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Dave in Green

Big Money in Higher Education?

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Some folks on ZN.o have gotten all wound up over the issue of big money in college sports. I just finished reading an article about big money in higher education. To be more specific, Grand Canyon University in Arizona has just moved up from D-II to D-I, joined the WAC and has become the first and only for-profit institution at the D-I level. GCU has hired Dan Majerle as head basketball coach, has increased its athletic budget from $3 million to $10 million and is investing $200 million in new facilities, with athletic facilities getting a large share. GCU can easily afford it, as it's gone from a private Christian school that was $20 million in the hole to second on Forbes' Best Small Companies in America list following its annual haul of $458 million in revenue.

The story notes that a recent study showed that American taxpayers provide for-profit institutions more than $30 billion in tax dollars every year. The report also stated that for-profit schools assign a high percentage of their revenue to marketing and recruiting than student instruction. For-profit institutions admit that their primary responsibility is to their stockholders (i.e. making money), not educating students. So does all of this get anyone more or less wound up than the big money in college sports?

ESPN Story Link

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They both get me wound up. A third thing that wounds me up is how much administrators are compensated, and the over enlistment of highly paid "administrators". This Triad, I believe, is the major problem with higher education, and is quite a drain on our economy. It isn't just money in sports, but it's the big money involved with higher education in general that is a problem; however the criticism of it in sports is absolutely warranted.

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I'm as offended by the government giving money to a profit university money to operate as I am about the government giving dairy farmers money to pour milk down the drain in order to keep dairy prices up and make companies more profitable.

However, $10 million is not a very big athletic budget. MAC schools have bigger budgets. Again, there is a difference between calling yourself D-1A and being D-1A.

Athletics is not a good investment for a university because a traditional investment requires a return on that investment. There is almost no direct evidence that investments in athletics creates a positive return for the schools in any manner. This is why the "building process" is supported by taxpayer dollars.

I see a lot of investment from this school in buildings. Fair enough. Where is the investment in research? What articles are the professors writing based upon their research? There is an old saying about professors, "If you aren't writing, you aren't reading and researching. If you aren't reading and researching, you aren't keeping up with the trends in your field. If you aren't keeping up with the trends in your field, you can't be an effective instructor." Until this university proves it can do those things, it will be producing the next crop of idiots. One would be better off with a Can't State graduate working for them.

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@GP1, that $10 million athletic budget does not include football, where GCU doesn't yet compete. So it's pretty healthy for a football-free athletic budget, and is rapidly expanding. Point is that GCU is a for-profit university that answers to its stockholders, and therefore must justify return on investment in athletics as well as other areas. It's already documented that for-profit institutions spend a larger percentage of their revenue on marketing and recruiting than student instruction. The business model is so successful that GCU ranks second on Forbes' Best Small Companies in America list.

If for-profit universities like GCU demonstrate a successful business model and thrive on the stock market, they will continue to expand regardless of how well they are educating students. If expanding investment in athletic programs and facilities is an integral part of the successful business model, it will only encourage non-profit institutions to do more of the same.

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If for-profit universities like GCU demonstrate a successful business model and thrive on the stock market, they will continue to expand regardless of how well they are educating students.

I respectfully and completely disagree that this company will expand regardless of how well they educate people. In fact, the evidence is there is greater decline in enrollment in four year for profit schools than any other category. Buying stocks is about buying the future. I'm not buying for profit universities unless I want to make a decision based completely on betting on the short term. It's more than just the bad education that will eventually catch up with them. It's the change in demographics of the US that will lead to the collapse because the reduction in population is producing a reduction in the numbers that might go to college. One day, the halls of these schools will be as empty as a suburb in China.

We need to look no further than our beloved UofA. All of the sports facilities and places for the students to play and go play, in the case of the rec center, have resulted in what? A decline in enrollment and contributed to it being $25 million in the red. UofA has the taxpayers of Ohio to fall back on. For profit schools have no taxpayers to fall back on. Banks didn't have the taxpayers to fall back on, yet they get taxpayer money. It won't be long before these schools are looking for a government handout. This country has gone so insane, they might just get one.

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On 8/8/2013 at 11:01 PM, Dave in Green said:

Some folks on ZN.o have gotten all wound up over the issue of big money in college sports. I just finished reading an article about big money in higher education. To be more specific, Grand Canyon University in Arizona has just moved up from D-II to D-I, joined the WAC and has become the first and only for-profit institution at the D-I level. GCU has hired Dan Majerle as head basketball coach, has increased its athletic budget from $3 million to $10 million and is investing $200 million in new facilities, with athletic facilities getting a large share. GCU can easily afford it, as it's gone from a private Christian school that was $20 million in the hole to second on Forbes' Best Small Companies in America list following its annual haul of $458 million in revenue.

The story notes that a recent study showed that American taxpayers provide for-profit institutions more than $30 billion in tax dollars every year. The report also stated that for-profit schools assign a high percentage of their revenue to marketing and recruiting than student instruction. For-profit institutions admit that their primary responsibility is to their stockholders (i.e. making money), not educating students. So does all of this get anyone more or less wound up than the big money in college sports?

ESPN Story Link

 

 

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