What’s College good for, anyway?

December 29, 2010 at 7:24 am 16 comments

Stuck inside in the New York snowstorm, our new Dean, Zvi Galil, is doing lots of reading and sending links out to the faculty.  They make for a pretty depressing view of the high costs of higher education and how little society is getting for that cost.

Let’s start with Jonathan Cole’s blog, which agrees with Rich DeMillo that research costs universities much more than it brings in:

When the federal government entered into an informal contract with universities after World War II to outsource our national research effort to the universities, it agreed to cover the full overhead costs of that research. Overhead consists of the cost of paying for laboratory facilities and the work at the university that is directly linked to the government sponsored research. Under Congressional pressure, the idea of full-cost reimbursement was violated almost before the principle was adopted. Today, the government negotiates reimbursement rates for research conducted at university laboratories.3 Government auditors “live” at the universities and their hands are held by a group of administrative personnel whose specialty is to negotiate indirect cost rates on government contracts and grants. I don’t know of any university today that receives close to full-cost reimbursement for government-sponsored research – some of which leads to discoveries that have completely altered out lives. So, contrary to widespread belief, the research enterprise actually costs more money than it generates at major universities. The result is that either through gifts to the university or through tuition, research is being subsidized at these great universities. It may be what makes great universities preeminent but it is not contributing to a positive bottom line.

So why should so many universities engage in research? One answer is graduate education. Research is how we train new PhD’s. The Economist this week speaks to how a PhD is good for the University but not for the student:

PhD graduates do at least earn more than those with a bachelor’s degree. A study in the Journal of Higher Education Policy and Management by Bernard Casey shows that British men with a bachelor’s degree earn 14% more than those who could have gone to university but chose not to. The earnings premium for a PhD is 26%. But the premium for a master’s degree, which can be accomplished in as little as one year, is almost as high, at 23%. In some subjects the premium for a PhD vanishes entirely. PhDs in maths and computing, social sciences and languages earn no more than those with master’s degrees. The premium for a PhD is actually smaller than for a master’s degree in engineering and technology, architecture and education. Only in medicine, other sciences, and business and financial studies is it high enough to be worthwhile. Over all subjects, a PhD commands only a 3% premium over a master’s degree.

So, Universities cost a lot, in part because tuition and state dollars are subsidizing research, in order to produce PhD’s, which is probably not a great choice for the individual. At least we’re doing well by the undergrads, right? According to Jack Kelly, most of the undergrads shouldn’t be there and aren’t going to get their money’s worth.

About 70 percent of high school graduates start college, but barely half earn a degree within the traditional four years. And many who do get a degree only can find jobs for which college is not necessary. According to the Bureau of Labor Statistics, of the 49.37 million college graduates who had jobs in 2008, 17.4 million were working in occupations requiring less than a bachelor’s degree.

For instance, 29.8 percent of flight attendants had college degrees. So did 24.5 percent of retail salespersons, 17.4 percent of bellhops, 16.6 percent of secretaries,15.2 percent of taxi drivers, and 13.9 percent of mail carriers.

The proportion of Americans who attend college has increased dramatically in the last 20 years. But, according to Ohio University economics professor Richard Vedder, director of the Center for College Affordability and Productivity, 60 percent of the increase since 1992 worked in low skill jobs, some of which don’t even require a high school diploma.

This is “the single most scandalous statistic in higher education,” Dr. Vedder said.

I sympathize with the concerns of the critics. As a professor at a research-intensive university, there are enormous pressures to take on more and more research, through graduate students, research scientists, and post-docs. I am expected to play more of a manager role, and I am given a light teaching load so that I can focus on building that research portfolio. My personal preference is to do research more hands-on, and I like teaching very much, especially with classes smaller than 50. I expect that many professors would like to focus more on their teaching with small classes, and to focus on a small number of research projects. But that’s not how the economics work out for higher education today.  As the murmur to reform higher education grows to a roar, maybe those economics will be changing.

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16 Comments Add your own

  • 1. Ian Bogost  |  December 29, 2010 at 11:38 am

    I expect that many professors would like to focus more on their teaching with small classes, and to focus on a small number of research projects. But that’s not how the economics work out for higher education today.

    Only at R1 institutions. What you describe above is exactly how things work at liberal arts colleges. Of course, from a student’s perspective, most of those cost $40k a year, don’t they.

    • 2. Mark Guzdial  |  December 29, 2010 at 12:35 pm

      Of course, you’re right, Ian.

  • 3. Mark Urban-Lurain  |  December 29, 2010 at 1:41 pm


    Good post (emperor’s clothing and all.)

    There is strong research evidence that Ian’s comment represents an idealized vision, rather than reality. See for example:

    Fairweather, J. Beyond the Rhetoric: Trends in the Relative Value of Teaching and Research in Faculty Salaries. Journal of Higher Education 76 (2005): 401-422. DOI: 10.1353/jhe.2005.0027

    Not only has the trend been for higher rewards for scholarship (research) over teaching, but those trends are present across all institutional types, including 4 year “teaching” schools. According to Fairweather’s analysis of national data, for every hour / week that a faculty member in an R1 school spends on classroom activity, the salary decreases by $758/year. (Table 6, pg 417)

    The numbers are not as bad for liberal arts schools but the trend is discouraging. In 1992-3, every hour of classroom time decreased salary by $138; by 1998-9, that had increased to a $474 penalty.

    As the title suggests, it is time to move beyond rhetoric and put our money where our mouths are. Who makes T&P decisions in YOUR institution and will they step up and change the reward structure? I’m not holding my breath.


    • 4. Mark Guzdial  |  December 29, 2010 at 2:24 pm

      Those are frightening statistics, Mark!
      Combine that with the trend that Rich DeMillo has been describing of teaching institutions becoming more

      • 5. Mark Urban-Lurain  |  December 29, 2010 at 3:03 pm

        These phenomena are interesting in that they appear not to be “rational” when looked at from a big picture, but are rational for the individual actors. The tragedy of the commons (http://en.wikipedia.org/wiki/Tragedy_of_the_commons)

        For example, DeMillio’s stance that research is a money loser may be true, but the decisions are made by individuals for whom that is not the case (faculty who get raises & T&P; Dean’s who encourage it, etc.) Rankings and status are determined by peers who look to these factors, even if they “cost” more than they produce financially.

        Of course, suggest that bean counters should be making scholarly decisions and see what happens 🙂


    • 6. Ian Bogost  |  December 29, 2010 at 2:58 pm

      Mark, what does average faculty salary have to do with the observation that there are institutions where teaching is on a higher footing and research on a lower one?

      Besides, we all know the financial reward structure has nothing to do with research or teaching, but only threatening to leave or being a jackass so they’ll throw money at you to shut you up. I’m totally serious.

      • 7. Mark Urban-Lurain  |  December 29, 2010 at 3:12 pm


        The point of Fairweather’s article is that it refutes the belief that there are institutions where teaching is rewarded more than research (statistically speaking, not that there may not be some individual institutions where that is true, but over a large national database, it is NOT true.)

        Of course, one might argue that higher pay does not mean that the activities for which that pay is being allocated are not truly valued, but I am skeptical.

        As for threatening to leave, how many excellent teachers do you actually know that get more money by threatening to take their excellent teaching elsewhere? For a faculty member who is an excellent teacher, how would other institutions even know about it to recruit that person?


        • 8. Mark Guzdial  |  December 29, 2010 at 4:57 pm

          Mark, where is Fairweather getting his data about hours per week spent on instruction? If it’s self-report, I would worry that faculty may not be measuring accurately their time spent on instruction–the salary differences may actually reflect self-perception of effort. In any case, I wonder how visible those hours per week are to those who set salaries.

          • 9. Mark Urban-Lurain  |  December 29, 2010 at 5:53 pm

            The data were collected as part of a larger national survey; Jim simply did an analysis of it:

            Quoting from p 404 of the Fairweather article:

            “I used the 1998–1999 National Survey of Postsecondary Faculty
            (NSOPF-99), sponsored by the National Center for Education Statistics,
            to examine the current relationships between teaching, research, and
            faculty pay. I compared results with findings from the 1992–1993 survey
            (NSOPF-93). This article focuses on the 6,482 and 10,626 full-time,
            tenure-track faculty in 4-year colleges and universities responding to the
            survey in 1998–1999 and 1992–1993, respectively. The respective individual
            faculty response rates were 92% and 87%. Weights were calculated
            so that the statistical estimates would represent the population of
            faculty within the universe of 4-year institutions.”

      • 10. Mark Guzdial  |  December 29, 2010 at 5:03 pm

        I’m sorry that I’m not being too clear, responding via iPad while on I-75. You’re right that I was over-generalizing research-focused institutions when I referred to higher education in my post. But if more teaching institutions are trying to look like research institutions, then those criticisms are applying across more institutions. Mark’s data (from Fairweather) are concerning to me because I think economists are right that you get the behavior that is rewarded.

        My experience with tenure and promotion is limited, but in that experience, research is rewarded. I don’t know of data that suggests that more generally it’s the loudmouths that get rewarded.

  • 11. Confused  |  December 29, 2010 at 2:58 pm

    I don’t understand…

    As an undergrad, I was at a liberal arts teaching school (zero grad students). Our professors were there because they wanted to teach and it really showed (my professors were amazing). After spending another 5 years at an R1 for grad school, I was completely floored. Teaching undergraduates was NOT a priority for the faculty but instead a menial task and it really showed. Of course, I understand the importance of research, but it’s currently acting as a parasite and leaching the life/blood from undergraduate education. It’s stealing resources and faculty time/attention from the undergraduates. Many undergraduates are barely able to come up with the required tuition and this how we spend it?

    If we could start from scratch, shouldn’t these be two completely separate institutions? Undergraduate teaching in one and graduate research in another? Imagine a school for undergrads where all of the faculty are devoted to teaching. Or a place where research faculty get to spend all of their time on research and working with their graduate students.

    What am I not getting here? Can academic research not exist outside of its current parasitic form?

    I understand that I’m being overly idealistic, but the problems that I see seem to be getting worse. More research-heavy tenure requirements and fewer faculty getting granted tenure with the teaching slack being picked up by underpaid adjuncts and TAs. What’s happening here? Why must these two institutions be joined? Is a reward structure for excellence in teaching really the best that we can do?

    • 12. gasstationwithoutpumps  |  December 30, 2010 at 11:36 am

      The state of California tried to do something like that with their 3-tier state system: University of California for graduate education and the top 12.5% of undergrads, California State for the top half of undergrads (no grad programs), and community colleges (no bachelor degrees) for everyone. Tuition was initially extremely low at all, but has grown enormously in UC and moderately at Cal State.

      The Cal state schools have also add grad programs: mainly masters programs in education and in engineering disciplines.

      Although all the UC schools are top-tier research institutes, they don’t all have the same ratios of grad to undergrad education. UCSF is purely a grad school (actually, mainly a hospital with a strong research component and a tiny amount of education) while UCSC is over 90% undergrad education. The disparity in salaries in the UC system matches what Mark reported: salaries are much lower at UCSC despite comparable quality of research. Even within a single campus, there is a strong negative correlation between time spent teaching and salary.

  • 13. Mike Stiber  |  December 30, 2010 at 12:41 pm

    I think the information presented in this post illustrates well the fallacies of generalization, in particular, regarding the supposed negative net cash flow from research and the high cost of college education. It may be the case that research efforts cost some institutions money, but I would suggest that the mere fact that administrators strongly encourage faculty research, and that faculty are rewarded monetarily for such, contradicts the assertion that research costs the institution money.

    Regarding the cost of higher education, at many public institutions, costs have been remarkably flat over decades, if you take into account both tuition and (declining) state allocations.

    Finally, I am struck by the implication that the purpose of higher education is merely related to one’s career — that there is something wrong with 29.8% of flight attendants having college degrees. I believe that some might argue that a college degree has more value to the individual and society than just the job it delivers at the end. Perhaps instead we should be outraged that more than 70% of flight attendants don’t have college degrees?

    • 14. Mark Guzdial  |  December 30, 2010 at 5:09 pm

      Mike, aren’t you assuming that administrators only make decisions that take into account the bottom line? The articles I cite suggest that administrators are much more concerned with prestige, rankings, and academic rigor, and are not good at considering costs. If so, they might easily be making decisions that enhance rigor but cost money.

      I don’t think that the purpose of a college education is merely related to career. But given the costs of higher education, not considering the cost implications and possibility of paying back student loans is foolhardy.

      • 15. Mike Stiber  |  December 30, 2010 at 7:41 pm

        Perhaps I am an administrative child of the current era, but it’s hard for me to imagine someone making a decision to underwrite research from other sources, primarily because (at least at public institutions) tuition plus state funding barely cover educational costs. My observation has been quite the opposite; for example, the ability to hire part-time faculty for more than one course’s teaching load from the resources associated with a single course buyout from a tenure-line faculty member.

        So, yes, this is not a one-dimensional decision space, and prestige, etc. are elements in it. But I would argue that prestige et al. derive from the resources that flow to the institution from research activities. I don’t see many places with large buckets of spare cash around for use in subsidizing research. Perhaps that is the case at Georgia Tech? ;^) In fact, I would like to dispute the fundamental assumption that the cost of college education has grown faster than inflation, but maybe the University of Washington is unique in having a total cost that has been relatively flat for more than a decade? Or have we completely bifurcated higher education in the US, with the realities for public and private institutions being radically different?

  • […] blogged previously here about the obsession with research (mostly in science) in Universities and how that twists budgets and perceptions.  This article points out that, while Universities desperately need Science, Science actually […]


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