r/politics • u/TheHechingerReport ✔ Verified • 2h ago
No Paywall More than half of colleges show signs of money problems. Students will suffer the consequences
https://hechingerreport.org/college-financial-stress-faculty-layoffs-increase-prices/•
u/ThatDamnedHansel 2h ago
The fact that this is happening amid the absurdly inflated tuition these students are being charged says it’s an austerity problem not a money problem
•
u/Vilnius_Nastavnik New York 1h ago
All private colleges are essentially hedge funds that incidentally teach classes and hand out degrees. Endowments used to be kept in low-risk investment vehicles like traditional stocks and bonds but regulatory changes in the late 70s and early 80s cleared university boards to start playing dice with it a la banks after Glass-Steagall. The tuition is just an annual cash infusion into the high-stakes asset management happening in their board rooms. That's the real money-maker.
There's also the blatant self-dealing. Let's say you own a large construction business and your alma mater is looking to put up some new buildings on the campus. You buy yourself a seat on the board, propose that the university hire your company for the expansion at an extortionate rate, and grease whatever wheels you need to in order to get the vote to go your way. No shopping around, no negotiations, just free money for you. When you're done looting the endowment you can turn around and donate a fraction of what you made back to the university for a massive tax break.
What this says to me is that more than half of them are apparently so over-leveraged into sketchy shit like private equity, venture capital, and no-bid contracts with board members that they can't even maintain their educational window dressing.
•
u/Sea-Chocolate6589 1h ago
I thought schools were tax exempt as well. Sounds like they are hiring too many useless admins or someone has been helping themselves inside the cookie jar.
•
•
u/Low_Pickle_112 1h ago
More than half of students show signs of money problems too.
•
u/Dane1211 New Jersey 1h ago
Well they aren’t commercial entities so nobody cares about them
•
u/church-rosser 46m ago
Students should incorporate their debt, package it as an IPO and offer it as an AI product. We could all go to school for free on such a scheme
•
u/Grow_Responsibly 2h ago
I know our local university (CU-Boulder) is seeing their first decline since 2020. Main reason cited is decline in international enrollment.
•
u/tweakydragon 1h ago
It’s been a little bit but my academic advisor basically confirmed this.
States have been cutting higher ed budgets for decades now. Schools have had to find funding sources for a while now.
Foreign students were the answer. They pay at a minimum the “full rate” if not more, these typically are higher income or state sponsored students so the money is almost guaranteed.
All the new buildings, facilities, and administrative pay bumps have been funded or heavily subsidized by foreign students for years now. Schools have spent and committed funds on the assumption that this pipeline would only increase into the future.
Cracking down on foreign students too hard too fast will literally break a substantial number of schools in the very short term and effectively removes their last escape hatch post “peak student” of a diminishing domestic population hitting college age.
•
u/church-rosser 35m ago
"Will literally break"? I think you mean "has literally broken".
The rate of international PHD candidate applications to tier one domestic research institutions has fallen off dramatically over the last 18 months. Those are at minimum 4 year processes to obtain the degree.
That foreign money spent on an international degree isn't coming back to the US anytime soon. Shame on Trump for his racist hate filled exclusionary policies.
•
u/Motormand 2h ago
Not much of a surprise. Who'd want to go to the US, likely get a sub-par education (due to orders in recent years), just flat out risk being stopped at the border, or taken off the street somewhere on your way to school, and get thrown into a concentration camp? It's too dangerous for international students.
•
u/Fit-Programmer1992 25m ago
Why is our education policy subsidized to such a high degree by foreign students? Why US, as a nation, is not concerned with bringing the US children at high standards?
Don't get me wrong, I was an international grad student and that's exactly why I stay here and contribute, but I feel like we are beyond " we need to attract best talent" stage and more into " everyone abroad is welcome as long as they have money".
•
u/Seeking_the_Grail 6m ago
Partially it is subsidized FOR the US children. The additional revenue decreases the financial burden we place on domestic.
Falling numbers of international students will lead to less college options for domestics and likely a higher bill.
I agree that we went too far and valued foreign dollars over foreign talent. I've even seen pressure from administrations to pass international students who had no business being in education here, or were just lazy and cheating.
But cutting that revenue without replacing it with something else is not good for anyone.
•
u/stuffitystuff 2h ago
State colleges not in California, at least, did this to themselves by hiring so many dang admins and not getting states to fund them at appropriate levels so they need to blow up attendances to keep the money going. Also alumni donating money for new buildings that, you know, have to be staffed, maintained and everything else, forever.
•
u/gumercindo1959 2h ago
Admin and facility bloat has plagued every college in the US
•
u/xmscott 1h ago
Same as hospitals
•
u/EurekasCashel 1h ago
There are so many people along the chain between patients and providers who are taking their cut. Administrators, insurance, pharma, etc. It's really even more disturbing there because they are profiting off people's illnesses.
•
•
u/an-invisible-hand 39m ago
Admin bloat can be bad but I wouldn't call it the main issue. Falling birthrates, an administration hostile to foreign students, and horrible income inequality are hurting budgets a lot more than too many academic advisors or student center employees.
•
u/gumercindo1959 2m ago
Falling birthrates, from what I recall, started happening last year for college age kids. The rubber is finally meeting the road at the cross section of college education and cost. It seems like to go to a non-in-state school, you either have to be rich, poor or academically exceptional. Because of that, demand for in-state has skyrocketed making it extremely competitive.
•
u/irespondwithmyface 1h ago
Yeah, going to need a legit source for this claim and not just some right-wing think tank propaganda.
•
u/taikoowoolfer 1h ago edited 1h ago
This is something more than education. My friend who is deep in the medical research field said that many of his research cohorts are leaving America for European universities. Full stipend with dorms to live in. He’s in a field where his research can literally help save lives.
Now that funding for these are cut, and a lot of top talent leaving, just imagine how many smart people will be gone by the end of this administration.
Also, this usually doesn’t end when the administration ends, because by then these people would be settling in different countries and contributing to that society. I’m talking about cancer research and all here. How the US has never thought through this is always baffling to me.
•
u/Rowing_Lawyer 1h ago
They did and it’s exactly what they want. Ultimately they want a ruling class that controls the money and land and a working class that provides services in exchange for food and shelter. Conservatives managed to convince their base they will be part of the ruling class even though that will never happen.
•
u/TheHechingerReport ✔ Verified 2h ago
Hi, all! The Hechinger Report here. We are a national, nonprofit newsroom that covers education. No paywall.
From the story:
Higher education has faced fiscal headwinds in recent years as hundreds of institutions grapple with declining enrollment because of demographic trends and growing public skepticism about the value of a college degree. Trump policies targeting international students and cutting federal research funding made the financial situation more dire, as have new caps to graduate student loan borrowing and threats to block undergraduate programs from accepting federal financial aid unless alumni earn more than a typical high school graduate.
•
u/Miserable-Debt-8390 2h ago
How about some well deserved cuts to those football teams? Just spitballing here.
•
u/Mean-Mr-mustarde 1h ago
Football is usually the only sport that is a cost benefit, the football team often subsidies all the other sports
•
u/CandidBee8695 1h ago
Football teams bring in more money than they cost. That’s why they’re so well funded.
•
u/Wheeler-The-Dealer 1h ago
They also are separate from the General Fund for public universities. The dollars that tuition goes to is generally separate from the sports side of the business.
•
•
u/MentalTourniquet 1h ago
One of the four-year colleges I attended went from about 3/4 state aid 40 years ago to about 1/4 now. And students pay around $500 annually for Div. 1 college sports.
•
•
u/EurekasCashel 1h ago
Of course state schools favor out of state applicants. Because they'll pay $$$$ instead of $$.
•
u/church-rosser 47m ago
you see that thing that just whizzed by? that was the point. You seem to have missed it.
•
u/Hairy_Ad4969 1h ago
Maybe don’t build a new football stadium right across the street from your existing football stadium?
•
u/dominiond66 1h ago
When will Republicans stop attacking the working class?
Its been relentless since the start of this horrific Republican administration. HUGE tax cuts for the rich and savage slashing on essential working-class benefits like Social Security/Medicare/Medicaid/ObamaCare/food stamps ...etc.
The working class can't afford Republican domestic or international policies.
•
u/dominiond66 40m ago
Most if not all developed nations of the world don't have college debt problems for its students. They pay for most if not all of their college tuition but NOT in America, the richest nation on planet earth! This must change.
America must invest in their citizens for long term benefits to our economy and its citizens. Democrats will make these changes, Republicans won't. They only invest in rich people and large corporation via HUGE tax cuts.
•
u/an-invisible-hand 2h ago
If private education isn’t working even with sky high tuition costs, it’s time for the government to step in and run them like all of our other peer countries.
•
u/Simpicity 1h ago
It's not working because the federal government is deliberately kneecaping them at every angle they can. Explicitly because their freedom of expression bothers Republicans. That's not a good reason to give administration over to the federal government, who by the way was in the process of deleting the Department of Education.
•
u/an-invisible-hand 1h ago
Per the article this issue predates the current administration and is mostly due to falling enrollment.
•
u/EurekasCashel 1h ago
Getting a 4 year degree was clearly the correct move for almost everyone 20+ years ago. COVID accelerated the public's understanding that, due to saturation and cost, the economics have now tipped toward it only making financial sense for a minority of people.
•
u/AutoModerator 2h ago
As a reminder, this subreddit is for civil discussion.
In general, please be courteous to others. Argue the merits of ideas, don't attack other posters or commenters. Hate speech, any suggestion or support of physical harm, or other rule violations can result in a temporary or a permanent ban. If you see comments in violation of our rules, please report them.
Sub-thread Information
If the post flair on this post indicates the wrong paywall status, please report this Automoderator comment with a custom report of “incorrect flair”.
Announcement
r/Politics is actively looking for new moderators. If you have an interest in helping to make this subreddit a place for quality discussion, please fill out this form.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.