More non-profit greed

This is one of my all time favorite quotes. I had this poster on my wall in the Army and someone took it down. I never knew who but i assumed it had to due with the last line referring to the "US as a malfunctioning corporation"

 

Well, how about student loan cohort default rates ? Do you feel that tax status has anything to do with things like that ?

Superficially, one might suppose that there is in fact some relationship, based on the US Dept. of Education's most recent (fiscal year 2008) data.

Average Cohort Default Rates for Fiscal Year 2008:

Public non-profit institutions: 9.7 %
Private non-profit institutions: 6.8 %
Private for-profit institutions: 22.3 %

The for-profits accounted for 10% of enrollments, yet 47% of defaults.

I see. So in this case, for example, I can HOPE that there is not a for-profit education bubble fueled by taxpayer-subsidized loans that many borrowers will be unable to repay.

But just because I hope this is true, doesn't necessarily mean that it IS true.

 

Try as I might, I can't keep up. Are we hating the greedy non-profits or the greedy for-profits? I missed a few days......

 

Editorial: With pay hike, has CSU gone fully tone-deaf?

Excellent points.

Editorial: With pay hike, has CSU gone fully tone-deaf? - Sacramento Opinion - Sacramento Editorial | Sacramento Bee

Also, bear in mind that the $400,000K does not include exclusive housing, vehicle, etc. This probably adds another $50-100K to this deal.

Time to cut starting from the top, not just the bottom.

Abner

 

Great question! I'm still smiling.

I'm just hating greed in general and making the point that it goes beyond tax status.

Others, it seems, to some confusion I agree, seem to be saying that greed is okay if you have the right tax status.

I think we need a board psychiatrist, I would be more than happy to nominate you if you like..

 

Hmm some anonymous person with the handle CalDog trying to shake me off of CSU....

I'm not going to engage here with this change the subject strategy. Pretty funny really, what are we going to do, keep looking for some statistic that you can point to to get us talking about it instead of the article I posted?

You tried already and we found that not only were you mixing apples and oranges, but the apples were rotten and we discovered that CSU is operating at a $3.6 billion dollar a year deficit. This is about CSU, not something else. Start another thread if you want to compare statistics about other topics.

I did some math and at CSU's 2009 operating level they just lost $68k in the one minute it took me to write this...

I'm not mad at you I honestly really don't understand what point you are trying to make in relationship to this thread...

 

Another article

And another one:

Michael Moodian: CSU trustees reckless with tax money | state, salary, president - Opinion - The Orange County Register

I like this quote by Brown:

"I fear your approach to compensation is setting a pattern for public service that we cannot afford." In responding to the assertion that Hirshman's salary was in line with the salaries of other university presidents around the country, Brown said, "The assumption is that you cannot find a qualified man or woman to lead the university unless paid twice that of the chief justice of the United States. I reject this notion."


Abner

 

Absolutely repulsive. Education administrators were never meant to make this kind of money. Our economy can't survive with them making that kind of money. There is something grossly wrong with a system that pays an educational administrator this much money on the federal aid dime.

 

LOL! I decline! I decline!

 

The Original Poster brought up the "high" compensation of the CSU president, at ~ $400,000 per year.

I simply pointed out that the compensation of CSU administrators is extremely low compared to the compensation of many for-profit university administrators, such as that of Andrew Clark of Bridgepoint Education at around $20,000,000 per year.

No one has challenged the accuracy of my numbers. The only criticism has been the claim that this is an "apples to oranges" comparison, since Clark is a CEO, not a college president.

OK, fine. But if you don't like that comparison, then feel free to compare Clark's compensation to that of any other administrator in the CSU system. You should have plenty of options, since CSU is the largest public university system in the US. But you will still come to exactly the same conclusion.

Of course it's an apples-to-orange comparison -- because no one in the CSU system is reaping the kind of bucks that for-profit execs make. That's the point.

There are valid concerns regarding the funding of the CSU system (as with most other public university systems in the country right now). However, it's not because CSU administrators are overcompensated relative to those of other schools.

 

I knew we could agree on something!

 

I brought up cohort default rates because I believe that they are a reasonable indicator of a program's overall educational value. If a particular program or school has high default rates, then there are grounds for questioning whether the program deserves a taxpayer subsidy.

By that measure, San Diego State University -- which was the subject of your news article -- is doing rather well. According to College Navigator, the default rate for Fiscal Year 2008 was only 1.8 %, which is quite low (it may have gone up since then, but FY2008 was the most recent year in College Navigator). You can criticize the finances of SDSU or the CSU system generally, but their graduates are doing well enough to pay back what they borrow, which certainly suggests that they are getting a decent return on their investment.

In contrast, many for-profits have double-digit default rates -- for example, Ashford's was 13.3 % in FY2008, meaning that more than 1 of 8 Ashford students were in default on their loans (again, this number may be higher now). Is an Ashford degree an equally good investment? If not, then why do Ashford administrators get the bigger bucks (e.g. tens of millions) ?

No, cohort default rates are now being looked at pretty seriously. And not just by me. Really.

 

In this case, the CSU President knew that he was signing up to be a public servant. You sacrifice higher pay for stability. This is the path he chose.

These top level positions are sometimes short careers, but end up with life long hefty pensions and other perks (that are not offered to rank and file employees) that are not mentioned in this article. In short, I don't feel to sorry for him.

Abner

 

Okay got it, thanks for the insights. You believe that a school in a system (CSU) with low FSA default rates is justified in losing over three billion dollars ($3B+++++) of the state’s taxpayers’ dollars every year to support their operating deficit.

Moreover, you believe that they are justified in arbitrarily raising the pay for a campus president by $100k, which cost the state taxpayers another $100k because they have no other way to pay for it.

All of this in a state that is already bankrupt and has been laying off state workers, reducing their pay to minimum wage, and so on.

Yep, you and I do disagree.

 

From a political standpoint, the $100,000 raise was obviously poorly timed. In fact, one response has been bills in the state legislature to restrict such raises in the CSU system.

But from a market standpoint, the new SDSU president's salary is not particularly high relative to those of other university administrators -- and is downright trivial relative to the compensation enjoyed by many for-profit executives.

Actually the CSU system would be thrilled to get $3 billion. They were at that level a few years ago, but are down to only $2.1 billion in the latest budget.

Sure, the CSU system loses billions of dollars for the state. So do the elementary schools, the roads, the prisons, and the highway patrol. Essential services aren't free.

You might argue that the state-subsidized university education is not an "essential service", because it could be handled by the private, for-profit sector. But in reality, the for-profits can't duplicate many of CSU's essential functions. For example, the production of engineers is essential to the California economy -- and some 40% of all engineers in California were trained by the CSU system.

For comparison, the number of professional (= ABET-accredited) engineering degrees delivered nationwide by the for-profit sector is approximately zero. The for-profit sector isn't interested in engineering programs: they require lots of expensive equipment, and only a relatively small percentage of the population has the math/science interest/skills to get through them. The for-profits want to deliver cheap education to broad masses, not expensive education to narrow niches.

So engineering education requires some kind of subsidy, which is why most engineers are trained at state universities (some are trained at private non-profits, but they are relatively small in number, and are still subsidized in other ways). The only alternative that the for-profit educational system has to offer is no engineers at all.

 

Here's another example: pre-medical education.

Consider the University of Phoenix. It's the largest educational entity in the US, even larger than the CSU system. It has hundreds of campuses, about a half-million students, and has been immensely profitable.

Yet despite all of its resources, the vast UoP system does not offer a single course in organic chemistry. You can't meet basic pre-medical requirements as a UoP student (unless you take supplementary courses at some other school).

So UoP is not interesting in preparing undergraduates for medical school. It wouldn't be profitable.

But somebody still has to do it.

 

CalDog, having a conversation with you is difficult because you are all over the board; flinging anything you can to distract attention from the main argument. That is fine but it makes it difficult to engage in an actual dialog.

What I take away from your many argument statistics and directions is that you believe the CSU system should be benchmarked against Ashford and the University of Phoenix. Really? That seems like an odd defensive position to me if you really think CSU is a good school.

I cannot tell if you actually know anything about CSU, or if you are just doing Google searches to find convenient facts. Given that you are all over the board, I tend to lean to Google but I honestly do not know. IMHO, the CSU system is one of the most fragmented and inefficient state institutions in the country, and they appear to me to be a financial and administrative disaster. This is from first hand interaction not internet search.

Do you work there, is that why you feel so invested in them? CSU cannot service the number of students they need to, and each campus is run as a little mini-empire, often times competing with themselves. To raise tuition so much and pay a public servant and additional $100k, for no good reason, in these economic times, and given the condition of the state’s economics, is irresponsible. Period.

The CSU system has been squeezing their workers, taking away benefits and lowering pay. How many jobs could have been saved, or family benefits offered for the $100k?

All this other mumbo jumbo arguments, valid in their own context or not, does no change this fact. Saying that bad is okay because worse exists is not a valid argument. Bad is bad, period. Irresponsible is irresponsible, period.

I think you are a reasonable person, and a reasonable person should see this.

 

You see, this is one of those things that irks about all the negative attention being directed at the for-profit schools lately. It's not as if there aren't public institutions doing equally bad or worse things.

I keep hearing the mantra in Cali of "you should attend a recognized school like CSU"-- a mantra which gets harder to subscribe to every second when there's another mention about how impacted they are or how they're about to hike tuition yet again. How are you supposed to plan financially for a degree program with them knowing that any moment they could have a meeting and hike up tuition another 5-10%? And given the quality of some of their programs I've heard about of late, how do you know you're going to get your money's worth for all that cash (not to mention time) you're plunking down?

 

Exactly, as a native Californian, I don't hear good things about the CSU system (here in CA) due to overcrowded class rooms (they even have students standing up in the back of rooms, or crowded around the hallways). Teachers and rank and file employees have been cut to the bone, lay offs have occured, and concessions like paying much more into pensions and healthcare while receiving no raises have strained the environment. The new Prez is going to have a hard time leading his masses. This raise thing does not sit well here. It is the talk of the town, and people ARE NOT HAPPY.

CSU just put a huge spotlight on themselves. They would do best to heed Governor Brown's advice.

Talk later, I gotta roll to Home Depot!

Hasta!

Abner :smile:

 

No, I am happy to return to your main argument. Your main argument is that a CSU administrator received an annual raise of $100,000 during a budgetary crisis, and that this represents "non-profit greed".

Well, maybe you're right -- certainly the timing was bad. However, my initial response -- which still stands -- is that "non-profit greed" seems like small potatoes compared to "for-profit greed". As an example, I cited a for-profit school exec who received annual compensation of $20,000,000.

If an extra $100,000 seems excessive to you, then what about $20,000,000 ? It's a straightforward question, but you have yet to address it. That's fine, but it makes it difficult to engage in actual dialogue.

But I am not saying that bad is OK. I am saying that there are different degrees of bad, different degrees of irresponsibility, and different degrees of greed. There is greed, and then there is GREED.

A university administrator wangling a $100,000 raise may be greed -- but when one cashes in on $20,000,000, that's GREED.

Agreed ?