Professor speaks on overspending, high tuition rates

When officials at U.S. colleges hike tuition, they say the extra revenue is being used to fund academic programs. Ohio University professor Richard Vedder disputes these officials' claims, and puts forth his own theory of why tuition is increasing: private and public universities are egregiously inefficient.\nIn a speech at the Heritage Foundation on Tuesday, Vedder, author of "Going Broke by Degree: Why College Costs Too Much," chastised colleges for exacting from students enormous sums of money, only to use that revenue to fund non-academic endeavors. According to Vedder's calculations, only 21 cents of each tuition dollar is used to fund academic programs. \nThe rest of the money, he said, is instead financing quality of life improvements, faculty pay raises and a bloated administrative bureaucracy. Tuition at public and private universities has skyrocketed in recent years, with some institutions charging almost $35,000 for a year of study.\nIn April, the IU board of trustees approved a 4 percent tuition increase for all resident students returning in the fall and a 6 percent hike for all non-residents. That equals a $189.60 increase for continuing resident students and $948.20 more per year for out-of-state students.\nVedder said college officials are able to spend money at their discretion because most higher education institutions are non-profit organizations, which are not subject to scrutiny from investors, unlike private companies with shareholders.\n"There are virtually no incentives at a university to be efficient," he told the 60 people attending the speech at the Heritage Foundation, a conservative think tank in Washington. The failure of the government and financial markets to steer spending priorities allows colleges to be "indifferent or hostile" to change, Vedder said. \nHe also brushed off suggestions that tuition is rising to combat inflation by pointing to his finding that paying for college is a much bigger burden on a family today than it was 40 years ago.\n"The evidence is crystal clear that the cost of higher education is rising greater than prices in general," he said.\nFor Vedder, an Ohio University economics professor, criticizing colleges does not mean he is thumbing his nose at a world that nurtured his studies and brought him prestige.\nSeveral times during the hour-long speech, Vedder referred to his love for higher education, and said, "America is a better place because we have universities." But he also emphasized that while universities always will play an important role, they will need to become more efficient or risk pricing out potential students.\nIn his book and at Tuesday's discussion, Vedder suggested several ways that lawmakers and college officials could become more productive and stave-off higher tuition prices. Vedder said the federal government should mandate that professors teach more classes, which will reduce the need to hire more instructors. He also suggested that state governments eliminate subsidies that are being used by colleges for non-academic purposes.