-Bah is shameless. If a crocodile were so large that it were constructed of smaller, 20’ long crocodiles, that’s the size of beast that could cry tears like this administrator.
Let’s go over that again: $70,000,000 a year goes to this school from the federal government…and this is a small university by today’s standards, in a town most folks have never heard of. I encourage the reader to pause a moment to consider the sheer scale of the federal student loan scam, that even small schools can rake in this kind of loot.

This school, this oasis of shamelessness harboring this tearful crocodile, only exists because of the torrent of lucre directly and indirectly poured on it by the federal government. And the Poo-Bah is complaining that the federal government should DARE to ask what’s being done with all the money it’s handing over to the Poo-Bah’s institution?

Hey, if the $650,00 a year Poo-Bah is sincere about all those evil federal regulations, he could, you know, stop taking all that federal money. Stop taking the money, and then you don’t have to deal with the strings attached to the money. If it’s as bad a deal as he says, he’d do that in a heartbeat, right?

Crocodile tears, indeed. I’d be happy to do his job for $65,000  year (and thus make 600% of the pay of a typical teacher in higher education)…I wonder if the governing board would consider it.

Back to those tax forms. In spite of all the regulations the Poo-Bah is crying about, his institution took in $20,000,000 more dollars than it spent last year (and their endowment is growing nicely as well). It seems like the school is doing ok on their nearly $60,000,000 dollars of tax-free land (a big deal in Florida, which collects most of its money via real estate taxes) despite all those onerous regulations. Many a legitimate business would be thrilled to make such profits with so little revenue or even capital investment. 

But wait, this is a non-profit institution. They’re under no obligation to take in more money than they spend on ridiculous administrative salaries, so there’s no need to run a $20,000,000 profit.

If the school gave a refund check of $2,000 to each student (incidentally, this is about triple the cost of tuition when I went to university, a generation ago), that would eliminate their $20,000,000 profit last year. I guess that option is not on the table? So much for his claim that his institution is working hard to keep tuition costs down, as that refund would do much to offset the 5% per year tuition increases at the school. I reiterate that these are increases that, obviously, are not necessary in light of that kind of profit.

Seriously, something is very wrong in higher education, and I’m not sure this $650,000 a year administrator has really advanced the case that it’s the federal regulations that are primarily the problem. It’s amazing, when you consider that the government consumes about 50% of our GNP, that this $650,000 a year administrator can’t seem to put together a semi-credible essay showing there’s too much government. Shocking.

Perhaps the reader can guess what the $650,000 a year administrator should be saying is the problem in higher education?

Think about it. I’ve haven’t quite dropped 650,000 hints here, but I reckon the gentle reader can guess what I think the problem is.

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