I don't think it would concern me greatly.

First, the base was about 1mn; on what measure did she earn the delta? Was it from the U., or outside activity or royalties or such? (oh and btw, go girls!!!)

Is the tuition higher as a result? Seriously doubt it? Is the endowment low? Prob. not.

I think markets are pretty efficient. I bet she is superlative.

I'd send my kid there and say you figure out and work on what you need to do to end up in that job.

There is so much ridiculousness in terms on consumer awareness and being ripped off in higher education.

Our DD goes to the University of Texas, where the chancellor makes nearly $800K and the President makes nearly $700K (do we truly even NEED both positions?!?!). But more to the point, the football coach makes $5 million. That wasn't a typo. And the coach has a number of assistants who make $500K to $700K. I'm not ignorant as to the revenue football brings in, the other sports it supports etc. I still think it's larceny to pay fb coaches that much money.When you add to this the number of professors at many schools who rarely teach (and will tell you they are actually paid to research and publish), the widespread difficulty of graduating in 4 years owing to limited sections of required classes, the mandatory purchases of books that will in fact never be used, grrrrr..... I think we get so wrapped up in the ''higher calling' aspect of education that we don't demand our rights as consumers, and so this goes on and on. When you are selecting a school, there is so much to consider, most of it more relevant to your child's future (strength of the program, etc.), that I think it is idealistic to think you could select a college based on which one rips off more people with a high president's salary.

Probably before I would send my kid to a school paying $250-$300K in speaking fees for one speech.

Colleges are totally out of control with their spending on everything. I think it is because the ease of obtaining student loans (even for useless degrees) has driven the cost of tuition to unsustainable levels.

Schools can charge what they want, because parents and kids will pay it, and they'll pay it because they can get credit and no one explains to these 18 year olds just how much they are going to have to pay.

Beagles makes a good point.

A friend of mine recently drew an analogy to the housing market. Just like in housing, we have decided that a college degree is a good idea for every single person, and we have driven up the cost of them by lending huge amounts to every single person to obtain that degree on credit, without regard to whether or not they can repay it.

Yes, owning a house is a good thing for a lot of people, and so is a college degree. But neither are the best choice for 100% of the population at any cost.

Most of the money she received in 2012-2013 was a retention bonus that was vested over 10 years to keep her in the position, and paid out in a lump sum. They renewed the deal for another 10 years for a payment of "about the same size," according to the Times.

College tuition has increased in leaps and bounds, surpassing increases in virtually every other sector of the economy over the past 20 years. There's been a backlash of public opinion over this, especially in view of the student loan problems, and growth in tuition this year has slowed dramatically. Still, the chart linked to below (US News and World Report) shows the profound difference between the rate of increase of tuition and sectors like apparel, housing and medical care.

When we were looking at colleges for our last child I became increasingly disturbed at the staff to student ratios. Firstly, they are misleading as averages since class size varies with the type and level of class. Freshmen at some institutions---who arguably need the smallest classes---have some of the largest classes and some senior seminars at DD's school had five students. Secondly, why is it that schools boast about having more employees than actually may be needed? At one school there were 25 professors and staff in the drama department, according to their website. When we visited DS asked if that was the correct number, and when the reply was affirmative he asked how many students at the moment had declared majors in drama. His was idle curiosity, but we were both stunned to find out that there were only 50 students in the department---and that included both majors and minors. As we left, DS remarked that it was not surprising that the tuition was close to $56k per year. I started wondering then about the explosive tuition growth and just what was driving it.

As far as the "market" for the college product, Mtn., I think it is broken in the same way that the medical services market is broken. The cost of the thing does not necessarily reflect it's success or utility, and since the end user is generally ignorant of the actual costs, they aren't making informed decisions.

I don't doubt that Dr. Jackson is a brilliant physicist and a wonderful administrator. But over a six year period from 2007-2008 to 2012-2013 (during that 10 year vesting for the retention pay) tuition rose at Rensslaer by more than 25%.

Rensslaer is a very fine school and is less expensive than many other colleges. It's the subject here because this news came out in the New York Times today and I have used this example to bring up the subject of the cost of college in general.

Here is a link that might be useful: The Rise in College Tuition (Chart from US News)

But,and I haven't looked at the figures, so I am just guessing here, with rising income inequality, the value of an education has probably gone up even more than the cost.

It seems as though we have created an economy where it is very hard to be middle class without a college degree (and not even easy with one!).

The efficient market hypothesis died an ignominious death in 2008. It almost took all of us with it.

The comparison to the housing market is apt: education is also fueled by completely unsustainable levels of debt. Schools compete for this borrowed money with fancy student residences, showy social centers, and lavish gyms. It's the educational equivalent of granite countertops.

Meanwhile, the roof is leaking. I encourage everyone with kids in college to read more about adjunct professors. These are the people who overwhelmingly are the ones who do the actual undergraduate teaching. Not only are they not tenured, they are not tenured track, and are not even real employees. They are essentially contractors, living on whatever classes they happen to pick up in a given semester. Next semester, they could get half as many, or none. Many would earn more per hour, for their very long hours, as cashiers. These are the people to whom you have actually entrusted your child's education.

So if colleges aren't spending your money on teachers, where is it going? Part of it goes to those fancy dorm rooms. But most goes into that mysterious bucket called "Administration." That's right. University presidents. And the swelling ranks of Vice Presidents and all sorts of fancy titles. You're paying more money for tuition because these people are taking it.

But they must be worth it, right? People don't earn what they're worth. They earn what they can negotiate. Every academic study of CEOs over the past three decades has shown that compensation is not correlated with performance. The company does well, they get rich. The company goes bankrupt, they get rich. Performance doesn't matter. What does matter are the interlocking compensation committees--I'll approve your pay, you approve mine--plus search firms vested in higher pay plus big mutual fund company shareholders who hope to sell 401(k) programs to the CEO after applauding his paycheck. And on and on.

Same thing with college presidents. We're all panicked about falling behind global competition. Maybe we should note that the foreign university presidents and med school deans who are kicking our fannies earn less than their equivalent counterparts do here.

These big salaries don't drop out of the sky. They come out of your pocket. It's your choice whether to pay them or not. It won't change until you change it.

I went looking for answers to your supposition, mtnrd, and you will NEVER believe this very interesting list linked below. Some of the most expensive schools have low ROIs.

Of course Harvey Mudd's ROI is stellar. I have known one person who attended that school and he was exceptional.

"The granite countertops of education" .... I wish I had said that Marcolo.

{{!gwi}}

Here is a link that might be useful: College Education Value Rankings 2013

This post was edited by kswl on Mon, Dec 8, 14 at 20:28

I wasn't arguing about any given college, KSWL, but about college as a monolith. I have long enjoyed teasing my double ivy colleagues about my ROI.

The NBER recently published a working paper on helicopter parenting, which I thought was an odd topic to the NBER, but the gist as I understand it was that parents are going mental over education because income inequality does make education more valuable.

Hey Marcolo, no one ever said it was "perfectly" efficient, and what fun would that be? A few oops here and there. Don't hold a grudge. ; )

A timely related article:
In an effort to open up lending to more low-income and first time home buyers, Fannie Mae and Freddie Mac announced Monday that they will start backing mortgages with down payments of as little as 3% of the home's price...."

"The new loans will only be doled out to those who buy private mortgage insurance, have a credit score of at least 620 and offer complete documentation of their income, assets and job status."

Seems like this will work out well...

Penn State's president ranks fourth in highest compensated university presidents.. She replaced Graham Spanier ( president under the Jerry Sandusky scandal). He was removed from office and placed on administrative leave (paid). His total compensation package is over eight hundred thousand a year. I think that is absurd.

Hmmmm...probably not. But mostly because our kids wanted city schools and did not want to be in Troy, NY.

http://qz.com/307595/the-highest-paid-private-college-president-in-the-us-runs-a-small-obscure-polytechnic/

RCI is not a choice that I see from recent grads of our local HS. I would not call in obscure, at least not on the east coast. It is probably the right fit for some kids:
From their website:
"Estimated Cost of Attendance: $64,194"
They accept 42% of applicants.

I would think they give merit scholarships and plenty of financial aid to fill their seats.

For anyone who missed it, a very interesting (and heartening) article on college acceptance rates.

Here is a link that might be useful: college acceptance

One of the key things for students and parents to look at is ROI on major. For example, there are waaaayyyy more dramatic arts graduates than this country's entertainment industry can support. Look at what starting and median salaries in the field are, and look at the TOTAL job openings for professions correlating for that major.

One of my friends graduated from a highly esteemed university with a Ph.D. in Victorian literature. The year she got her Ph.D., there was ONE job opening in the country for someone in her field. It went to a dear friend of hers.

Just a comment sparked by Jane's thoughts on ROI. A university education is not intended to be a trade school certificate, or a guarantee of matching up each student with a specific job. Some fields-engineering comes to mind-generally result in employment easily and lucratively obtained but the purpose of a university degree is to produce an educated citizen of the world, a person whose analytical and reasoning skills have been honed and whose ability to make sense of the environment in which s/he lives is vastly improved over the point at which s/he matriculated as a freshman.

Which is to say that in the theoretical halls of ivy, the degree in Victorian literature, or philosophy, or underwater basket weaving is equally as valuable and purpose-driven as the computer engineers, pre-medical baccalaureates and accounting grads.

Ok, have at me now...I can take it :).

Ann

Running, That is true.

However, for several generations now, in our country, a university education has been linked to upward mobility ... so much so that people forget that this was not always the purpose! NYTimes did a fascinating piece on how education became synonymous with economic success over this particular point in history, ... wish I could find it (it was in the magazine several years ago).

That said, most people cannot afford 50k+ per yr to study something for the sole purpose of enlightenment. I think of majors like Victorian Lit. as reserved for trust funds kids, dynastic wealth, or the fortunate few who can happily lead lives of penury for their art. Or, they are majors undertaken as undergrad by kids who go to excellent schools, and who know they can do post grad in a marketable field anywhere they'd like.

But for the vast majority of students, who, on top of it, borrow to fund their studies, they need to select a major that does, indeed, give them a good ROI.

I did see that article on acceptance rates, Mtnrdredux. Our family has ridden on that college application merry go round three times now and from empirical knowledge realized long ago that those published acceptance rates are utter bunk. Our daughter (the scientific one) maximized her acceptances by applying to 22 schools plotted out by geography, contacts and major programs. (We didn't encourage that or even know she was doing it; she was at boarding school and sent them out all on her own.) at the other end of the spectrum, our DS1 applied to only one school.

There's a place for everyone who wants to go, often though at a ridiculous cost that is fueled by salaries that are IMO not earned.

$50k a year is an awful lot of money to spend on a trade school. Especially when all the skills taught will be very shortly out of date. Oh, you learned Java, LOL. It's Ruby now. This is especially true now that talent is hired by HR search engines. If you don't have the exact keywords required, you don't even exist. No one will ever see your name.

Fact is, while businesses push the agenda that others should pay for all their specific on the job training for them,the reality is that this kind of education tends to lead to very short careers. I've known so many people who were hot hot hot when they graduated--and then they were not. Without a good grounding in essential common knowledge and the fundamentals of critical thinking, they had no ability to adapt.