Between this summer's battle over student loan interest rates and President Obama's recent move to give colleges economic grades, the high price of college has moved front-and-center in the news. On Thursday, we looked at some of the reasons that tuitions have been skyrocketing, and what you can do about it. Dylan Matthews, at The Washington Post's Wonkblog, has been doing some outstanding work on this, and today Jaeah Lee and Maggie Severns, writing for Mother Jones, offered a solid follow-up. Their focus is on one specific spending item -- salaries -- and their articles look at what happens when college presidents and celebrity faculty members are paid like rock stars -- and given the kinds of perks that are usually associated with Wall Street.
In a lot of ways, trends in higher education mirror the rest of the economy, in which a few top-level executives have seen their salaries rise exponentially, while lower-level workers have seen their pay and benefits shrink. A recent article in the Chronicle of Higher Education laid this out, noting that, while faculty members have had modest salary growth in the last few years, these gains have been swallowed up by a 3 percent inflation rate. In other words, when it comes to bottom line spending power, faculty members have experienced between a 0.8 percent and 1.4 percent drop in their salaries.
But if rank-and-file faculty members are making less money, top-level administrators are making a lot more. On average, Lee and Severns report, college presidents make 3-4 times as much as their average professors. And, with an ever-increasing number of non tenure-track and part-time instructors filling the ranks of the faculty, it's not surprising that that gap is getting even wider.
Lee and Severns also offer a list of outrageous perks paid to college administrators. While strange, the list of low-interest loans and staggering retirement/severance bonuses is likely to be depressingly familiar to anyone who has watched Wall Street for the last few years. And the justification for these bonuses is also familiar: like their Wall Street brethren, these top-earning academics were paid outrageous sums because, in the words of one university administrator, "In basic financial terms, the return on investment is remarkably high."
Fair enough, but one question remains: is this return on investment, which is usually measured in terms of fundraising and building projects, accruing to students? Or are America's students borrowing a record amount of money to pay for a fundraising staff whose efforts have little to do with improving educational outcomes?
Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.