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The One-Percent on Campus

The increasing cost of obtaining an education was highlighted when President Obama revealed his latest budget on February 13, 2012.  According to the Bureau of Labor Statistics, in recent years college tuition has gone up at roughly twice the rate of inflation.

Addressing this issue in a speech at the University of Michigan on the Friday before he released his budget the President said:  “You can’t assume you’ll just jack up tuition every single year.  If you can’t stop tuition going up, your funding from taxpayers will go down.”

Among other parts of his proposals vis a vis tuition issues, the President suggested tying the amount the federal government gives to universities to their tuition policies.  Of course, tuition policies vary from institution to institution but it can be useful to examine how at least one state university has responded to the decreasing support from the state legislature and increasing tuition costs.In the past four years in-state tuition at the University of Colorado has increased between 8.8 and 9.3 percent each year.  For the upcoming year the university administration proposes a $1,203 increase of in-state full-time student tuition which would be an increase of almost 16% from the preceding academic year.  The tuition increases are undoubtedly necessary given the increase in the decrease of support the university receives from the state legislature.  Nonetheless, as a result of the tuition increases some students may be forced to leave the university because of their inability to pay the increased tuition costs.  There is one group at the university who will not be forced to leave because of the university’s difficult financial circumstances-the Chancellor and a number of other top administrators.

In early February it was reported by the Daily Camera how funds from the 9.3% tuition hike that was put in place the preceding year were spent.  When the tuition rise was announced it was described as being used to fund a merit-based salary pool for faculty and staff to provide 3% raises.  As a result of the 2010-2011-tuition increase the university received approximately $36 million in revenue.  The regents said they understood that of that amount $11.8 million would go into compensation for top faculty, staff and administrators. In a memorandum to faculty and staff the Chancellor said that those meeting or exceeding expectations would receive a one time pay increase from what he called a “3 percent merit pool.”

What he neglected to point out was that some people got to swim in the deep end of the pool whereas others were in the very shallow end.  Those in the deep end included the author of the memorandum who received a 14% pay raise increasing his salary from $350,000 to $389,000.

Swimming in the deep pool with the Chancellor was the chief human resources officer whose salary went from $210,000 to $240,000.  These are only representative increases.  Several other high level administrators including chancellors at the two other campuses received increases that were significantly larger than 3%.

According to the paper’s report, considerably more administrators than faculty had access to the deep end of the pool.  Whereas 51 percent of faculty members received raises (having had none for the preceding 3 years,) 71 percent of eligible professional staff members received raises.  The president of the university explained why the salaries went disproportionally to high-level administrators.  He said:  I’ve got to pay for good people. I want quality.  You’re not going to have quality if you don’t have quality people working for you.”

Within days after the distribution of increases in pay was publicly disclosed it was learned that the university had discovered a way to save money.  It pertains to tuition waiver benefits for eligible faculty and staff dependents.  The plan to implement the new plan was announced in 2011 and the hope was that it could be implemented by the summer of 2012.  It permits employees to transfer their eligibility for free tuition to children and spouses.  The plan had been recommended by the university’s faculty council and its adoption was announced in early February 2011. As finally promulgated, however, a minor concession was made to the realities of tough fiscal times.  That was to take away most of the benefit from faculty and staff dependents at the home campus of the university in Boulder (but not other campuses).  Those faculty and staff dependents will only be able to transfer their tuition waivers for summer courses and not those offered during the normal academic year.  As Ken McConnellogue, a university spokesman explained, “the goal of the overall program is to be cost neutral in a down economy.  What cost neutral translated to for the Boulder campus was to offer summer courses only.”

Mr. McConnellogue did not say how the increase in administrative salaries was cost neutral in a down economy.  He did not explain why increasing pay for administrators so they would not leave the university for other places was more important than doing the same for faculty. Perhaps no one asked.

Christopher Brauchli is an attorney living in Boulder, Colorado. He can be e-mailed at brauchli.56@post.harvard.edu.

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