The Importance of Financial Transparency in Higher Education

The opinions expressed in this piece are solely the views of the author and do not necessarily reflect the views of the BU College Democrats at large. 

by Alexander Golob

09-1124-LAWTOUR-132 boston-university-tuitionThis past month, Robert Brown, president of Boston University, issued an email stating a “low,” 3.7% increase in tuition, amounting to $1450. Many students at BU complain, as they generally do when tuition rises, about how high tuition is. The university appeases the complaints of students and their parents by saying that they remain concerned with upholding the academic and financial integrity of the institution. However, there is no way to validate this claim because BU discloses almost none of its finances.While BU is a private nonprofit institution, the university receives so many benefits from the public that the administration should be held accountable for how and where it spends our money.

For one, BU gets one third of its funding, $360 million, from research grants. Ninety percent of this money comes from the national government while the other 10% comes from state and local governments and a few private institutions. BU is also exempt from property taxes, can take loans from banks and government with incredibly low interest rates, and pay taxes with massive deductions. Meanwhile, student loans are also guaranteed by the national government, thus making them another source of money for BU that comes directly from the public.

Through all of this, tuition is growing at unsustainably high levels with little reason. The BU administration says that it raises its tuition by some of the lowest rates among its peer institutions. However, none of the university’s peer institutions already have such high tuition to start with. Increasing 3.7% from a tuition of $20,000 to $20,740 (a $740 increase) is not the same as increasing tuition by $1,570 from $42,400 to $43,970. While BU and other colleges justify high cost with well-paid job opportunities post graduation, the statistics do not backup their claims. Inflation has risen at a cumulative rate of 7.8% from 2008-2013. Average wages from 2007-2011 rose about 6.4% (the numbers for 2012 aren’t out yet). BU’s average tuition rise of 3.8% compounded over 5 years is about 20.5%.

In other words, while inflation has outpaced wage growth, BU’s tuition increases at a rate more than triple average wage growth and almost triple the rate of inflation. Prices are increasing a rate far higher than even medical care. About 60% of Americans have an income below $60,000 – the full cost of BU tuition. While BU does give out student aid, it is often in the form of federal subsidized loans. Again, it is the public, not the university, paying for these significant increases in the price of tuition.

In the past decade, total student debt in the United States has quadrupled from $260 billion to $1 trillion. These debts cannot be defaulted, so they haunt the students for life. This amount of debt leads to an overall slowdown in spending that hurts the lives of each former student and the general economy. All the while, our academics are suffering. Every year, the university employs more and more lower paid and adjunct professors. Even in his most recent letter, President Brown announced cuts in academics while talking about building new facilities.

Although the current political climate sees strong partisan divides on almost every policy, student debt chooses no party. Members on both sides of the aisle face staggering levels of student debt: 22 Democrats and 24 Republicans. The scariest part is that some of these representatives are still paying their student debts back after decades. Making public and private investments in a university more transparent is something that members of both parties can believe in.

We are led to believe that it is alright for us as consumers of university services to have full faith in what we are investing in. We are led to believe that the public investment in universities is warranted. And we are led to believe that we are paying for a strong education and services that will help enrich our personal lives and advance our careers. In reality, we have no idea where that money is going. It is up to students, faculty, and community members to stop this. Only through communal efforts can the speeding trajectory of unsustainable tuition and unbalanced universities be changed.

 

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