The dean I speak of unfortunately left the school over a year or two ago citing (very quietly--if at all) political changes at the institution too cumbersome (and idiotic, if you ask me) to overcome. I realized after reading about the episode that higher education is just as susceptible to the fallacies of human organization as say, for-profit constructs are.
I know what you're thinking... no $hit Sherlock. Forgive my connotation of being naive. I'm not, I just didn't realize the depth of pettiness in the administration (I know professors are like a bunch of fourteen year-olds vying for the attention of Justin Bieber--err--The New England Journal of Whatever).
The point I'm making is that I think at their core schools are companies providing a service. And they have serious customer service and value proposition challenges ahead of them. The graduate school I just withdrew from is a very large Catholic institution in the Twin Cities (I was seeking a business masters). I went to a small Lutheran school for my undergraduate degree.
For the sake of financial comparison, just consider the recent funding initiative at the Catholic school. They received an anonymous $25 Million matching program grant. They have almost completed fulfilling it and achieving the $50 Million in fund-raising. At last count their endowment was in the $400-$750 Million range. That extra $50 Million cherry is literally the size of my undergraduate institution's entire endowment.
Kudos to the Catholic school for cranking out countless local business leaders. Bad on my old college for producing a disproportionate number of nurses, teachers, and ministers. They're nearing broke every year with just a pittance of donation activity.
Here's the funny part that seems to get me. There is little to no reasonable financial aid available to business graduate students at the Catholic school. My tuition was closing in on $2,500 a course. The expectation of course, is you work for one of the myriad Fortune 500 companies in Minnesota and they're paying for your tuition (or partially at least, as in my case).
If you are one of those students who is jobless or works for an organization that doesn't support your higher education goals, then you take loans in the HOPE that you will earn a higher wage later and pay it off. One aside note, word to the wise, networking opportunities in a part-time program are a joke. Who wants to get chatty after a nine hour work day and then staring down a three hour class?
Back to my argument... where is all the interest off the endowment going to? Why are the school's graduate programs still so tuition-driven? Simple answer, it costs stupid amounts of money to keep an educational institution operating, even nine months out of the year! Professors aren't even making that much. I don;t know how you reduce those costs. It's like the healthcare Rubik's cube.
New buildings, upgrades, renovations, new computer equipment, additional faculty to handle additional students, etc. all adds up. And that's the rub, that's the part that educational institutions are going to need to unlock the secrets of in the coming years: creating growth. These organizations are no different than any company, each year it needs to make its marks whether it be 1% or 10%. How do you grow an organization designed to sustain and only grow after the needs arise? Well, you jack tuition.
And in the case of business schools you can. And that frankly gets on my nerves because everyone is getting a tax deal. Especially given the incestuous relationships organizations like Target and the Carlson School of Management have.
This leads me to my final and last point: tax the ever-loving crap out of business school tuition at the institution's income statement level. It's simple, the money they earn is tax-sheltered from the companies aiding their student-employees (to the tune of $5,250 per student for reimbursing companies federally). The students, for their portion paid, get one of three tax-credits available to them.
You're probably thinking something along the lines of why? These are educational institutions and enjoy their 501(c) status with the IRS (tax-exempt). Well, yes, they are, but what do the business schools (I am isolating my argument to a graduate level) do other than act as a powerful source of easy-money for these institutions and crank out degrees that only enhance for-profit entities' employee experience bases and increase salary expenses? Graduate business schools make and beget money down the line. They are not, frankly, altruistic institutions in this regard. They are cash cows.
If business school graduate tuition were taxed as ordinary revenue for an educational institution, might an institution have to take into consideration offering more robust programs in the sciences and applied-liberal arts? Two areas where a dearth of graduates is making itself apparent (have you read an internal corporate email lately?).
It boils down to this: stop it with the business schools guys. You're diluting the workforce with people who aimlessly use buzzwords and find themselves at odds with the knowledge that has already been made extinct in the private market and it's creating salary pressure that is unsustainable for median-household and middle class growth.
Perhaps I'm barking up the wrong tree. They will probably just pass on the new taxes in the form of a tuition hike.
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