Athletics and Debt Driving up Virginia College Costs

jlarc_highered2There are two broad conclusions worth noting from the Joint Legislative Audit and Review Commission’s meaty new report on higher education costs:

  1. Spending increases at public Virginia colleges and universities have been led by auxiliary enterprises, primarily athletic programs, not the academic programs funded by the state. Athletic programs consume on average 12% of tuition and fees.
  2. Virginia colleges have borrowed heavily to finance expansion of auxiliary facilities. Institutional debt now averages $1,330 per student, although the number varies widely between institutions.

The information could not be more timely, coming as it does on the heels of a plea from the Virginia Business Higher Education Council for more state funding. (See “University Coalition Bereft of New Thinking.”) Colleges routinely blame the decline in state funding for soaring tuition and fees.

While a decline in state financial support certainly contributed to the surge in the cost of college tuition and fees, JLARC concluded that the cost increases were greatest in “auxiliary enterprises,” a range of services that include intercollegiate athletics, student housing, student dining and campus recreation. In theory, these enterprises are expected to be self-supporting.  In fact, they are increasingly supported by mandatory student fees. States the report:

Between 2001 and 2011, auxiliary enterprise spending (per student, adjusted for inflation) was the largest single contributor to spending increases at Virginia’s institutions. … As of 2011-12, 65% of the total price of higher education paid by a typical freshman student in Virginia was for non-academic services.

largest_contributors

Graphic credit: JLARC. (Click for more legible image.)

Running up the score. Athletic programs are among the worst offenders. “No Virginia program generates enough athletic revenue to cover all its expenses,” JLARC says. To supplement ticket sales, contributions and endowments, broadcast rights and royalties, universities depend upon mandatory student athletic fees. “Twelve percent on average of what Virginia students paid in tuition and fees in 2012-13 was for intercollegiate athletics.”

Virginia’s 15 higher education institutions collectively field 280 sports teams; the 6,100 students on those teams account for only three percent of all students. States JLARC:

Athletic spending at most Virginia schools has increased more than the NCAA divisional median rates of growth. … Students interviewed by JLARC staff stated that they would be willing to scale back athletics if that meant reducing the price to attend college. Although not common practice, some schools in Virginia and nationwide have decided to reduce or maintain the scope of their athletic program to keep costs down.

Graphic credit: (JLARC. Click for more legible image.)

Graphic credit: JLARC. (Click for more legible image.)

Another form of student debt. Virginia higher ed institutions have loaded up about $3.5 billion in debt on 207 auxiliary enterprises, according to JLARC. That debt, most of it for student housing, is funded by state-issued bonds, and the cost is passed on to students through higher fees, $1,330 on average,  nearly double the level of of FY 2005. Institutional debt service averaged seven percent of total charges to students. Much of that debt was incurred to accommodate expanded enrollments.

A call for transparency. JLARC recommendations: (1) Colleges should post the amount of the athletic fee on their websites’ tuition and fees information pages;  (2) universities also should devise a standard way of calculating and publishing their fees; and (3) university boards should charge directly for more student services in place of mandatory fees.

7 Responses to Athletics and Debt Driving up Virginia College Costs

  1. I am lost on the sports fee issue. Why wouldn’t each team have to find its own funding? Any team generating a surplus (I am guessing football and basketball usually) donates that surplus to the other teams. They divvy up the surplus. Any shortfall must be made up by the teams themselves. Why should the average student be charged for Women’s field hockey or Men’s water polo. With all due regard to the athletes in those sports (and I know one person involved in each sport) – they are playing for their own pleasure. I think that’s great. I also think they should find the funds to pay for those sports.

    Why is this even an issue? I guess that’s where I am lost.

  2. There is a simple way to end this outrage. Until this is ended, no public funding. Period. Higher education is for intellectual pursuits not to provide content for ESPN. College athletics have gotten totally out of hand. If you want to be informed about the real values of the NCAA do a little reading on the “Johnny Football”incident at A and M. Make them professional and make them pay their own way.

  3. depending on one’s point of view – and the “transparency” or “NOT” of the sports programs revenues and costs – one might conclude – as DJ did that:

    1. – football and basketball generate revenues in excess of costs

    2. – but not enough to pay for the other sports so “activity” fees on all students
    essentially pay for those other sports – not the “surplus” from football/b-ball.

    I need to go read the JLARC report but my suspects are that trying to get to that level of transparency is going to be futile.

    I’m not a fan of College Sports. I think it perverts the institution but I acknowledge that I’m likely in the minority and that higher ed can make a good case that their “brand” is enhanced by their participation in the “name” sports.

    I have the same attitude towards high school athletics. I think it’s a “cost” that helps drive up school costs.

    There are colleges and even Universities who make their reputations on academics alone – not sports. There are even k-12 schools that do that – they are often “charter” schools and private schools where “sports” is of the inter-mural variety.

    I’m not opposed to sports at all – until it becomes a cancer on academics and the costs of providing academics.

    I congratulate Jim Bacon for taking the issue on.

    so my question is – does big time football/basket ball actually not only pay for itself but providing enough revenues to pay for other sports?

    and if it does – what are the student activity fees for?

  4. Thank you Jim. THIS IS THE SMOKING GUN.

    Look at that those numbers in that chart, particularly the research institutions. Incredible. Everybody is stuck in one mode: waste money on student fluff and elite athletics (for alums), and professors’ and administrators’ pet overhead, and cut everything else, most particularly teaching students, or anything else giving them a worthwhile education.

    What should happen is an boycott of all Alumni giving until this is fixed. Fat Change. Most Alumni appear brain dead as regards any need to educate their children. Keep feeding the Alums ever more Beer, Barbeque, and Footfall, Basketball and Lacrosse, and they’ll happy donate for more.

    The boards and councils meanwhile use taxpayer dollars to keep the rest of the money machine spinning so as to keep raising tuition so as to keep feeding the beast. And no one has the slightest notion as to whether anyone, save for an exceptional few, are getting an any education at all.

    Amazing!

  5. I think people – Alumni, students and taxpayers WANT big time sports at Va colleges myself. It’s want people want.

    Perhaps there are polls but many students and parents pick a school that has a Sports “brand”.

  6. You have, no doubt, pointed out the costs of the programs and yes, the costs are shared by all students, regardless if they compete in sports or go to games. But so are parking fees, building fees, technology fees, etc regardless if they participate. Is there any value? Putting football and basketball aside and the drive for ESPN/Fox/NBC dollars, I suggest that you may want to talk to collegiate athletes that competed in the non-revenue sports. For many, they gained valuable skills during competition that provide benefits after graduation. Examples are http://www.theresumator.com/blog/reasons-why-hiring-college-athletes-makes-sense/
    http://udini.proquest.com/view/the-recruitment-and-hiring-of-pqid:1850816541/

    Transparency is good. Each institution should question the fees that are put on the students. Should all Va institutions strive to be Division 1? There is value to some students who compete and that should be considered in addition to the costs.

    Sports are a big business in our economy and for many the path to being a coach, a sports marketer, an announcer, a sports nutritionist, an agent, an athletic director, or a designer of sports apparel is playing the game. Maybe we should have a College of Athletics in each school.

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