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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning again, everyone. Usually, when we think about the $1.6 trillion student debt crisis in this country, we're picturing the price tags that come along with attending elite private universities, right? Tuition prices at state universities have also skyrocketed over the last 20 years or so. As we approach the restart of student loan collection next month, The Wall Street Journal released an exposé on the seemingly unfettered spending occurring at many public universities across the country.

What is it that these state schools are spending on, and what's at the root of this trend? What might we do about it as well? We will pose these questions and more to Melissa Korn, higher education reporter for The Wall Street Journal, who joins us now. She is a reporter on the story in the journal with the headline, Colleges Spend Money Like There's No Tomorrow. Melissa, thanks for being here today. Welcome to WNYC.

Melissa Korn: Thanks for having me.

Brian Lehrer: Of course, colleges are all about tomorrow, supposedly for their students, but they're spending like there's no tomorrow is the headline of your story. What universities did you look at in trying to answer what questions?

Melissa Korn: Sure. My colleagues and I dug into the financial records of 50 flagship universities, one for each state. Those are usually the oldest public university in each state. We looked at their audited financial records. We, in some cases, asked for specific data points that are not included in their audited financials because there's not a lot of uniformity in how schools report some of their numbers. Our goal was to figure out where the money goes and where it's coming from over time.

We adjusted everything for inflation and looked back 20 years to see what schools were spending more money on. The answer was everything all at once. Where the money was coming from, we saw a shift in schools getting more money from tuition as state funding fell. What we really took away from our investigation was that the tuition revenue more than made up for any losses in state funding, saying, "We had to raise tuition because our state funding fell," rings a little bit hollow.

Brian Lehrer: Your piece shares data showing the percent change in spending and enrollment over the last 20 years, from 2002 to 2022. There's a local angle here. The University of Connecticut, UConn, was the worst offender on that scale with spending increasing at 73% in the last 20 years, far above the national median of 38%. What's UConn spending all its money on?

Melissa Korn: UConn is in a pretty tough situation, or has been for years. They are on the hook or have been on the hook for covering unfunded pension liabilities for the state. They're covering pension costs for people that actually have no affiliation to UConn. That's just been the way that the pie is divvied up in the state of Connecticut. Their unionized employees negotiate contracts with the state, not with the school itself, but the school is the one to pay for it.

It's like being told, "Hey, you're now on the hook for this money. We arranged this salary deal and good luck with that." The cost of people at UConn has gone up tremendously over the past 20 years. The cost of athletics has also increased and certainly not helped their situation.

Brian Lehrer: Are you saying that it gets put on UConn's books and therefore passed on to students in the form of tuition hikes that the state needs to make up for funding shortfalls for pensions for all retired state workers, not just UConn employees?

Melissa Korn: Yes, that is correct. The arrangement has changed a little bit in this coming budget year, but that has been the case for a long time and the gap in what's owed and what the school owes and, what share the state is actually covering up school employees, has shifted dramatically over the years.

Brian Lehrer: I guess in a state like Connecticut, which has a lot of fairly wealthy people, there could be a political debate. This is probably outside the scope of your article. Tell me, if it's not, why don't you raise taxes on wealthy residents of Connecticut rather than charging state university students more to cover your pension obligations?

Melissa Korn: That is certainly a fair question to be asking. Definitely above my pay grade, that one.

Brian Lehrer: Is UConn-- is Connecticut unique in that funding model for state pension obligations or did you find it elsewhere too?

Melissa Korn: That particular setup is fairly unique but having unionized employees negotiate with the state is not as unique. There are a lot of schools that just have to accept whatever deal the state comes to with employees in terms of salaries and benefits. That isn't just UConn in that situation.

Brian Lehrer: Listeners, we want your input on this. Tell us your stories. Did you attend a state university anytime in, let's say, the last 20 years? What was your impression of the schools' facilities and renovations? We'll get into how a lot of these tuition increases, a lot of these increases in spending, are about facilities or about amenities. Was there anything present at your school that seemed like a luxury as opposed to a necessity that you would've preferred to not subsidize with your tuition dollars? Or, conversely, what about those amenities you liked and might consider indispensable or just worth it for student quality of life? 212-433-WNYC.

Faculty members, administrators, anybody else connected to any flagship state university in the country may also call. 212-433-WNYC, 433- 9692 from Melissa Korn from The Wall Street Journal, one of the reporters on the story with the headline Colleges Spend Money Like There's No Tomorrow, and it's about state colleges and universities. 212-433-9692. Call or text or tweet @BrianLehrer.

Let's go to another part of the country and take another example that seems particularly egregious from your article. It's the University of Oklahoma. You mentioned the purchase and acquisition of a 32,000-foot Italian monastery, I guess that's square-foot Italian monastery, for its study abroad program. How much did they spend on that, and why was it a priority for the school?

Melissa Korn: Sure. The school spent roughly $14 million on acquiring and renovating this monastery over a number of years. They say the money came from private donations as well as university funds. Again, those are funds that could be earmarked for a range of things. They chose to earmark them for this acquisition and renovation. To be fair, it looks like an absolutely stunning place. There are painted frescoes on the walls of the classrooms and landscaped gardens and all of that. They say that it helps them with their study abroad programming, which is something that a lot of schools compete on.

Say, "We can get you to these places. We can have you get a taste of life outside the US but still within the safe confines of our university." Plenty of students do go there, and they often seem to love it, but as the current president told me, that probably would not be the best use of capital dollars if he was asked to do it again now. He did not make the decision himself back then.

Brian Lehrer: The University of Kentucky has quite the discrepancy between how much it spends and how much students can afford. According to your article, being one of the poorest states in the country, why is the University of Kentucky spending what you report as $805,000 a day?

Melissa Korn: They've had this major campus upgrade program where they boast on their own website that they've spent $805,000 a day for the past 12 years building new dorms and academic facilities and hospitals, and you name it. They've been building it. The school has this mandate from the state dating back to the late '90s that they become a top 20 public research university. Unfortunately, the state then started to cut funding soon after it gave that mandate, and the school has pursued a lot of different ways of trying to become really a national and international player in academics, in athletics, in research. They really have very grand ambitions and those ambitions become quite expensive.

Brian Lehrer: We'll go through some other examples of some other state universities and what they're spending on. We've been talking about some particular things, pensions in Connecticut, the general campus upgrade at Kentucky, that Italian study abroad program, monastery for the University of Oklahoma. Are there patterns though? Are there biggest things? I'm sure a lot of our listeners are wondering is this sports?

Other listeners might be wondering, is this more fancy digs in the dorms, more food amenities, more places to hang out, so students want to go there because they have to compete with other colleges to attract students based on these amenities when they tour the campus. You know what I mean? Are there one or two or three biggest items that tie these many state universities together nationally?

Melissa Korn: I think I'll choose option D, and that's all of the above. No, the people are generally the biggest expense. The salaries and benefits can take up more than 40%, 50% of operating budgets at many schools. Anything to do with paying salaries or paying benefits has a huge impact on where the money goes overall. There's been a lot of construction upgrades. Some schools will say, "Well, that wasn't university funds. We borrowed money for that. That was the debt markets," but the school is still on the hook to make those debt payments. Oftentimes, that means the students are on the hook and in some cases, there is even a line item student fee to cover debt servicing.

What you see physically on the campus is definitely a huge expense. Upgrading with amenities for dorms and student centers and lazy rivers and rock climbing walls, people laugh about them, but they're everywhere. Schools say that they're just serving students what the students expect, the level of amenity and comfort that they want with air conditioning and bigger beds and fancier dining options, and that if they didn't give students this, the students would go somewhere else. There's definitely a competitive element to it.

Then a lot of the money goes to things that the schools don't necessarily even pay much attention to. Many schools, for decades, have used this budget model where they just add on a little bit to whatever they gave the department the prior year, adjust a little bit for inflation, and maybe up a couple of percentage points, and that's it. They don't really do some of the tough work of deciding what programs are money makers or not, what programs are necessary for the mission of the school, where enrollment trends have changed, where costs have changed, how to cut costs. That is not front and center when they're coming up with their budgets often.

Brian Lehrer: Joseph in White Plains, you're on WNYC. Hi, Joseph.

Joseph: Brian, thank you very much for taking my phone call. Good morning to your guest. Finally, somebody did the right investigation. I went to the Binghamton 20 years ago. The tuition right now is 15 times more. The biggest reason all these state university are suffering, and I think you had a program about maybe five, six years ago about this issue, is the faculties that they get tenure. I have a relative that was tenure full professor at the State University of New York at Buffalo. Last 7, 10 years, he was in overseas and he was collecting a $200,000 salary. That's outrageous.

This is the only reason because of the public employees in all the 50 states, they have this power. People are worried these professor are leaving. They don't teach. They become full professor at the state university. They walk away permanently. That's what I want to share to your guest. I hope she continue this investigation because you're going to find out there is a lot of waste of the money in the state universities and other things, but thank you very much for your time.

Brian Lehrer: Joseph, thank you for your call. I imagine that's overstated the example that he gives of a SUNY professor making $200,000 and not even having to teach. How much do you think faculty salaries contribute to these overall expense increases and therefore to tuition increases and therefore to student loan debt?

Melissa Korn: I think you'd be pretty naive to say that they don't have an impact. Faculty salaries absolutely do play a role in this as do administrator and other staff salaries. The faculty picture has changed a lot over time. It is an older workforce. You've got folks who've been on the faculty for a very long time that aren't yet retiring but are perhaps close to retirement. They have very senior status. They maybe spend more of their time researching than teaching. They'll do one or two classes a semester sometimes and they're getting paid fairly significant salaries.

You're also seeing schools try to turn away from that. When those people do retire, rather than hiring another tenured track person, they'll hire adjuncts or contract term positions where there isn't that job security, there isn't that high pay. A lot of adjuncts get paid pretty pitifully and have to string together a whole lot of jobs to make a living.

Brian Lehrer: There's the cognitive dissonance on this issue because-

Melissa Korn: Absolutely.

Brian Lehrer: -the caller raises it the way he raises it, you're describing what you were just describing for some of the older faculty especially, but what we talk about so often here and elsewhere is how schools are moving away from tenured faculty members and using really underpaid adjuncts to save money. Is that cheapness? Is that exploitation? Yet here we are talking about the other side of the coin.

Melissa Korn: Even those faculty, when they do retire, the school is still on the hook to cover their post-employment benefits and that can be quite significant. Somebody who is a tenured faculty member drags on the bottom line of the university for a very long time.

Brian Lehrer: David in Middlesex County, New Jersey, otherwise known as Rutgers Nation. Hi, David. You're on WNYC.

David: Hey, Brian. Good morning. How're you doing?

Brian Lehrer: All right.

David: Well, basically, Brian, like I told the screener, I knew a girl in Maryland. I lived in Maryland 20 years because I worked for the Feds. I worked for the Department of Ed for four years down there. My mom taught for 35 years. I've known people who are professors. My buddy went to Rutgers. The schools are spending, especially in these conferences, the Big 10, the PAC-12, whatever they are, they're spending so much money mainly on football and basketball. I grew up in New Jersey, loved basketball. I was a superstar, but I was more proud that I can speak English because my mom was a teacher.

It's insane, it's absurd, and it's vile how much college spend on football and basketball. Like I was telling the screener, Mike Krzyzewski made $7 million a year before he retired. Who makes $7 million a year coaching basketball? Brain surgeons don't even make that. It's crazy sport. Rutgers, they spent $100 million I think last year on their football program. The Feds should shut that school down. That is absolutely disgusting. It's just disgusting. That's it.

Brian Lehrer: David, thank you for weighing in. Thank you very much. It's true, and we've talked about this on the show before, Melissa, that often, the football coach, or I think it's more frequently the basketball coach, at the main state university in many states, is the highest-paid state employee.

Melissa Korn: Yes, that is true. I'd say in the South, it's probably more often the football than the basketball coach. Yes, they are paid very large sums of money and people assume that these big, even successful athletic programs bring money in or at least cover their own costs. They're self-sustaining, but the truth is most of them are not. Most Division 1 Power Five conference teams or athletic programs rely on direct subsidies from the university and/or student fees.

That is directly on the back of the students because those direct subsidies from the universities are often coming from tuition dollars or other dollars that could be earmarked again for a whole range of things. The caller mentioned Rutgers and that is definitely a school where the entire university is shouldering the financial burden of the athletic program as they've tried to step up and play with the big boys in their conference and things like that.

Brian Lehrer: They joined the Big 10 a few years ago. Now they're playing Ohio State and Michigan and schools like that.

Melissa Korn: Exactly. The TV revenue can be helpful, but when they have to build a new stadium or they are investing in a brand new coach or they are trying to recruit by building all sorts of new training and luxury facilities, locker rooms, things like that, it adds up, and then you've got all the sports that don't even bring in any revenue at all and those cost a lot of money to run as well.

Brian Lehrer: If you know the Rutger story well enough to answer this question, I don't think it was in the article, do they think that this is ultimately going to be a financial plus joining the Big 10 and upgrading the football program and maybe other sports as they have done? I went to a grad school at Ohio State and in the journalism program, we used to complain about the whole macho culture and what seemed like a big spending culture of the football team, but the faculty members there would say, "You know, that football program helps subsidize the decent equipment we have here in the journalism school."

Ohio State is probably the exception if that was even accurate at the time, but my question is really about Rutgers. Does the administration of Rutgers see a path to being in that position that Ohio State was in by joining Ohio State's conference?

Melissa Korn: I can talk a little bit about Rutgers but even more broadly, you see this major conference realignment among colleges right now and schools are chasing dollars. They do expect that being in the more prestigious conference or the conference with bigger TV revenue-sharing deals, will pay off both in terms of straight dollars and that they can then invest back in their athletics. Very few invest athletic money into the academic side. A couple do.

They either think it'll pay off in the sheer dollars or in reputation, national brand recognition, "Oh, hey, somebody across the country now knows our school and is considering coming here and that's going to be tuition dollars down the line." They say that there's tangible and intangible benefits of having these really massive athletic programs. The question is though, how long are you willing to be paying for that until it potentially pays off?

Brian Lehrer: Jerry in Centerport on Long Island, who says he was a professor at a SUNY school. Jerry, you are on WNYC. Hello.

Jerry: Hi. Good morning. Yes, I was a professor at Farmingdale in Long Island. This is a little into the past because I retired 20 years ago. While I was there, we had a very excellent and large agricultural program, but the facilities were old and millions of dollars were spent for a new barn, new cow milking machines, and a lot of other things. Just the thought, all facility renewed and then the agriculture department was canceled. The program was just cut out and the empty barns sit there.

We had a mortuary science program. Oh, new facilities for mortuary science, new refrigerators for the bodies, a new elevator system so people wouldn't see the bodies get carried into the building, a lot of money, and that program then was cut out. We had a veterinary assistant program, new facility for veterinary assistants and then that program was cut out a few years after that. Early childhood education--

Brian Lehrer: For time, Jerry, I'm going to jump in. By the way, refrigerators for the bodies is a phrase I never thought we would hear uttered on the show. Are you saying that in the case of Farmingdale, it was just bad management because they spent on all these academic programs and then decided to cancel them or is there a larger pattern SUNY-wide or nationwide that you're implying here?

Jerry: Well, the state legislature would cut the money to the state university and then they would say, "Well, okay, we have to cut something out." It just seemed crazy to me that we were always cutting something out that millions of dollars was spent on just a year before. Like the $6 million gym and then we cut out the phys ed requirement. The gym was still used for things but didn't need a $6 million gym with a school with no phys ed requirements.

Brian Lehrer: Jerry, thank you very much. Do you find in your reporting, Melissa, that students or parents who are students push back on any of this? Like the caller earlier who had gone to Binghamton said, we did a segment on this a number of years ago. We did. He was citing a segment five, six years ago. I think we did one back around 2008 when more Americans were first starting to really become aware of the student debt crisis in this country, and we looked at what even then was characterized as an arms race of amenities.

Are students pushing back" Are families pushing back? Are alumni pushing back when they decide how much to donate to their schools or are people saying, "Yes, great we have these gyms that people can use for fun even if there's no phys ed requirement or any of the other amenities," and they're not really questioning it?

Melissa Korn: I think it's a little bit of both. You definitely have families being more price sensitive and more interested in understanding the potential ROI of a college degree or of a degree at that particular school. They want to know that it's going to be worth it. They are sometimes voting with their feet in terms of going elsewhere or just choosing a program of study where they think the payoff will be worth it. We see more people turning away from borrowing to go to college now because, as my newspaper and plenty of others have written about and your show as discussed, there is a national student debt crisis.

People are really worried about the prospect of taking on loans to go to college. Now, that mentality has shifted a little bit over time. I think donors want to know that their money is being well spent and they don't always know exactly where it goes or what they put restrictions on it then if that's the thing that the school doesn't actually need, the money just sits there. it's not being spent down, it's not being used.

There is definitely more opposition to the increased costs. Student governments often have resolutions annually at various schools complaining about tuition oftentimes on the board of trustees of the schools where there is a student representative. The student is sometimes the lone dissenting voice when there is a vote for a tuition increase and the students just say, "I can't in good conscience ask my classmates to pay more for this new thing."

Brian Lehrer: Interesting. Last thing, and we could have kept going on this if we had all the time in the world and talked about other examples. You write about Penn State's excessive spending sending them into a budgetary crisis, literally, despite being one of the most expensive public universities in the country. My last question is, did you find any major state schools bucking the trend? I have some family members as it turns out in recent years, at Purdue and about to enter, and I see the school boasts about tuition increase restraint, but I haven't looked into those claims. Anything on Purdue or any major state school bucking the trend?

Melissa Korn: I'm laughing that you mentioned Purdue because I have to say the Purdue alumni base is very enthusiastic and very proud of their school. The number of emails I got in response to the story from Purdue grads saying, "What about us?" Yes, they have kept tuition flat for over a decade now and they have controlled a lot of costs. It hasn't necessarily been popular with everyone at the university, but they are differentiating by being an affordable or more affordable option.

There are certainly schools out there that are working on selling themselves as an affordable option, but there are many, many schools that aren't as focused on that and are still focused on, how can we attract the wealthiest students who maybe don't need financial aid, and to attract them, they go after the amenities and all the bells and whistles.

Brian Lehrer: Melissa Korn, higher education reporter for The Wall Street Journal, co-author with two colleagues of the article with the headline, Colleges Are Spending Like There's No Tomorrow. Thank you for joining us today.

Melissa Korn: Thank you.

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