Up the Lazy River without a paddle: Universities use student fees to fund campus renovations and construction

In spite of financial woes so severe that LSU president F. King Alexander ruminated publicly about institutional bankruptcy, Louisiana State University is moving forward with an $85 million "leisure project" that will include a man-made "Lazy River" that spells out "LSU."

Shouldn't this project be put on hold until LSU's financial problems are solved? Not at all. LSU administrators insist that The Lazy River has nothing to do with LSU's budget worries.  This entirely gratuitous facility will be funded by a special fee assessment, which was earmarked for the Lazy River and the Lazy River alone.

But why? Laurie Braden, LSU's Director of Recreation said simply this: "I will put it up against any other collegiate recreational facility in the country when we are done because we will be the benchmark for the next level.”

Of course, LSU is not the only institution that is using student fees to fund campus construction and renovation projects. The New York Times reported recently that some universities are tacking mandatory meal plans on students' tuition bills, even if they don't eat on campus.  As reported in the Times, the University of Tennessee slapped a $300-per-semester meal plan on all undergraduates who do not purchase other meal plans, including commuters. The revenue generated will help pay for a new student union.

According to the Times, universities are outsourcing food services to private contractors and boasting about the cost savings. But as the Times noted, the cost of these contractual arrangements generally gets passed on to students.

Moreover, Times reporter Stephanie Saul wrote, "the particulars of the contracts reveal that much of the meal plan cost does not go for food at all. Colleges use the money to shore up their balance sheets, build workout facilities, create academic programs and projects, fund special "training tables" to feed athletes, and even pay for meals for prospective students touring campus."

All across America, anguished families are struggling with the high cost of attending college. "Why does it cost so much?" they ask.  "Reduced state funding,"glassy-eyed college administrators always mutter: that's the sole source of the problem.

But that's not true. Excessive student fees, outsourcing student services, cozy contractual relations with banks that manage students' money--all these things add up.

Why do college leaders outsource so many services and tack on so many fees?

Because they're lazy.  It is easier for university administrators to raise tuition every year and to tack on additional fees and charges than to make tough decisions about managing their institutions more efficiently.

So Lazy River is an apt metaphor for the state of higher education today. Every year, millions of students borrow more and more money in order to drift up a lazy river of increasingly expensive higher education, inching their way toward financial disaster.

The situation wouldn't be so bad if deserving students could discharge their overwhelming student-loan debt in bankruptcy. But most of them can't. They've truly gone up that Lazy River without a paddle.

LSU's proposed water recreation facility:
Up the Lazy River without a paddle

References

Stephanie Saul. Student Meal Plans Also Fund Renovations at Some Colleges.  New York Times, December 6, 2015, p. 1. Accessible at: http://www.houstonchronicle.com/news/nation-world/nation/article/Student-meal-plans-also-fund-renovations-at-some-6678716.php

Aalia Shaheed. LSU's *85M 'lazy river' leisure project rolls on, despite school's budget woes. Fox News, May 17, 2015.  Accessible at: http://www.foxnews.com/us/2015/05/17/lsu-85m-lazy-river-leisure-project-rolls-on-despite-school-budget-woes/

College presidents' salaries are going up. Don't governing boards know they can hire dunderheads for a lot less money?

Salaries for private college presidents went up 5.6 percent between 2012 and 2013, according to a  Chronicle of Higher Education survey. Lee Bollinger is the highest paid president. He made $4.6 million in total compensation in the survey year. Amy Gutmann ranked second. Her total compensation was more than $3 million in the year of the survey including a bonus totally a cool million and a half.

Lots of these academic high rollers get salary enhancements in the form of puffball performance bonuses and deferred compensation packages that help them manage their taxes. As if some bloated college president needs the incentive of a  financial bonus in order to make key executive decisions like raising tuition, and outsourcing student services.

Of course the governing boards insist they have to pay ridiculous salaries to attract top talent. What a load of horse manure.  You don't need to pay $4.6 million to find a president wiling to defend race-based admission policies, like Bollinger did at the University of Michigan.

You don't need to pay a guy millions of dollars to wear a bow tie and host elaborate parties for big-shot donors, like Ohio State University did when it had Gordon Gee on the payroll.

Gordon Gee: Goof balls can be hired for a lot less money.

You don't have to pay $3.0 million a year to hire someone who writes mediocre books, which is what University of Pennsylvania pays Amy Gutmann, author of Democratic Education, one of the purest examples of academic bull crap you'll ever want to read. And Vassar could certainly find a dullard president for less than it pays Catharine Hill, whose only solution to the student  loan crisis is better counseling and long-term repayment plans!

You don't need to pay a half million or so to find a president willing to hold photo ops serving pancakes to students while presiding over a university that pays assistant football coaches a million dollars a year--more than the president himself makes--as Louisiana State University did when it hired F. King Alexander.

This is the same Louisiana State University, by the way, that is planning the construction of an $85 million "lazy river" recreational project that includes a "water feature" shaped in the letters of LSU.  Why is LSU doing this?

According to Laurie Braden, LSU's Director of University Recreation,  “I will put it up against any other collegiate recreational facility in the country when we are done because we will be the benchmark for the next level.” The next level of what--the next level of insanity?

I wonder how much Braden makes for dishing out that kind of logic?

University governing boards need to be clued in to this simple fact: They can hire dunderheads for a lot less than a million dollars  a year.  For a lot less money, presidents can be found who will sign contracts with Starbucks  so that university students pay four bucks for a cup of coffer instead of a quarter.  Presidents can be hired who will sign contracts with Barnes & Noble to sell overpriced textbooks to students and give the university a  percentage of the profits. Presidents can be found at reasonable salaries who will collude with banks and credit card companies to encourage students to utilize the services of favored financial institutions.

CEOs can certainly be found at very reasonable salaries who are willing to kiss the butts of student protesters and coddle the kids who take over the presidents' offices.

In short, this nation could run a crappy higher education system like the one we have for a lot less money.

LSU President F. King Alexander: Would you like pancakes with your fee bill?
Photo credit: Baton Rouge Advocate and Hilary Scheinuk

In the Jubilee Year of Mercy, Catholics Should Urge the Government to Forgive Student-Loan Debt

According to Old Testament scripture, a jubilee year occurs every fifty years; and in that year, slaves are freed and debts are forgiven. Leviticus 25:8-13. Pope Francis has proclaimed a Jubilee Year of Mercy for the Catholic Church that begins on December 8, the Feast of the Immaculate Conception. Would not this be a good time for the  U.S. government to forgive  $1.3 trillion in student-loan debt?

Perhaps not all of it. Of the 41 million people who have outstanding student loans, a great many received good value for their college education and can pay back what they borrowed. But 10 million people have either defaulted on their student loans or are delinquent in their payments. Millions more have gotten economic hardship deferments and aren't paying down their loans.

And for some people, their student loan debt is completely out of control. Liz Kelly, for example, featured in a recent New York Times article, is a 48-year old school teacher who owes $410,000 in student-loan debt--most of it accumulated interest. Will she ever pay it back? Not likely.

A 2014 law review article reported that 241,000 people with student-loan debt filed for bankruptcy in 2007, but less than 300 of them even tried to discharge their student loans. Either they figured it would be hopeless to try wipe out their student-loan debt in the bankruptcy courts or they didn't have the money to hire a lawyer to assist them.

And yet, as Paul Campos explained on his blog site and in a recent book,  we have thousands of unemployed or underemployed attorneys, many of whom have crushing student-loan debt themselves. Why doesn't the government, as an act of mercy, encourage these idle lawyers to help people discharge their student loans in bankruptcy?

Mercy, Pope Francis reminds us demands justice. "True mercy, the mercy God gives to us and teaches us, demands justice, it demands that the poor find a way to be poor no longer," Pope Francis explained. Mercy demands that institutions strive to make sure that "no one ever again stands in need of a soup-kitchen, of makeshift lodgings, of a service of legal assistance in order to have his legitimate right recognized to live and to work, to be fully a person."

Our country now has 23 million people who are unable to pay off their student-loan debt.  Indeed, about 150,000 elderly people are having their Social Security checks garnished by the federal government to offset unpaid student loans. For these people there is no Jubilee Year of Mercy--no forgiveness, and little relief even in the bankruptcy courts.

We are now a secular people--a people who pride themselves on having driven religion out of the schools and the public square. But surely we are not a heartless people. Surely our hearts are susceptible to warming by the words of a great man like Pope Francis.

So let us do mercy in the Jubilee Year of Mercy. And if our government is incapable of mercy, let us look for ways we as individuals can render mercy and to work for a system of higher education that does not drive millions of students into the poor house.

New York Times essayists argue for subsidized food, housing, and transportation for college students. Well, why the hell not?

Sara Goldrick-Rab and Katharine M. Broton argued in the New York Times today that federal poverty programs should be expanded to include college students. Some college students are homeless, the authors point out, and one in five reported in a recent survey that they had gone hungry at least once in the previous 30 days due to lack of money.

This is the second vacuous essay published in the New York Times over the space of less than a week about the cost of higher education and what to do about it. Just a few days ago, Vassar's President Catharine Hill argued against Bernie Sanders' "College For All" proposal to allow people to attend a public four-year college for free. Hill said the solution to the high cost of higher education is better counseling and long-term repayment plans.

If I were grading President Hill's essay, I would give it a C- and scribble "trite and unoriginal!" in the margin of her paper in bold red ink. If I were grading Goldrick-Rab and Broton, I would assign them a failing grade but give them the opportunity to resubmit after doing a little research.

Yes, there are homeless college students--about 50,000, according to one report. But at least some of those people were unscrupulously recruited by colleges who just want their Pell Grant money and the proceeds from their student loans. Do we really want to expand the federal school-lunch program to deal with those people as Goldrick-Rab and Broton propose? Shouldn't we just help homeless college students in the same way we help all homeless people?

Currently, the U.S. government is spending about $165 billion a year on various student-aid programs, including loans, grants, and campus work-study jobs. And the government gives food stamps to 52 million people, including some college students. Isn't that enough?

Interestingly, neither Vassar's Hill or Goldrick-Rab and Broton (from the University of Wisconsin apparently) offered any serious plan for reducing college costs. Hill said vaguely that students need longer repayment plans to pay their tuition bills and the Wisconsinites didn't offer any suggestions at all.

Higher education is a great business isn't it? The universities can jack up their tuition as high as they like, knowing the students will simply borrow more money to cover their fee bills.  Who cares if the saps can't repay their student loans? "Not my problem" is the higher education industry's stance.

And when the public wakes up to the fact that the cost of going to college is out of control, who does it turn to for answers? People like Catharine Hill, Sara Goldrick-Rab and Katharine Broton--lackeys of the institutions that created the problem. And the New York Times, which doesn't really give a damn about the student-loan crisis, obligingly prints these dopes' essays on its op ed pages.

Sara Goldrick-Rab wants to expand the school-lunch program to include college students

References

Sara Goldrick-Rab and Katharine M. Broton. Hungry, Homeless and in College. New York Times, December 4, 2015, p. A33. Accessible at: http://www.nytimes.com/2015/12/04/opinion/hungry-homeless-and-in-college.html

Catharine Hill. Free Tuition Is Not the Answer. New York Times, November 30, 2015, p. A23. Accessible at: http://www.nytimes.com/2015/11/30/opinion/free-tuition-is-not-the-answer.html?_r=0

Let's admit it: Bernie Sanders' "College for All Act" proposal has some good ideas

Bernie Sanders' "College For All Act" proposal: "That's not gonna happen."

In an old episode of The Walking Dead, an armed wacko asks Sheriff Rick if he and his buddies can join Rick's tribe of survivalists. "That's not gonna happen," Sheriff Rick rasps with his impeccable Georgia accent.  And then Rick shoots the wacko dead with his trademark service revolver.

Something similar might be said about Bernie Sanders' "College For All Act" proposal. That's not gonna happen. Nevertheless, Bernie has come up with some good ideas that are worth examining.

First, and most importantly, Bernie proposes free college tuition for Americans to attend 4-year public colleges or universities. That's a great idea and would actually cost Americans much less than we are spending now in federal student aid.

But, as I said in a previous blog posting, the for-profit college industry and the private non-profits are happy with the status quo and couldn't survive a week without federal financial aid. The only way Bernie's free tuition plan could work would be to shut down the present student-aid program, and that's not gonna happen. So Bernie's College For All Act is--as I said earlier--Dead On Arrival.

Bernie's college funding proposal has some other good ideas, however. Along with a lot of other responsible people, Bernie proposes a simplified Student Aid Application process. Last year, Senators Lamar Alexander and Michael Bennett proposed a FAFSA form that only has two questions.  Almost everyone agrees that the present Student Aid Application process is confusing and overly complicated, so we should listen to Bernie when he says the process should be simplified.

Bernie also proposes lower interest rates and an unlimited opportunity for students to refinance their student loans at lower interest rates. This is a great idea because, as a recent New York Times article made clear, it is the accruing interest on student loans, not the amount that students originally borrowed, that is crushing millions of student-loan debtors. The Times told the story of Liz Kelly, who borrowed about $25,000 to get an undergraduate degree and then borrowed more to go to graduate school. The total amount Kelly borrowed was less than $150,000, but she now owes $410,000 due to the interest that accrued while her loans were in forbearance or deferment.

Critics will say that lower interest rates and easy loan consolidation will cost taxpayers billions, which is true. But let's face it: The people whose loans have ballooned out of control due to accrued interest and fees will never pay the loans back anyway. Do you think Liz Kelly will ever pay off the $410,000 she now owes?

There is one huge caveat to Bernie's proposal to allow students to refinance their loans. There are now 41 million outstanding student-loan debtors, and many of them took out multiple loans. Allowing millions of borrowers to refinance their loans would create an administrative nightmare. In my opinion, it would make more sense to just forgive the interest on those loans or give overwhelmed debtors reasonable access to the bankruptcy courts.

But, as Sheriff Rick said to the armed wacko, "That's not gonna happen." Apparently, our national government would rather create a real-life class of The Walking Dead than take responsible action to give honest but unfortunate student-loan debtors some relief.

The Walking Dead: These folks will never pay off their student loans.

References

Lamar Alexander & Michael Bennett. An Answer on a Postcard. New York Times, June 19, 2014, p.  A25. Accessible at: http://mobile.nytimes.com/2014/06/19/opinion/simplifying-fafsa-will-get-more-kids-into-college.html?_r=0

Kevin Carey. (2015, November 29). Lend With a Smile, Collect With a Fist. New York Times, Sunday Business Section, 1. Accessible at: http://www.nytimes.com/2015/11/29/upshot/student-debt-in-america-lend-with-a-smile-collect-with-a-fist.html?_r=0

The percentage of low-income students going to college went down while Pell Grant spending went up: What's going on?

According to the American Council on Education, the percentage of low-income students enrolling in college has gone down. What's going on?

ACE reports that the percentage of recently-graduated low-income students who enrolled in college dropped from 55.9% in 2008 to 45.5% in 2013.  College enrollments also dropped for other income groups, but not by nearly as much.

Can the drop be attributed to insufficient federal student aid? Probably not. The Department of Education reported that federal student aid increased by 29% from 2009 to 2012--rising from $129 billion in FY 2009 to $166.9 billion in FY 2012.

And Pell Grant funding (grants to low-income college students) actually tripled from 2007 to 2011, going from $13.6 billion in FY 2007 to  $41.6 billion.

Perceived cost of higher education. ACE speculated that the perceived cost of higher education may have discourage low-income students from going to college, and this makes sense. Low-income young people may not be aware that many private colleges actually discount their tuition by more than 40 percent for incoming freshmen. In other words, potential students from poor families may not know that the sticker price is only the sucker price and that most first-year students get the benefit of deep discounts.

Going to work rather than going to college. ACE suggested another explanation for the percentage drop in low-income college students: many low-income students are simply skipping the college experience and going to work. This explanation also makes senses.

In my own family, I have a nephew who dropped out of college and got a job as a pipe fitter working in the shipbuilding industry. He's making good money and he found a girl friend who is also making good money as a pipe fitter. In fact, my nephew is making more money in his present job than he would make if he got a college degree and got a job as a school teacher. Is he likely to go back to college? I don't think so.

Low-income families have gotten wise to the for-profit college industry. I think there is a third possible explanation for the drop in low-income students going to college: low-income families may have gotten wise to the for-profit college industry.

All over the country, state attorney generals are investigating the for-profit colleges based on allegations that these colleges have engaged in misrepresentations and fraud.  Some for-profits have been fined. Corinthian Colleges filed for bankruptcy and several for-profits have closed.

It could be that low-income and minority students--who have been the target of the for-profit colleges--have figured out that many of these joints charge too much and don't deliver on their promises.

Conclusion

Low-income individuals are going to college in smaller numbers, and this may not be bad. If they can get good jobs without going to college then they can avoid the huge opportunity costs of being a college student--forgone wages and student loans.

And if young people from low-income families are becoming more appreciative of the risk of borrowing money to attend a for-profit college, that is certainly good news. Although the Obama administration hasn't been as aggressive as I think it should be toward the for-profit college industry, it has taken some steps to rein in abuses.  And state officials have taken action against abusive for-profits colleges as well. This is good news.

References

American Council on Education. ACE Fact Sheet on Higher Education. Pell Grant Funding History (1976 to 2010). Accessible at: http://www.acenet.edu/news-room/Documents/FactSheet-Pell-Grant-Funding-History-1976-2010.pdf

Misty Baily. Attorney Generals Expand Probe into For Profit Colleges. Education News, January 14, 2014. Accessible at:  /www.educationnews.org/higher-education/attorney-generals-expand-probe-into-for-profit-colleges/#sthash.pKZVeW5V.dpuf

Kelly Field. Attorneys General Take Aim at For-Profit Colleges Institutional Loan Programs, Chronicle of Higher Education, March 20, 2012. Accessible at: http://chronicle.com/article/Attorneys-General-Take-Aim-at/131254/

Scott Jaschik. The Missing Low Income Students: Study finds drop in percentage of low-income students enrolling in college. Inside Higher Education, November 25, 2015. Accessible at: https://www.insidehighered.com/news/2015/11/25/study-finds-drop-percentage-low-income-students-enrolling-college

U.S. Department of Education. Fiscal Year 2012 Budget Summary--February 14, 2011.  Accessible at: https://www2.ed.gov/about/overview/budget/budget12/summary/edlite-section2d.html

U.S. Department of Education. Pell Grant Funding Status. Accessible at:
http://www2.ed.gov/programs/fpg/funding.html

Bernie Sanders' proposal for free tutiiton at public universities could actually save taxpayers money. So why don't we do that?

Bernie Sanders has proposed free tuition at all American public universities. Let's look at that proposal and also examine the reasons why Bernie's scheme will never be implemented, even though it would cost taxpayers less money than they are spending now on student financial aid.

According to Catharine Hill, president of Vassar College, free tuition at the nation's public universities would cost about $70 billion, which is a lot of money.

But the federal government will distribute almost $35 billion  this year in Pell Grant funding to low-income students. If Congress closed the Pell Grant program and simply provided free tuition at public universities, half of the estimated cost of Sanders' plan would be covered by the switch.

Where would the other $35 billion come from?

In addition to Pell Grants, the federal government operates the federal student loan program, which will distribute more than $100 billion a year in college-loan money. About a third of that sum will be lost due to defaults It would actually be cheaper to provide every American with free tuition at a public university than to operate the federal student-loan program at $100 billion a year and the Pell Grant programs at $35 billion.  In fact, this change would save the federal government about $65 billion a year.

Why then don't we adopt Bernie Sanders' proposal?  Three reasons:

1) The for-profit college industry would collapse. Currently, the for-profit colleges get about 25 percent of all federal student-aid money. If the government stopped subsidizing the for-profit college sector, the for-profits would be forced to close because they get 80 to 90 percent of their operating revenues from federal funds. In fact, offering free tuition at public universities in lieu of the current student-aid system would shut down the for-profit college industry almost overnight.

This sleazy sector of higher education will never allow Bernie Sanders' plan to be operationalized. The for-profit colleges have made strategic political contributions to key congresspeople, and they own most of the lobbyists in Washington. For this reason, Bernie's free-tuition program is already dead.

2) Nonselective private colleges would collapse.  Bernie's free-tuition plan would also kill the nondescript private colleges. Why would anyone attend Malloy University on Long Island, Cabrini College in Philadelphia, or Pine Manor College in Boston if they could go to a state university for free? This sector of higher education will surely do everything it can to make sure Bernie's pipe dream never  becomes a reality.

3) Elite colleges and universities would suffer. Free tuition to attend a public university would not mean the death of Harvard, Yale, Vassar, Dartmouth, and the other elite private colleges. Most of them have large endowments that would keep them afloat even if the federal student-aid program was closed. Moreover, there will always be wealthy families willing to pay almost any amount of money for their children to attend an Ivy League school, even if the public universities were free.

Nevertheless, the Harvards and the Yales do quite well under the status quo. They certainly get a hefty financial boost from Pell Grant money and federal student-loan revenues.  Having a federal cash infusion allows then to jack up their tuition, because they know students will simply borrow more money to cover tuition hikes. When Catharine Hill of Vassar spoke out against Bernie Sanders' free-college plan in the New York Times yesterday, she was speaking not just for Vassar but for all the elite colleges.

Conclusion: Bernie's Free-Tuition plan is Dead On Arrival

In short, Bernie Sander's proposal to give everyone a free undergraduate education at a public college or university is DOA.  The for-profit college industry  and the non-profit private universities simply will not allow it.  These two groups own Congress, and they like the status quo.

Bernie's College-For-All plan: DOA

References

American Council on Education. The Status of Federal Student Aid Programs. Washington, DC: Author, 2015. Accessible at: https://www.acenet.edu/news-room/Documents/The-Status-of-Federal-Student-Aid-Programs.pdf

David Halperin. The Perfect Lobby: How One Industry Captured Washington, DC. The Nation, April 3, 2014. Accessible at:  https://www.thenation.com/article/perfect-lobby-how-one-industry-captured-washington-dc/

Catharine Hill. Free Tuition Is Not the Answer. New York Times, November 30, 2015, p. A23. Accessible at: http://www.nytimes.com/2015/11/30/opinion/free-tuition-is-not-the-answer.html?_r=0