25 years old and deep in debt

[Caliga]

Geddy Lee can afford 27k.

Good one Ed. 

[Neil]

It that one of those transvestites?  It looks suspiciously like the 'I'm a PC' guy dressed as a woman.

[Caliga]

It that one of those transvestites?

I hope so?

[Ed Anger]

Its today's Tom Sawyer.

[Eddie Teach]

It that one of those transvestites?  It looks suspiciously like the 'I'm a PC' guy dressed as a woman.

Name is Randall, I'm sure it's a dude. BTW, there's a barely noticeable t-shirt, so that's probably a vest and not a woman's shirt as I first thought.

Edit- looking again, that may well be a woman's coat. 

[Savonarola]

I heard this on NPR, answering the question "Where does all that money go?":

Duke: $60,000 A Year For College Is Actually A Discount

In 1984, it cost $10,000 a year to go to Duke University. Today, it's $60,000 a year. "It's staggering," says Duke freshman Max Duncan, "especially considering that's for four years."

But according to Jim Roberts, executive vice provost at Duke, that's actually a discount. "We're investing on average about $90,000 in the education of each student," he says. Roberts is not alone in making the claim. In fact, it's one most elite research institutions point to when asked about rising tuition.

But just where exactly is all that money going? Michael Schoenfeld, Duke's vice president of public affairs, says for part of that answer, you need to look up: "For the first time in probably anybody's memory, there will be two cranes hovering over the main campus quad." Duke is in the process of renovating its library and dining hall; $8,000 of the $90,000 Duke spends on each student goes into building and maintaining physical infrastructure on campus.

Another $14,000 goes to pay a share of administrative and academic support salaries, which in Duke's case includes more than $1 million in total compensation to the university president, Richard Brodhead, and more than $500,000 to the provost, Peter Lange, according to 2011 tax filings. Also, $14,000 goes to dorms, food and health services; $7,000 goes to staff salaries for deans and faculty; and miscellaneous costs take up another $5,000.



Then a big chunk, $20,000, goes to Duke students who get financial aid.

"For those paying full freight, the full sticker price, their tuition dollars are supporting students who otherwise could not afford to come to Duke," Lange says.

It benefits people like sophomore Tara Mooney. She is among the roughly 50 percent of Duke students who receive financial aid. "I call them normal people," she says. "Getting financial aid, that's what I consider normal."

Most financial aid recipients have to repay a portion of their aid, which comes in the form of loans and grants. Mooney is a special case. She's one of 500 undergraduate students (not including those on merit or athletic scholarships) who pay nothing at all.



Mooney says her mom lost her job at a public school about the same time that she was applying to college. "When we saw the aid package is when my mom and I started crying, because we knew that I could actually come here," she says. "They were going to give me enough money that it was actually possible."

But the biggest category of costs is faculty, at $21,000 per year per undergraduate student.

Jennifer West is a professor of bioengineering and materials science with a long list of publications, awards and titles. To hire West away from Rice University, money wasn't enough. She came with an entourage. "I moved a whole entire research group with me, so I had to move a lot of people and then we had to move a lot of our equipment and rebuild our lab," she says. "They actually sent architects to Rice who looked at our lab facilities there, then used that information to go back and design the facility that would work for us at Duke."

West is not alone. Duke pays what it calls "startup costs" for a lot of professors, particularly in the sciences.

And decisions about hiring faculty can drive up costs in other parts of the university. Duke considers a lot of that spending when it says $90,000 is what it costs to educate an undergraduate each year.

Charles Schwartz, a retired professor from the University of California, Berkeley, who has been studying university finances for the past 20 years, takes issue with this way of accounting. He says it's unfair to place the financial cost of professors like Jennifer West, who spend most of their time in the lab, on undergraduate students. "It's just wrong to bundle all those costs together," he says.

Lange disagrees. "If for instance you try to say ... nothing about the time the faculty member does research redounds to the benefit of the undergraduate ... then I guess you can do the accounting a completely different way," he says. "I think that's a deep misunderstanding at how, at least at a place like Duke, how the actual educational delivery happens."

Schwartz doesn't deny the value of research. It helps advance the human condition, discover new technologies, find cures for cancer and, in Jennifer West's case, build transplantable organs from a small sample of cells. But Schwartz questions how much undergraduates benefit from that.

In the end, Schwartz and Lange don't disagree on the value of what goes on at places like Berkeley and Duke. The disagreement is over the story that Duke tells its undergraduates.

So if you're a student at Duke, are you getting a massive discount on the cost of your education? Or are you subsidizing a giant educational edifice that you as an undergraduate student will barely come into contact with?

The answer sort of depends on what kind of student you are.

If you're engaged in research and capitalizing on your professors' expertise, maybe you're getting something that's worth more than what you paid. If you've got a good financial aid package, you're definitely getting a good deal. But if you're a full-paying student, who's not learning much from professors outside the classroom, it's the university that's getting the deal.

[CountDeMoney]

Before all the teacher-haters and anti-intellectual mouthbreathers bitch:

Duke head coach Mike Krzyzewski received a big pay raise this year to $7.2 million making him the highest-paid coach in college basketball and all of college sports.

[Eddie Teach]

7.2 million to the basketball coach, yet the article is bitching about the million to the President. 

[Valmy]

7.2 million to the basketball coach, yet the article is bitching about the million to the President. 

His salary does not come out of tuition money though but directly from money his program earns.  Or at least he better or the University President should be fired.

[crazy canuck]

An interesting piece on income inequality from the Economist of all places.

I think the bolded part at the end is a most astute observation and I fear will turn Ide's pants into... well you know.

Capital in the long run
Jan 9th 2014, 13:11 by R.A. | LONDON
..THOMAS PIKETTY, a French economist from the Paris School of Economics, is best known for his involvment in the joint project (with people like Emmanuel Saez and Anthony Atkinson) to build long-term series on income earned by the rich. It is thanks to these efforts that we know, for example, that the share of American income earned by the top 1% has returned to a level close to 20%, nearly matching the all-time high set in 1928. But Mr Piketty is likely to become much better known in 2014, when the English version of his 2013 book, "Capital in the Twenty-First Century", is published in March. The book aims to revolutionise the way people think about the economic history of the past two centuries. It may well manage the feat.

This week's Free exchange column examines the book. It is, first and foremost, a very detailed look at 200 years' worth of data on the distribution of income and wealth across the rich world (with some figures for large emerging markets also included). This mountain of data allows Mr Piketty to tell a simple and compelling story. Wealth as a share of income held steady at very high levels in the 18th and 19th centuries, contributing to stark inequalities in wealth and income. Rising worker wages in the late 19th and early 20th centuries stabilised growth in wealth concentrations but did nothing to reduce inequalities, which were only eliminated by the great shocks of the period from 1914 to 1950. Economists tricked themselves into thinking that the resulting compression in the income and wealth distribution was a natural feature of the maturation of capitalist economies. But as the shocks receded wealth began to accumulate again and growth in income inequality resumed. From the perspective of 2014, concentration of wealth and income begins to look like the natural state of capitalism rather than an exception.

Mr Piketty allows that this need not be the case. He sets out two "laws" to describe when and how capitalism will generate divergence rather than convergence in wealth and income:

The first explains variations in capital's share of income (as opposed to the share going to wages). It is a simple accounting identity: at all times, capital's share is equal to the rate of return on capital multiplied by the total stock of wealth as a share of GDP. The rate of return is the sum of all income flowing to capital—rents, dividends and profits—as a percentage of the value of all capital.
The second law is more a rough rule of thumb: over long periods and under the right circumstances the stock of capital, as a percentage of national income, should approach the ratio of the national-savings rate to the economic growth rate. With a savings rate of 8% (roughly that of the American economy) and GDP growth of 2%, wealth should rise to 400% of annual output, for example, while a drop in long-run growth to 1% would push up expected wealth to 800% of GDP. Whether this is a "law" or not, the important point is that a lower growth rate is conducive to higher concentrations of wealth.

In Mr Piketty's narrative, rapid growth—from large productivity gains or a growing population—is a force for economic convergence. Prior wealth casts less of an economic and political shadow over the new income generated each year. And population growth is a critical component of economic growth, accounting for about half of average global GDP growth between 1700 and 2012. America's breakneck population and GDP growth in the 19th century eroded the power of old fortunes while throwing up a steady supply of new ones.

Tumbling rates of population growth are pushing wealth concentrations back toward Victorian levels, in Mr Piketty's estimation. The ratio of wealth to income is highest among demographically challenged economies such as Italy and Japan (although both countries have managed to mitigate inequality through redistributive taxes and transfers). Interestingly, Mr Piketty reckons this world, in which the return to capital is persistently higher than growth, is the more "normal" state. In that case, wealth piles up faster than growth in output or incomes. The mid-20th century, when wealth compression combined with extraordinary growth to generate an egalitarian interregnum, was the exception.

The twist in the story is that while technological progress can raise labour productivity and boost wages, it can also make it easier to substitute capital for labour. In that case, even rapid productivity growth may merely enhance capital's share of income, the return to capital, and the concentration of income and wealth.

As with any sweeping narrative, Mr Piketty's book occasionally tries too hard to shoehorn history into the framework, and it doesn't always deal generously with inconvenient facts. But the database on which the book is built is formidable, and it is difficult to dispute his call for a new perspective on the modern economic era, whether or not one agrees with his policy recommendations (as many will not).

What Mr Piketty conveys most powerfully, in my opinion, is the fact that economics was once centrally concerned with the question of distribution. It was impossible to ignore in the 19th century! Not least because economists of a market-oriented disposition and those more sympathetic to Marx both wondered whether capitalism was capable of generating a sustainable distribution of the gains from growth. We are all used to sneering at communism because of its manifest failure to deliver the sustained rates of growth managed by market economies. But Marx's original critique of capitalism was not that it made for lousy growth rates. It was that a rising concentration of wealth couldn't be sustained politically. Ultimately, those of us who would like to preserve the market system need to grapple with that sort of dynamic, in the context of the worrying numbers on inequality that Mr Piketty presents.

[crazy canuck]

An interesting opinion piece at the Globe essentially saying that time spent teaching at universities is way down.  The excuse given is more time is being spent on research.  But for at least 20% of professors in Ontario they have both a light teaching load and are not spending their time doing research.  Its estimated that if those professors who are not spending their time doing research would spend their time teaching a large number of spaces would be created - or put another way, we have way too many profs burdening the system.

http://www.theglobeandmail.com/globe-debate/professors-need-to-teach-more/article17414147/

[alfred russel]

I'm sure the zillion PhDs desperate for a teaching job--never mind a tenure track position--are thrilled to hear that assessment.

[The Minsky Moment]

7.2 million to the basketball coach, yet the article is bitching about the million to the President. 

His salary does not come out of tuition money though but directly from money his program earns.

Coach K owns a program, I always thought he was an employee?
Money being money is fungible . . .

[Ideologue]

I'm sure the zillion PhDs desperate for a teaching job--never mind a tenure track position--are thrilled to hear that assessment.

To cure an infestation of lice, the eggs of the insect must likewise be destroyed.

[Admiral Yi]

I think wealth inequality is the natural result of private property and capital markets that provide a return.