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Joe Guzzardi: The staggeringly large higher education racket

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Posted: Friday, May 8, 2015 9:12 pm

The Higher Education Trust is a Washington, D.C.-based advocacy group that focuses on how to make college educations more affordable, especially for students from low- income families.

As part of its efforts, the organization has mounted a campaign to encourage universities with huge and growing endowments to loosen up the purse strings and use some of their billions to subsidize the ever-increasing tuition for economically struggling students. Last year, UC trustees voted once again to increase tuition.

University endowments are eye-popping. Harvard, a private school, tops the list with $36 billion. Following behind is the public University of Texas system with $25 billion. At some universities, endowments are so high that the ratio of students to endowed funds is astronomical. Princeton University, for example, has an average of $1.9 million per student.

Closer to home, the University of California has endowments of $7.4 billion, up from $5.2 billion in 2005, and ranking it 14th nationwide. All of which raises the question of how UC can justify having more than doubled its in-state tuition to $12,192 in the last decade while administrative salaries have soared.

The obvious disparity between tuition hikes and exorbitant salaries caught the attention of Assemblyman Roger Hernández, D-West Covina, who introduced AB 837 which would limit UC administrators to earning no more than $500,000 annually during a fiscal year. According to Hernández, the UC’s stance on increasing student tuition while at the same time continuing to pay some its staff over $500,000 “is disturbing.”

In Hernández’s analysis of UC’s 2013 calendar year, 387 employees made over $500,000 in total annual salary, with 29 others earning more than $1 million per year. On the other hand, the remainder of the 268,442 UC employees earned an average annual wage of $43,520. According to an investigation conducted by the American Federation of State, County and Municipal Employees total UC spending increased 40 percent between 2007 and 2013, while salaries for UC’s most well-paid administrators increased 270 percent during the same period.

Paul Streitz, founder and director of the College Parent Association and author of “The Great American Tuition Rip-Off,” calls higher education in the U.S. “a gigantic extortion racket,” and calls for colleges to lower tuition and eliminate all student debt with student loan give-backs. In California, the average student debt at the end of 2013 was $20,340.

Streitz argues that universities should lose their nonprofit status, because unlike other nonprofits, there appears to be no guidelines governing how much revenue they can use for overhead or fundraising. As a result, colleges have built art museums, created superfluous departments to deal with non-academic, politically correct issues, given interest-free loans to senior personnel and worst of all, paid them bloated salaries.

Among the solutions Streitz proposes are vigorous organizing by students and parents alike to protest tuition hikes and if imposed, refuse to pay them. And Streitz recommends that at least three parents and three students be voting members of the board of trustees to insure that the university is managed in the best interests of students and not the faculty.

Otherwise, students can expect tuition to increase indefinitely and their debt to steadily deepen until they hit the poor house.

Joe Guzzardi retired from the Lodi Unified School District in 2008. He’s currently a Californians for Population Stabilization senior writing fellow. Reach Joe at joeguzzaardi@capsweb.org.

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