Where does a college’s money go?

This essay was prompted by the governor of Wisconsin’s proposal to reduce funding to the University of Wisconsin System by $343 million dollars. This proposal furthers a lasting discussion on the good of college education. Here I’ve tried to gather my thoughts and some facts on what comes from social investment in higher education.

Considering a $300 million cut in funding to the University of Wisconsin system raises two questions: Where is the money currently going? And where would it go if not to the schools? Where money goes in a college can also be thought of literally and figuratively, in terms of budget expenditures and in terms of the output of a university — the things that students get out of college. Both of these are important, though the latter is most often discussed. As for where else the money will go, that’s only something that the people proposing the budget cut can truly answer.

As for where a university literally spends the money it receives, a recent statement by Duke University can help shed light on this part of the issue. For Duke University, about 68% of tuition money goes to paying for the operations of the university, which includes people who work at the university, professors, administrators, staff, etc. If this holds true for all money spent by a university, the half of all of the money is being spent on paying people; people who pay taxes in the state, people who buy from businesses in the state; basically people who support the economy of the state. A $300 million cut in state funding of the University of Wisconsin system could very well mean removing $204 million from the local economy that is realized in the form of mortgage payments, rent, car payments, utilities, groceries, and a large number of normal and luxury goods. When you take money away from a university, you also take away money from every business used by the employees of the university.

As for the other 32% of Duke’s budget expenditures, 8% is categorized as “all other activity”, which could mean things like marketing and funding student groups, which can range from community service, to academic groups, to intracollegiate athletic programs that are not part of the NCAA. The remaining 24% of the university’s budget is spent on financial aid. This financial aid money is the money that disappears, so to speak; the money that is only accounted for by the figurative output of a university. The money that goes into financial aid can only be beneficial to a state in terms of what a graduate produces as a participant in the economy after graduation.

It is when we think of college graduates as participants in the economy that arguments often get heated. Questions are raised like “what will she do with a degree in history?” or “what will he do with a degree in art?” The remainder of this essay attempts to address this aspect of the issue; to look at how college graduates are able to participate in an economy by looking at what students get out of college. Some people see college as job training.

In thinking of college as job training, we must admit that we live in an age of specialization. With the exception of many service industry and retail jobs, there are few jobs that a person can get and be proficient at with less than a day or two of training. Every company is specialized in its own way. So unless specific college classes or degrees are dedicated to training students to work at a specific company, we must think of college as job training more like teaching students to be able to be easily trained by a company. Taking computer science as an example, four years is not enough time to teach a person to be fluent in every programming language nevertheless every application of every language so as to make that person qualified for any programming job at any company. It is thus a given that every company will need to do on the job training to some extent.

At this point, then, a college degree is proof of a person’s ability to follow through on a long-term project — that is, four years of studying to get a degree. Likewise it establishes a base knowledge in a certain area — for example, computer science — such that an employer can look at the degree and know that the applicant has the capability of learning the company’s system and performing the duties of a given job.

In terms of degrees like history and literature and other “Liberal Arts”, we need to consider why people get these degrees. One reason is to teach it on the elementary and high school level. I don’t think anyone will deny that is valuable, which means we still need people getting general backgrounds in math, physics, chemistry, biology, history, literature, fitness, music, and art. And if you disagree about the last three, think back to grade and high school, think if you ever took a fitness, music, or art class, and if you ever liked them, or appreciated having that time away from the other classes you might not have enjoyed.

Another reason people study Liberal Arts is out of a desire to become experts in a subject, and these experts go on to research and to teach future college students. Some of these experts will teach future teachers, or future engineers that are also interested in pottery. Some of these experts will write books that will literally reshape how we understand our world. Some of these experts will appear on TV shows, in documentaries, in courtrooms, and in other places where someone with a wealth of information on a single topic are needed.

These sorts of students who get degrees as proof of ability or to teach others are rarely those that spark debate. Rather it is the students who graduate without specific job prospects, without specific ways to contribute to an economy, that get people riled up.

Instead of getting a degree so they can participate in an economy, some people get certain degrees because the subjects are things the person is passionate about. She loves religious studies, or he loves literature. For some, college is the opportunity to pursue interests or fulfil a dream, and we should all be so lucky. If these students are willing to take on the debt or if their parents are willing to pay for it, those are their decisions to make.

And finally, there’s plenty of college students who wind up getting a degree in a subject, because they had no idea what else they wanted to study. In fact, they probably don’t really even want to study the thing they got that degree in, but they were told by their parents that they had to go to college, or they saw the statistics on how the median salary of people with a bachelor’s degree is almost double that of someone with just a high school diploma , or they just felt an enormous social pressure from plenty of people talking about how more Americans should go to college.

Statistically, it doesn’t really matter if the person making lattes at the neighborhood coffee shop has a degree in literature, if the person fixing bikes at the local bike shop has a degree in photography, or the person delivering a packages has a degree in chemistry. For one thing, they are living and working and paying taxes in your state, supporting your economy and contributing your future social security check. Furthermore, the average person has 15 different jobs in their lifetime these days, so we can logically conclude that they won’t be working that job for even the next year. In fact, at some point, they’ll probably be getting a job that pays $57,000 per year just because they have a college degree. Now even if that’s a degree in cultural studies, and that person’s first out-of-college job is waiting tables, it would make sense to try and keep that person living in your state.

So the necessary questions we must also ask when we ponder the decision to cut funding to public universities include the following: Do you want to support people getting job specific training? Do you want to support people getting the background to working at companies with unique systems? Do you want to support people getting advanced degrees to do research and teach future college students? Do you want to support people following their dreams or simply trying to get their life together?

If you don’t want to support any of these things in your state, then where else will the money go? This is the question that those proposing the budget can answer. Is it going back into the taxpayer’s pockets by way of tax cuts or is it being put into another government program? Ultimately, that’s the next question that must be answered: If the money is not going to education, then where is it going?