Universities Deserve Extra Credit For Financial Mess
As the economy continues to droop more than Cloris Leachman’s bosom, the news media has taken particular satisfaction in finding creative new ways to express just how screwed we are.
Jim Cramer is running “Mad Money” like a high school football game – with an ambulance on the sideline. And CNBC is considering replacing anchors’ teleprompters and mics with car batteries and cattle prods.
Things are bad, but maybe this paradox is the biggest gloom and doom bombshell we’ve heard yet: The very would-be saviors of this big financial mess have blood on their hands, too. A lot.
America’s higher education industry comprises the hired guns charged with leading the next generation of CEOs, CFOs, hedge fund managers and financial planners. But they can’t even right their own financial ship. In fact, our higher ed leaders are further floundering and foundering the collective economic woes of Johnny Lunchbox and Susie Homemaker.
Here are a few fun facts to illustrate this downward spiral:
• College tuition has risen more than 439 percent in 25 years while the average median family income has only risen 137 percent. And there is no extra grant money to offset this discrepancy.
• According to the National Center for Public Policy and Higher Education, 49 states flunk at how well they serve the public. Oh, there is good news: California passes…with a ‘C.’
• Universities built overflowing endowment coffers by investing in private enterprise. But now they can’t shed these investments to increase needed, on-hand capital. According to a report by Cogent Partners, universities were getting $1.04 on the dollar for every buck of investment they looked to sell off a year ago. Now they’re getting 50 cents.
Just an awful, awful effort by the leaders of our so-called higher education movement.
And some of the colleges that have lost the most of their prized endowments feature the nation’s premier business schools: Harvard, Duke and the University of Virginia. (No, we’re not just talking about the Rutgers of the world.)
Now these esteemed institutions are no different than Joe Middleclass, who hocks his grandma’s wedding ring in the pawn shop on the other side of town. And if they want to keep leading by example, they need to come up with some new examples for our best and brightest students. Otherwise, the banker on the Monopoly board game boxtop has more credibility than college boards and business school deans.
