Comment by charlieflowers | Hacker News Reader

Comment by charlieflowers | Hacker News Reader

I have wondered for a long time now where all the college tuition money goes.

Consider that: (1) the cost of tuition has grown FAR faster than inflation, and is now sky high, (2) A huge percentage of students need and get student loans, (3) student loans are one of the few types of liabilities that bankruptcy can't wipe out.

So "everyone" (speaking loosely) goes to college, and "everyone" gets a loan. The college gets its money up front, and bears no risk of having that money taken away. This represents a huge flow of money into universities. Where does it go from there?

How does college tuition revenue yearly compare to Apple's revenue from iphones yearly? In the case of Apple, I can see where the money goes ... Apple employs a huge number of people working on expensive ongoing operations.

What are colleges doing with all this money? Surely all of it is not being soaked up by overpaid administrators?? A money stream that large ought to have a big, obvious wake behind it, but I don't know where that money goes. Can anyone enlighten me?

The increases in spending are indeed soaked up by overpaid administrators and their teams, known as "institutional support." For state schools, budget information is public and you can see for yourself how the university spends its money. This opinion piece regarding the University of Minnesota distills some of that information: http://www.startribune.com/opinion/42550752.html

But in one category, expenditures have nearly doubled over the last five years. That category is "institutional support," which consists essentially of central administration. The 2008-09 budget plan increases expenditures for institutional support by more than $143 million, or 80 percent, over the figure for 2004-05. The spending increase in this category alone covers the amount by which the governor proposes to reduce the state’s annual appropriation to the university.

What has the university bought with all this additional money spent on "institutional support"? Among other things, a growing array of vice presidents and associate vice presidents. The university now employs 12 VPs, several of whose positions have been created during the last five years. Every occupant of such a position earns a six-figure salary, starting at around $250,000 per year. Multiply by twelve, add a number of associate VPs, then staff support, plus assorted expenses for everything from office supplies to travel — and the institution spends millions more each year on central administration

This same pattern can be seen at almost any state university in the United States.

Where does it go? Well, some universities apparently are tempted to put it in a nice slush fund. See the University of Wisconsin as one known example. http://pjmedia.com/instapundit/167425/

More reports on one university so far discovered to have a slush fund, the University of Wisconsin:

UW Slush Fund Exposes Hypocrisy of Liberal Group http://mediatrackers.org/wisconsin/2013/04/23/uw-slush-fund-...

UW slush fund insults citizens http://www.beloitdailyneaws.com/opinion/editorial-uw-slush-f...

Outrage grows as University of Wisconsin System admits it 'did not draw attention' to cash http://www.jsonline.com/news/education/outrage-grows-as-uw-a...

I wonder how many more state-run institutions of higher education will have similar scandals in the next few years.

Many universities now have 1 administrator for every professor or more.

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