[hardcandy]

You're missing the forest for the trees. What are ''the true costs of school''? Someone who loves to teach sitting in a classroom teaching. It can be dirt cheap or it can be very expensive. Supply and demand sorts out the details. As more money flowed into the system, administration bloated and became its own entrenched interest group, with very little connection to actual education.[1] Does the UC system need 500 administrators making >$500k year each?[2] As it stands, college for most of my friends was a 4 year social safari interrupted by infrequent periods of intense cramming in between high school and joining the work force. Do you think the average 18-21 year old at a state school is a scholar passionately indulging their love of learning? Almost all education is self education at the end of the day. As soon as we solve for the credentialing/pedigree/signaling problem, online education will destroy a huge amount of offline education and rightly so.

As for the mortgage interest deduction, how wouldn't it boost housing prices? It effectively lowers the mortage rate by your marginal tax bracket which is close to 50% in California. So instead of a 3.5% 30 year rate I'm now below 2%. Cheaper money stimulates borrowing. It doesn't matter how low NIMBYism pushes supply in the face of overwhelming demand, each individual still has a maximum price they can pay, and subsidized interest rates raise that price point.

[1] http://reclaimuc.blogspot.com/2011/09/senior-administrators-...

[2] http://www.latimes.com/local/education/la-me-uc-spending-201...

[greeneggs]

> Does the UC system need 500 administrators making >$500k year each?

This statistic is incorrect. In 2014, there were 445 UC employees making >$500K/year each. This includes everybody, not just administrators.

You can get a list of them all here [1]. I didn't go through the whole list, but from sampling a few random pages, I'd guess that there are <20 administrators making >$500K. They are mostly medical school professors, some athletic coaches, and, e.g., the Chief Investment Officer. There are also some CFOs and Executive Deans, and maybe I missed something, so feel free to correct me.

[1] https://ucannualwage.ucop.edu/wage/

[paganel]

> This statistic is incorrect. In 2014, there were 445 UC employees making >$500K/year each. This includes everybody, not everybody, not just administrators.

Not the OP, but what you're saying just proves him/her right. You're basically saying that he/she had provided a number with only 10% margin of error (which on the Internets is not bad) and then went all semantics on him/her, I'm talking about the part with the people not being "administrators". For better or for worse you can call a person earning >$500k a janitor on her/his employment papers, but I'm still 99.99% sure that person is still doing highly administrative tasks (like setting up golf matches in his/her google calendar) and not mopping the floors.

And the part where you say that artificially subsidizing a finite product (in this case houses) does not cause its price to go up makes me wish that you're not in any way related to the economics discipline. Because if you were then I'd say that the future does not look bright for students of economics.

[saturdaysaint]

There is a vast, non-semantic difference between having 500 rich administrators/functionaries and having 445 employees. How exactly do you hire someone capable of instructing surgeons without paying them like a surgeon? Once you take out the highly skilled/specialist doctors, it's not a very damning list for a vast school system.

[paganel]

I stand corrected. I actually visited https://ucannualwage.ucop.edu/wage/ and played with the search settings a little and found out that out of the 445 employees with earnings >$500k about 380 or so have "prof" in their title, so I guess you're right.

Fact is that the cost of university is still too damn high. If it's not the teachers' salaries then what might the reason be?

Mind you, I'm not directly involved in this as I live half a globe away from the States and I'm a former college dropout now in my mid-30s, I'm just thinking that there are huge opportunity costs that we might pay, as a species, for not letting the brightest people attend University based on intellectual merits alone. I know that there are countless "help-the-poor-attend-university" programs, but, as far as I can tell, in order to be part of one you need make no mistakes, as in you need to pass all the exams in order for the financial help to keep coming (I might be wrong on this). Plus, there's all the bright lower-middle-class people whose parents are "too rich" for their kids to receive any financial help but too poor to afford to pay their kids' university. You risk losing these people's minds big time.

As a solution I would impose only having access to University if you pass an entry exam, and everything to be subsidized by the State. It doesn't matter if your dad is the President of America or the CIA chief, it doesn't matter if your dad has paid $100 million to the University, it doesn't matter if you're white, black, yellow or purple-colored. Only your intellectual ability should count.

[KKKKkkkk1]

The UC system should be paying exactly $0 to football coaches and investment officers. It's an education system. The NFL and Wall Street are perfectly capable of taking care of football and investments without the UC's help.

[dpark]

I don't know about UC, but it's my understanding that in many universities, the football programs pay for themselves and then some.

As for the investment officers, someone has to manage the universities' endowments. Certainly, they could just liquidate their endowments and spend it immediately on, say, urgent needs and tuition reduction. But then when they need to, e.g., renovate a dorm, they will lack the money to do so.

[dmoy]

At any decent team this is the case (that football pays for itself, plus the other sports programs). Shit even at my alma mater which was awful (at football), this was still the case, and the head coach brought in like $1m/yr. Lot of money there.

Not enough to pay for that fancy new stadium though...

[dpark]

The fancy new stadium was likely paid for almost entirely with donations, though. Those don't tend to be paid for by the universities.

[newjersey]

I think UC would still do well to publicly announce a pay cap. Maybe $1M and say nobody makes above that amount.

Once the superstars are limited to $1M, I think others will fall in line as well. Don't like it? Quit.

[thesimpsons1022]

just stay in new jersey. we don't want our schools losing more professors to USC and Stanford.

[newjersey]

I'm sorry but there's no other way. The cost of education has to come down and that means professors, coaches, and administrators have to pay themselves less.

We're already cutting cost at the lower end of the spectrum with adjuncts. Why not do the same at the top? On second thought $1M is actually too high. It should be lower. Probably a cap of $750k is fairer.

DJ

[dpark]

Professors already make less in academia than they would typically make in the industry. I don't think the best of them would stick around if they were handed a 20% pay cut.

Similarly for administrators and coaches, meaningful pay cuts would just push many of them out the door to greener pastures.

The cure for high tuition is unlikely to come just from cutting salaries.

[newjersey]

Not just from cutting salaries but cutting salaries shows they are serious about it. I stand by it.

I've hinted at this elsewhere. There is no reason that anyone should be making more than 100x the minimum a full time worker should be making. I'd propose increasing the marginal rate to something obscene like 90% on income above that point. I stand by it as well.

If we are to make college education free of cost, we have to make them cheaper. I draw parallels here between higher education and healthcare. Yes, customer service will become worse in the process. However, I think if we manage expectations, we can do some serious cost-cutting while maintaining a certain minimum standard. This is true in both education and health care. Anyone who aevocates single payer without conceding that the list of options patient/student shrinks is probably not being honest. But this shrinking is OK.

First thing that should shrink is the obnoxious attachment to collegiate athletics. Even if it were true that college athletics is a net positive for a university's balance sheets, I don't think it is a university's place. This is a part of the overall "remove bling" from education. Other efforts could be trying to find ways to make housing less expensive and not as fancy.

Second thing that should shrink is the myriad of regulations from dozens of sources imposed on universities. I didn't know how many things they have to comply to. This is insane.

But coming to point, professors won't quit if wages go down. If they do, that's fine. There are other professors.

[Shivetya]

Not true. This assumption only works when one decides that all professors are equally employable both in colleges and private industry. It also assumes an unlimited number of jobs.

Worse for college professors they have no choice in having their salaries come down because it won't be a decade before college education done online becomes the main alternative. With the pay scales differences across the world being what they are the fact is you will likely have may opportunities for professors in India and elsewhere teach course with the same expertise.

People are quick to bitch and bemoan medical costs from pills to services and pointing overseas "SEE SEE SEE" about how their costs are lower.

Well guess what, education will be even cheaper because the student doesn't have to travel to get the world class education. All that needs to change is regulations which will prevent it.

[derefr]

> As it stands, college for most of my friends was a 4 year social safari

And that's what costs money, insofar as it raises people's social class and gives them connections. Learning is a trivial cost in comparison, and can be ignored in the calculation; it's something you effectively get "for free" with the price of admission to the social-class-higher-than-yours practicum that is university.

Note that community colleges, which have just as much "learning" but no potential for class-raising, don't have spiralling costs. Community college costs what learning costs.

[GauntletWizard]

And yet, despite more and more people getting an education, class stratification getting worse in one of the common talking points. How do you explain that?

[derefr]

The people who are now "getting a [university] education" who previously weren't, are people already in the social upper-middle class, going to upper-middle class universities where they just end up enculturating further to the class they're already in.

People in the upper-middle class will only experience social-class mobility by going to an upper-class university (e.g. one of the Ivies, and even then only certain programs that haven't already been flooded by other upper-middle class entrants.)

Meanwhile, very few people in the lower-middle class go to university; they "get an education" by going to a trade-school or to community college, thus also avoiding enculturation. And people truly in the lower class (e.g. immigrant agricultural workers) don't even consider higher education to be an option, despite government student loan programs being aimed at them (with the explicit goal of enculturation!) more than anyone else.

Generally, though, mobility between any two classes becomes more difficult as the size-ratio between the source and destination class increases, because every place an individual could go to attempt to immerse themselves in the destination class, is already full of other people of the source class attempting the same thing. The previous mobility from lower-middle to upper-middle class has created a bulging upper-middle, which has killed the ability for people to become upper class. (Though it's easier than ever to enculturate to the upper-middle class, this being basically what happens by default when anyone with a lower-middle-class background finds themselves spending a lot of time on the internet—the internet [outside of own-class-reflecting echo chambers like Facebook] being a universally-accessible upper-middle-class microcosm.)

[ivythrowaway]

Thank you for posting this - it more or less summed up my thoughts exactly. It should also be noted, however, that these "upper-class universities" are increasingly trying to court the "lower-middle class" by offering extremely generous financial aid (usually full rides) to those who have a household income less than 60-80k/yr–though these students make up the vast minority of those in attendance, though a higher amount than upper-middle class students. The result is a sort of unofficial idea of "If you're not already in the 1%, you soon will be."

Columbia University, for example, has its current tuition at around $70k/yr, which is over 2.5 times the average American individual of $26k/yr. Columbia and its peer institutions rarely offer merit based financial awards, thus incentivizing the wealthy who can afford it and the poor who it's essentially free for, while avoiding a large part of the American middle-class altogether.

Another group of schools, besides the Ivies, that primarily serve the upper class are the prestigious small liberal arts colleges, such as Williams, Pomona, Amherst, Middlebury, etc. These are some of the smallest schools in the country, yet have the largest endowments per capita (Pomona's has the fourth largest endowment per student in the country, for example, at $1.5 million / student, which is above both Princeton and Harvard). Taken in conjunction with ~$65-70k/yr tuitions (and increasing at an average of 5% a year!), the results are institutions that cater primarily toward the upper class yet put forward the idea they server everybody by enrolling a token amount of lower class students (as many admitted students unfortunately discover they cannot afford to attend).

Source: I studied this topic at, yes, one of these very institutions. I believe the entire university system–financing especially–needs vast reform.

Harvard also released an [infographic](http://features.thecrimson.com/2015/senior-survey/) on their graduating class of 2015 "by the numbers"–notably, 2% of the nation earns $250k+/yr, but at Harvard they made up 30% of the class. That statistic is increasing, not decreasing.

[ivythrowaway]

It should also be noted that international students are generally not eligible for any financial aid whatsoever through FAFSA (and the "need-blind" admissions process available to domestic students in which these institutions cannot see your financial status in the application process is not available to international students), thus the international students that do attend these institutions are more often than not within the top socioeconomic bracket of their respective country.

[lifeisstillgood]

(This is a set of notes for future reference, not something anyone should read, ever) my apologies.

Intuitively I agree - but what struck me was what do we mean by "class"?

I can sniff some circular reasoning here.

If we say class is culture - and it's easier to hold a certain set of views (liberal market based, empirical lead?) if one is independnatly wealthy and educated in the above market/science combo.

Then upper middle class is probably the "top" of the tree.

Economic is easy - the UK aristocracy is generally marked out by independant wealth - certainly a number of titles gambled their way out of the aristocracy whereas a title is not needed to be considered upper class (see Branson etc). Perhaps a better term is "establishment"

The upper middle class perhaps is those in the 1% still who must work for income. Doctors perhaps?

I would suggest anyone who has seen their wages increase in real terms in past thirty years gets to stay middle class after that and those stagnating can be "working" class. (Quotes are sarcastic)

If I then suggest that the existence of a billionaire is a symptom of a market failure somewhere, then I am probably arguing that the "upper class" is now a fiction created by market failures - that we can and should erode it till the top of the tree is upper middle class.

For example - is a daughter of the revolution, with a Park Avenue address or two upper class? Or is Barack Obama?

I would argue that a new driver for social mobility would then be the compulsory draft - military or civilian.

[thaumasiotes]

I think the best viewpoint I've encountered on what people mean by "class" is this:

Two families are of the same social class if a marriage between them would be unsurprising. Money is a sideshow.

[kilbuz]

Fussell's 'Class' book, although dated, is a useful guide for many of these questions. And a hilarious read.

[kilbuz]

Have you written a book or research publications on this topic? I've always wanted an update to Fussell's 'Class' for the internet generations, and this post is as close to that as I've seen. If you know others who have written on the topic, please list them here. Thank you.

[robbiep]

Class stratification (social mobility) is becoming worse in the United states. This is not a global first world problem although education has been following similar trends in other first world countries (most notably the UK and Australia)

[slg]

According to you second link, the UC system has a budget of $27 billion. You could fire all those administrators making over $500k and you wouldn't even save 1% of the annual budget. Is administrative bloat a problem? Sure. But blaming it for the tuition increases we have seen is like blaming the national debt on inefficiencies in the EPA.

[ploxiln]

That particular statistic is used for effect, and the article admits it's not the biggest problem:

> While big paychecks for those in UC's senior management group — including the president, the chancellors and other top administrators — attract the most attention, they comprise less than 1% of the $27-billion budget, officials say.

> It is the next layer of well-paid administrators that has grown most significantly over the last two decades. From 2004 to 2014, the management and senior professionals ranks swelled by 60%, to about 10,000, UC data show.

There are indirectly related tidbits all over the article and I couldn't find what I'd really like to see: a histogram of administration salaries and another of faculty salaries.

Anyway, here's another unrelated but interesting tidbit from that article:

> Efficiency experts brought in to assess the UC Berkeley bureaucracy a few years ago concluded it was top-heavy. Bain & Co. consultants tallied 11 layers of management between the chancellor and front-line employees, suggesting that the organization had too many bosses. More than half of all managers — about 1,000 — had three or fewer direct reports, and 471 were in charge of exactly one person each.

Isn't it funny that they had to hire top-dollar big-name consultants to find out they have way too many middle managers ... some of these managers should have the time to figure out how many layers of management there are and how silly some of them are. But then again, of course they didn't: more managers results in more politics results in less effective management.

[doctorpangloss]

> senior professionals

Do they mean medical professionals? If you actually look at the highest-paid (and $100k+, for that matter) staff lists, there are really a tremendous amount of doctors. That should not be surprising at all, since UCSF, UCLA and UC Davis operate huge hospitals.

It's wildly inappropriate to lump the "senior professionals" in with management. The hospital system, with the exception of the training it provides for the medical schools, is effectively orthogonal to the educational mission of most of the UC system.

[slg]

Bloat increasing is natural for any growing bureaucracy and the UC system is certainly growing. The article cites enrollment has grown by 77,000 students over the last 15 years. That works out to almost a 50% growth rate (although it was a longer time period than the admin growth rate used). So a 60% growth in middle managers doesn't seem completely unreasonable. I am sure there is plenty of waste there, but once again it isn't nearly enough to explain the type of tuition increases that have happened over recent decades.

[specialist]

Supply and demand sorts out the details.

Maybe.

I place more weight on incentives. Design of the markets. Checks and balances. Transparency and accountability.

need 500 administrators...?

The insufferable waste I witnessed in higher ed is no different than any where else I've worked. Biggest factors are scale and bureaucracies.

As terrible as higher ed is, I'm certain I don't want it to become more business like, assembly line efficient. Whatever magic is to be found in higher ed is because its weird, chaotic, diverse.

As for the mortgage interest deduction, how wouldn't it boost housing prices?

Second order effect.

[KKKKkkkk1]

And one of the most magical things about US higher ed is that it just swallowed 400,000 loans funded by taxpayers without as much as a burp.

[hiram112]

Spot on. It's becoming increasingly clear that the student debt bubble will blow up, no differently than the housing bubble.

And just like the housing bubble, the clever ones are going to end up getting Uncle Sugar to pay off their loans, while a large majority will end up 'doing the right thing' to their own disadvantage. Of course, the big banks and financial entities that own these loans will come out just fine.

Then we can move on to the next staple to financialize, perhaps unborn generations since there's not much left.

[specialist]

Higher ed already got their money. The banks got stuffed.

[CyberDildonics]

Pretty much spot on I think.

There is a mentality I see in a lot of young people that they think they need someone to teach them. If people can get over this and use something like an interactive and visual web page they can learn much faster and easier than through a lecture or through books.