College costs soar in race to impress

Some school officials say parents and students can find part of the reason for soaring college costs in a place they might not think to look: In the mirror.

From that new computer lab and the new engineering building to the swank basketball arena and the fancy fitness center, colleges and universities in South Carolina and across the country are in an arms race to have the newest, the biggest and the best – all to impress potential students who are deciding where they will spend their college years and their money.

“They’re not just looking at desks and library books and laptop computers,” said David Shi, who retired last year as president of Furman University. “They’re looking at dining halls and swimming pools and climbing walls. They expect a college to be a country club.

“And many of us have felt the need to give them the answer they want. If you don’t, they notice it.”

Increasingly, however, there are pleas for colleges and universities to control their rising costs.

U.S. Education Secretary Arne Duncan made an urgent plea last week for colleges and universities to contain their tuition and other costs, which have soared in recent years. Also, a significant part of the Occupy Wall Street movement, which has reached Columbia and cities across the country, is made up of students who are dismayed by the crushing debt they took on to pay for college.

That frustration is not likely to be eased anytime soon, however, school officials say.

Not only is there that arms race, but another set of factors — the rising cost of energy, retirement benefits, health care and intercollegiate athletics — are pushing college costs higher. Also, there are specific challenges for small schools, who tout small classroom sizes and individual attention as the reason that students should choose them.

Coker College, for example, is proud of its 10-to-1 student-to-faculty ratio.

Robert Wyatt, president at Coker College, said his Hartsville school invests heavily to make sure that ratio can be maintained. “That’s not a cheap proposition,” Wyatt said. “We take the position that you get what you pay for.”

Blame state government?

S.C. students must be getting a lot. College costs are higher in the Palmetto State than they are anywhere else in the South — by far.

A recent report from the libertarian S.C. Policy Council slammed S.C. higher education for being inefficient, expensive and bloated with high-cost administrators.

The S.C. Commission on Higher Education fired back, issuing a rebuttal that said the council’s study was misleading and overly simplistic.

“The accusation that the state universities are spending too much money on administration and not enough on instruction is not a fair criticism, and it’s not a simple analysis to make,” commission chairman Ken Wingate said.

Wingate said he understands criticism of the increasing cost of college, but he added the loss of state funding is a crucial factor.

As the state has given less money to higher education, schools have raised tuition.

Adjusted for inflation, public appropriations for public, four-year college operating costs were cut by nearly 38 percent in South Carolina from 2007-08 to 2010-11, according to figures from the Southern Regional Education Board. That drop was bigger than the reductions in any other state that has a Southeastern Conference school.

Education Board figures also show the median annual, in-state tuition at public, four-year colleges and universities in South Carolina was $8,760 in 2009-10. No other state with an SEC school had a median annual tuition figure that was anywhere close to $8,760. (Kentucky, where in-state students at public, four-year schools paid $6,552, was second on the list.) Adjusted for inflation, the South Carolina tuition figure was up by 26.3 percent from 2004-05.

Health care, utility, retirement costs soar

Shi and other school officials say there are other factors at play as well.

Personnel is the largest single cost for most schools, Shi said. And health-care costs are a big part of those personnel costs.

So, when health-care costs triple from 1990 to 2008, as the U.S. Centers for Medicare and Medicare Services says they did, schools see their personnel costs rise sharply too.

Employee health insurance at the University of South Carolina’s Columbia campus and its School of Medicine cost $22.9 million in fiscal year 2011, according to USC’s budget office. That’s up almost 25 percent from 2006.

From 2006 to 2011, health insurance costs increased by 27 percent across the entire USC system.

Utility costs are another big reason for rising college costs.

Utilities cost USC-Columbia and its School of Medicine $24.2 million in fiscal year 2011. That figure was up by 14.2 percent from 2006.

Across the entire USC system, the cost of utilities rose to $29.8 million in fiscal year 2011 from $25.1 million in fiscal year 2006, an increase of 18.6 percent.

Then, there are technology costs.

Students expect to be able to take their lap-top computers anywhere on campus and wirelessly connect to the Internet. Purchasing, maintaining and repairing computer systems isn’t cheap, either.

Information-technology costs at USC-Columbia and the USC School of Medicine were $39 million in fiscal year 2011, an increase of just under 10 percent from 2006. Across the system, IT costs were $43 million in 2011, also up about 10 percent from fiscal year 2006.

Colleges and universities also say they are not shielded from the cost of aging.

Retirement expenditures at USC-Columbia and the USC School of Medicine were $45 million in 2011, up about 45 percent from fiscal year 2006. The entire USC system had $54.7 million in retirement expenditures in fiscal year 2011, a boost of about 46 percent from fiscal year 2006.

No reward for holding the line?

Intercollegiate athletics are another big cost driver, said Shi, who described those costs as “out of control.”

It is a myth that successful athletics programs rain dollars down on a school.

“Very few institutions actually produce net revenue from intercollegiate athletics,” said Shi, who was a football star during his undergraduate years at Furman.

University of South Carolina President Harris Pastides has described athletics as a “lubricant” that can smooth the flow of dollars from donor to school.

Shi agreed. “That becomes the litmus test to judge your pride in your university,” Shi said. “It’s not how the English department or the chemistry department is doing. It’s who won on Saturday.”

Even with its warts, Shi said the current higher education model is not likely to be changed on a large scale.

Few schools, he said, would be willing to be the first to tell students they won’t have access to a nice fitness center, a new science building or a tricked-out computer lab.

“For a single campus to step out and decide they’re not going to play the game, there could be crushing consequences,” Shi said. “Consumers are not going to reward them for their bravery.”