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Colleges Paying the Price for Expensive Facilities

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By now everyone has heard the statistic that American students and graduates owe more than $1 trillion on student loans. But while everyone knows what these students did with their loans, it’s far less clear what the colleges are doing with all this money.

In his new book College (Un)bound, Jeffrey Selingo took a closer look at college spending and found that while some of the money is being spent on academics, a good deal of it goes toward massively expensive yet completely unnecessary facilities meant to lure students. In an interview with NPR’s Morning Edition, he said:

“College now, today, has many jobs, right, and one of the jobs is maturing students and giving them kind of a comfortable place to live while they’re going to school for four years. And so now we see, you know, these palatial dorms that have been built on many campuses — they have their own private bedroom and they share a kitchen and, you know, you go into a dining hall now and you have sushi in the dining hall. You have climbing walls, which I think everybody has, but now you even have these lazy rivers where you can get in an inner tube and go down. […]

“Well, they … [improved facilities] in the last decade when enrollment was going up, when money was free-flowing, you know. Most parents were using their homes as ATMs to pay for college, because of the housing market. And now suddenly those bills are coming due, and the problem is that the students are either not there or they’re unwilling to pay the money to fund those things.”

This is a problem we’ve seen before. Due to the abundance of easily-available governmet loans, colleges have had little reason to compete on price, instead choosing to lure students through expensive projects like those seen in the video above. But we’re starting to see early signs that students are becoming more sensitive to price, which could spell trouble for schools that invested heavily in white elephant projects like these.

In addition to the points about frivolous college spending, the interview hits on a number of other themes we’ve discussed here at length, including the rise of MOOCs, the challenges facing many liberal arts colleges, and the appeal of programs that reward students for what they learn rather than how long they spend sitting in classrooms:

“This idea of competency-based education, which I think is perhaps the most disruptive force potentially entering higher education — so, right now we measure learning by time spent in a seat. They test you on the way in, they see what you know, and you basically focus on what you don’t know. What I think the disruption will be is that some students could finish in 2 1/2 years. There’s nothing really magic about 120 credits in four years. It’s just tradition.”

The interview is filled with interesting observations like this, and is worth listening to in its entirety. Listen to the full broadcast here.

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  • wigwag

    Not only are these palatial university gym and health facilities white elephants, they’re taxpayer subsidized ripoffs of students. How about eschewing all the frills and lowering tuition? Who needs them anyway? In New York, you can join a Bally’s health club for $29.00 per month.

  • Anthony

    Colleges and Universities have viewed themselves as part of PublicTrust able to withstand change enveloping its product/mission; post 2008 disruption and disintermediation has brought on new reality but the world of higher education can be intransigent (perhaps at its own reckoning).

  • Lorenz Gude

    I remember arriving at Columbia in the fall of 1960 and there was considerable talk about the new student building. The ground floor was glass through which you could see the very Bauhaus student lounge. I got something out of it the night I heard some very abstract music being played there and realized that the music and the architecture were strongly related. But basically it was an architectural showpiece that left me unmoved and was an unattractive place to sit and study. There were pool tables in the basement. So I used it a few times but my main reaction was: So what? I am amused to learn that universities have been going hog wild with this sort of nonsense.

  • larryj8

    “But while everyone knows what these students did with their loans, it’s far less clear what the colleges are doing with all this money.”
    I’m not so sure we know what those students did with their loans. How many of them used student loans to finance spring break in Mexico, smart phones and other non-education related expenses? I suspect the number is quite large.

  • Jim Luebke

    I can’t help but be reminded of the Old Man of the Mountain, who had his recruits drugged and shown visions of paradise, to get them to obey him without question.

    The Credentialed Elite seems to be pursuing a variation on the same tactics, making college into one long party to make its indoctrination appealing.

    MOOCs can’t come online fast enough, to replace our rotten system.

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