By Professor Doom
“Because we don’t have enough offices,
we’ll be putting you in temporary trailers…”
--Admin announcement.
It sounds reasonable enough, until you realize the school has less faculty than
ever, despite having more students than ever…the offices were all being taken
over by the new administrative hires. When I resigned from the place years
later, they started moving us to abandoned student dorms so decrepit that the
stairs were unsafe. Despite faculty having no place to go, the school opened at
least 5 administrative palaces over the course of 4 years.
Every year or so I talk about a part
of higher ed that very few know about, even people that work on campus every day:
the insane real estate buying and building spree. Students have no means of
knowing about it—all they care about is being able to get to classes, so as
long as construction doesn’t shut down access roads for too long, it never
makes their radar. Similarly, faculty usually have no idea, because we have no
input or control over such things.
The buying is
really remarkable; New York University gives a good example of how these places
snap up mansions and spend ridiculous amounts of money on renovating
administrative palaces (and
such knowledge is only known because researchers decided to specifically look).
Thing is, NYU is not exceptional, as I’ve seen other schools also spend
mind-boggling sums on real estate, often explicitly paying more than market
price--almost certain in exchange for personal kickbacks to admin making the
buying decision, though that’s just a guess on my part. I’ll leave it to the gentle
reader to conjecture why absolutely nobody in any position to do anything about
it can even guess why else our grotesquely overpaid administrative caste are
incapable of making decent real estate deals.
Now, it takes
years to make all the bribes plans necessary to get something built, so
I totally understand how a school can be opening buildings even as the student
base is dropping. Trouble is, across the country the total number of college
students is dropping, and this trend has been for five years now—more than long
enough for even highly incompetent administrators to go “gee, maybe we should
stop building up the campus.”
Now, we pay our
“leaders” in higher ed a great deal of money so they aren’t that incompetent
right? We’ve stopped the madcap building spree, right? Not a chance:
It’s so bizarre
to watch this madness continue unabated, but I can see what’s happening here.
Our higher education system is massively overbuilt, we easily have enough
capacity now to slam the entire population of the country into college or
university. So, here’s the reasoning:
Because our
institutions are so overbuilt, their only hope for survival is growth.
This growth,
absolutely necessary growth, can only come from one way: cannibalizing students
away from other schools in the system.
The only way to
attract students at this point is to offer the newest, most luxurious
accommodations. Dorms which are already 5 years old are ancient by today’s
standards, and need to be knocked down to put up something more chic. Bigger
climbing walls, longer lazy rivers…whatever it takes.
It’s so
infuriating that our leaders in higher ed have squandered the huge money
pouring in from the student loan scam. Imagine if they’d invested it wisely,
instead of ploughing it all into insultingly huge salaries, golden parachutes,
and sparkling palaces.
Because our
leaders failed to build prudently, because they overbuilt, their only chance is
to continue to overbuild. How bad is it?
Colleges and
universities collectively owe $240 billion, the Moody’s bond-rating service
reports. That debt rose 18 percent, to $145 billion, in the last five years at
public universities, Moody’s says.
Last year
alone, colleges and universities borrowed a record $41.3 billion through
municipal bonds, their principal source of debt funding, the financial
information firm Thomson Reuters reports. That’s up from $28.7 billion a decade
ago.
Consider how
staggering this is. These schools were overbuilt five years ago, and after five
years of falling enrollments, the schools are now borrowing more than ever, to
build more than ever. Our universities have great tax advantages, but, like
everything else, our leaders squandered those advantages, especially at the
public institutions:
Just the interest payments come to the equivalent
of $750 per student per year at public universities, the Berkeley researchers
found, and $1,289 at private colleges.
A real business would probably be paying twice as much interest. I'm amazed just the
interest is more, on a per student basis, than tuition was a few decades ago.
Such huge mismanagement, it saddens me that the idea of clawing back the money
from the scammers who stole it just isn’t on the table…and again I’ll leave it
to the reader to consider why that’s the case.
Even with all the
flags flying saying there’s a major problem here, expenditures on building just
go up and up and up:
Colleges and universities collectively spent $8.4
billion on new construction and renovations from January through August of this
year, up nearly 10 percent over the same period the year before, according
to Dodge Data & Analytics,
The article I’m quoting from highlights a
particular school, one which has lost over half their student base in the last
five years:
But student numbers didn’t rebound. Instead, they
continued to contract, from a peak of 8,339 in 2010 to 4,081 last fall...
For laughs, consider the kind of money
spent to attract more students:
Among other things, it spent $54 million to buy
Honolulu’s iconic Aloha Tower and convert it into an anchor for its downtown
campus by adding dorm rooms, community spaces, a fitness center, and venues for
concerts and lectures.
Do the math here: for the sake of 4,000
students, the university spent $54 million on just that one tower project.
That’s $13,500 per student. The “leaders” could have literally bought a car for every student threatening
to leave. I suspect that would have been far more effective than buying out
a tower and making a bunch of renovations. Heck, they could have used that
money to cover the education costs of
every student—actual costs of education represent about 5% of whatever the
tuition is.
And, instead, they bought some more real
estate and built it up, paying extravagantly to do so. These guys have control
over far too much money considering their extraordinary incompetence.
Now, I’m not brilliant, but I thought of
the “buy everyone a car” and “give everyone free tuition” ideas all on my own,
and I trust the gentle reader will concede both of these ideas would have been
vastly more effective than the demonstrably failed ideas our horribly overpaid
leaders at this school can come up with.
In the face of such gross mismanagement of
funds, I again find myself wondering: why is nobody in a position to do
anything about it willing to stop our “leaders” in higher ed from wasting ever
greater amounts of money?
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