Academic Gold Rush

When children can support themselves, they generally leave their parents’ home. When state colleges and universities can do the same, they find it difficult to leave the nest of taxpayer-subsidized state and federal supports.

“Ours is an economy of scarcity,” Gary A. Olson writes in The Chronicle of Higher Education. “Even well-endowed institutions find themselves in a constant struggle to find enough money to do everything that they want to do.”

“That economy of scarcity extends to salaries: Most academics and administrators are not compensated at the level that their education, skills, and experience would garner in business and industry.” Olson serves as dean of the College of Arts and Sciences at Illinois State University.

Actually:

1.) Most colleges and universities, despite their employees’ aversion to capitalism, have substantial stock market portfolios far in excess of their most lavish expenses.

2.) Most college professors have more job security than the parents who entrust their children to the academics’ care.

“Dozens of academic institutions, even small colleges, have endowments of at least $1 billion, despite losses following the burst of the dot-com bubble,” Mark B. Schneider writes in The Chronicle. “Because colleges and universities see a generous endowment as a top priority, endowments have grown faster than budgets.” Schneider is an associate professor of physics at Grinnell College in Iowa.

As Dr. Schneider indicates, it is not just the Yales and Harvards that have enviable portfolios. So do some notable state universities, whose resident scholars perpetually warn of cuts in government funding whether such reductions are imminent or not.

Market Portfolios

UC Oakland $7.6 billion

USCLA $2.7 billion

U Michigan(Ann Arbor) $5.1 billion

Ohio State $1.7 billion

UNC Chapel Hill $1.4 billion

Penn State $1.1 billion

UT Austin $11.6 billion

Source: The Chronicle of Higher Education

At the same time, “State spending on student financial aid rose by more than 8 percent in the 2004-5 academic year, amid signs that efforts by states to expand financial assistance may be catching up with the growth in public college tuition,” Karin Fischer writes in The Chronicle. “The 50 states, the District of Columbia and Puerto Rico awarded a total of $7.9 billion in grants and scholarships in 2004-5, up from $7.3 billion the previous year, according to a report to be released this week by the National Association of State Student Grant and Aid Programs, or NASSGAP.”

“The rate of increase picked up from 2003-4, when state spending on student aid rose by just 6 percent.” You can play an interesting mix-and-match-game by breaking out the individual states that the schools with the billion-dollar market portfolios are in to compare what is spent on student aid by taxpayers with what is hoarded by colleges and universities in futures.

State spending on student aid

California $757 million

Michigan $250 million

N. C. $242 million

Ohio $240 million

PA $403 million

Texas $458 million

Source: The Chronicle of Higher Education

Not too surprisingly, with this level of support, college professors do not fare too badly, especially vis-a`-vis the parents and taxpayers who support them, although these academics may not see it that way. Controversial Ethnic Studies professor Ward Churchill, for example, still managed to pull down six figures a year even while he was being “disciplined” by the University of Colorado at Boulder.

“Think about what life was like for working-class people in American in the 1950s, of the kind of economic security that people had,” The New Republic’s Peter Beinart noted in a lecture at Harvard last year. “This is something that we may never be able to get back to.”

“Somebody quipped that the average blue-collar worker in a union, in the 1950s, had the kind of economic security that today we only associate with college professors.” Apparently, the passion for social justice that most professors profess 24-7 crowds out any guilt that they may have about living at the expense of people with more physically demanding, even dangerous, jobs—troops in Iraq, for example.

Malcolm A. Kline is the executive director of Accuracy in Academia.