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Could the State Move to Ban or Limit Athletic Subsidies
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Marcus Offline
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Post: #21
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-29-2017 03:31 PM)#41 Wrote:  
(06-29-2017 03:27 PM)Cat_Litter Wrote:  
(06-29-2017 03:10 PM)QSECOFR Wrote:  
(06-29-2017 03:08 PM)Recluse1 Wrote:  As a whole, the lack of oversight in how this money is spent is frightening, rising tuition costs need to be addressed. As unpopular as such an idea would be. I think fairness needs to be put into place, but whenever a heavy handed approach is used by states or the federal government toward anything, it just seems like things get worse.

Tuition rates having been climbing very fast at ALL schools because of the student loan program which now carries more debt than all U.S. household credit card debt.

Get rid of the student loan program and tuition will drop like a rock.

How so? How is tuition based on outstanding loan balances when the loans are made by banks, not the university. Just curious.

Universities have no incentive to compete on price because every student has unlimited borrowing power (thanks to the nondischargability of student loan debt in bankruptcy). They can charge whatever they want and expect the student to borrow more in order to pay, and the banks are happy to give more money because the loans are virtually risk-free for them.

If you ended student loans, suddenly only a very small part of society would be able to afford college. Universities would have to make their product more affordable or face a shortage of students.

Exactly.
 
06-30-2017 07:36 AM
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Marcus Offline
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Post: #22
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-29-2017 03:10 PM)QSECOFR Wrote:  
(06-29-2017 03:08 PM)Recluse1 Wrote:  As a whole, the lack of oversight in how this money is spent is frightening, rising tuition costs need to be addressed. As unpopular as such an idea would be. I think fairness needs to be put into place, but whenever a heavy handed approach is used by states or the federal government toward anything, it just seems like things get worse.

Tuition rates having been climbing very fast at ALL schools because of the student loan program which now carries more debt than all U.S. household credit card debt.

Get rid of the student loan program and tuition will drop like a rock.

You nailed it.
 
06-30-2017 07:38 AM
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Bearcat 1985 Offline
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Post: #23
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-29-2017 03:31 PM)#41 Wrote:  
(06-29-2017 03:27 PM)Cat_Litter Wrote:  
(06-29-2017 03:10 PM)QSECOFR Wrote:  
(06-29-2017 03:08 PM)Recluse1 Wrote:  As a whole, the lack of oversight in how this money is spent is frightening, rising tuition costs need to be addressed. As unpopular as such an idea would be. I think fairness needs to be put into place, but whenever a heavy handed approach is used by states or the federal government toward anything, it just seems like things get worse.

Tuition rates having been climbing very fast at ALL schools because of the student loan program which now carries more debt than all U.S. household credit card debt.

Get rid of the student loan program and tuition will drop like a rock.

How so? How is tuition based on outstanding loan balances when the loans are made by banks, not the university. Just curious.

Universities have no incentive to compete on price because every student has unlimited borrowing power (thanks to the nondischargability of student loan debt in bankruptcy). They can charge whatever they want and expect the student to borrow more in order to pay, and the banks are happy to give more money because the loans are virtually risk-free for them.

If you ended student loans, suddenly only a very small part of society would be able to afford college. Universities would have to make their product more affordable or face a shortage of students.

There is NOT an unlimited amout of student loans that an undergraduate can take out every year. There is, and always has been, a cap, and that cap has roughly increased at the rate of inflation since the 1960s. A student does not have this huge pool of student loan money available that tuition is rising to sop up. The maximum loan amount has increased at, or sometimes below, the rate of inflation, yet tuition increases have gone up at far above the rate of inflation. Clearly other factors are at work here.

The only Ohio school that I could find historical tuition data for was OU. According to that chart, in the late 60's, you could pay full in-state tuition to OU with only 50% of the annual limit. Today, the max student loan covers less than half of OU's in-state tuition. Clearly student loans are not driving the rapid rise in inflation. You need to look at other factors like administrative bloat and athletic subsidies (often 10% of tuition at many schools) and decreased state support that needs to be made up with tuition dollars.

Now, if you want to talk about the total amount of loans that go out every year, yes it has increased by a large amount. That's because more people are going to college and in particular that increase is being driven by huge increases in community college and for-profit college enrollment.
 
(This post was last modified: 06-30-2017 08:59 AM by Bearcat 1985.)
06-30-2017 08:53 AM
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Marcus Offline
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Post: #24
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 08:53 AM)Bearcat 1985 Wrote:  
(06-29-2017 03:31 PM)#41 Wrote:  
(06-29-2017 03:27 PM)Cat_Litter Wrote:  
(06-29-2017 03:10 PM)QSECOFR Wrote:  
(06-29-2017 03:08 PM)Recluse1 Wrote:  As a whole, the lack of oversight in how this money is spent is frightening, rising tuition costs need to be addressed. As unpopular as such an idea would be. I think fairness needs to be put into place, but whenever a heavy handed approach is used by states or the federal government toward anything, it just seems like things get worse.

Tuition rates having been climbing very fast at ALL schools because of the student loan program which now carries more debt than all U.S. household credit card debt.

Get rid of the student loan program and tuition will drop like a rock.

How so? How is tuition based on outstanding loan balances when the loans are made by banks, not the university. Just curious.

Universities have no incentive to compete on price because every student has unlimited borrowing power (thanks to the nondischargability of student loan debt in bankruptcy). They can charge whatever they want and expect the student to borrow more in order to pay, and the banks are happy to give more money because the loans are virtually risk-free for them.

If you ended student loans, suddenly only a very small part of society would be able to afford college. Universities would have to make their product more affordable or face a shortage of students.

There is NOT an unlimited amout of student loans that an undergraduate can take out every year. There is, and always has been, a cap, and that cap has roughly increased at the rate of inflation since the 1960s. A student does not have this huge pool of student loan money available that tuition is rising to sop up. The maximum loan amount has increased at, or sometimes below, the rate of inflation, yet tuition increases have gone up at far above the rate of inflation. Clearly other factors are at work here.

The only Ohio school that I could find historical tuition data for was OU. According to that chart, in the late 60's, you could pay full in-state tuition to OU with only 50% of the annual limit. Today, the max student loan covers less than half of OU's in-state tuition. Clearly student loans are not driving the rapid rise in inflation. You need to look at other factors like administrative bloat and athletic subsidies (often 10% of tuition at many schools) and decreased state support that needs to be made up with tuition dollars.

Now, if you want to talk about the total amount of loans that go out every year, yes it has increased by a large amount. That's because more people are going to college and in particular that increase is being driven by huge increases in community college and for-profit college enrollment.

I think the issue is who is actually enforcing the "cap".
 
06-30-2017 09:20 AM
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SuperFlyBCat Offline
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Post: #25
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 07:31 AM)rath v2.0 Wrote:  Yikes. UC carries about $1.2 billion in debt on about a $1.2 billion annual budget.

Paying about $80 million a year in debt servicing.

Yes a lot of that comes capital projects building new buildings. State universities really need to totally rethink how they do this.
 
06-30-2017 10:39 AM
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BearcatJerry Offline
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Post: #26
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 10:39 AM)SuperFlyBCat Wrote:  
(06-30-2017 07:31 AM)rath v2.0 Wrote:  Yikes. UC carries about $1.2 billion in debt on about a $1.2 billion annual budget.

Paying about $80 million a year in debt servicing.

Yes a lot of that comes capital projects building new buildings. State universities really need to totally rethink how they do this.

And the greater part of that debt load is bonded...which means it is financed and secured debt.

It's not like the University has been running around like a drunken student, running up the credit card with no clue how to pay it off.
 
06-30-2017 11:10 AM
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Bruce Monnin Offline
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Post: #27
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 11:10 AM)BearcatJerry Wrote:  
(06-30-2017 10:39 AM)SuperFlyBCat Wrote:  
(06-30-2017 07:31 AM)rath v2.0 Wrote:  Yikes. UC carries about $1.2 billion in debt on about a $1.2 billion annual budget.

Paying about $80 million a year in debt servicing.

Yes a lot of that comes capital projects building new buildings. State universities really need to totally rethink how they do this.

And the greater part of that debt load is bonded...which means it is financed and secured debt.

It's not like the University has been running around like a drunken student, running up the credit card with no clue how to pay it off.

And UC has an endowment of 1.166 billion.

Having a huge credit card bill is not a big deal if you have enough money in your checking account/investment holdings to pay for it. You just have to be smart enough to not pay more in interest on your debt then you are earning on your investments.
 
06-30-2017 11:31 AM
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SuperFlyBCat Offline
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Post: #28
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 11:10 AM)BearcatJerry Wrote:  
(06-30-2017 10:39 AM)SuperFlyBCat Wrote:  
(06-30-2017 07:31 AM)rath v2.0 Wrote:  Yikes. UC carries about $1.2 billion in debt on about a $1.2 billion annual budget.

Paying about $80 million a year in debt servicing.

Yes a lot of that comes capital projects building new buildings. State universities really need to totally rethink how they do this.

And the greater part of that debt load is bonded...which means it is financed and secured debt.

It's not like the University has been running around like a drunken student, running up the credit card with no clue how to pay it off.

Of course, but their are ways to utilize space better and forego spending. Most universities that need newer dorms housing, they just do a long term ground lease to a developer who builds the new building, and then the University gets some of the rent revenue. Zero risk or spending involved, maybe UC has done this in a couple of places IDK. And some buildings are designed way to user specific, with massive wasted common areas, like 40% of what is under the roof in not usable. How a department needs to utilize space or the building can do a 180 in less that 10 years.
For new construction one of the main design criteria should be super easy ability to renovate that building to another end use X amount of years down the road.

In the private market in the late 70's and early 80's developers built office buildings with super large atriums and common areas, looks nice, but when you lease space in that building you pay for that. As example you might be paying on 24,000 RSF, but you are locking up a suite that is 20,000 RSF.

Another example is Usqaure at the loop (don't get me started on the original money UC put up to make that happen), UC should have required that much more office space was built there, they have all of the 40,000 RSF. There should have 100,000 RSF, as an additional 60,000 RSF can be used as ongoing swing space when other areas are under construction. Heck they could have had the law school built there under a lease, lots of Law Schools are like this now. It would have been much more cost efficient than building new. They almost made that mistake at the Banks, owning it not leasing it.
 
06-30-2017 12:02 PM
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Bearcat 1985 Offline
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Post: #29
RE: Could the State Move to Ban or Limit Athletic Subsidies
(06-30-2017 11:31 AM)Bruce Monnin Wrote:  
(06-30-2017 11:10 AM)BearcatJerry Wrote:  
(06-30-2017 10:39 AM)SuperFlyBCat Wrote:  
(06-30-2017 07:31 AM)rath v2.0 Wrote:  Yikes. UC carries about $1.2 billion in debt on about a $1.2 billion annual budget.

Paying about $80 million a year in debt servicing.

Yes a lot of that comes capital projects building new buildings. State universities really need to totally rethink how they do this.

And the greater part of that debt load is bonded...which means it is financed and secured debt.

It's not like the University has been running around like a drunken student, running up the credit card with no clue how to pay it off.

And UC has an endowment of 1.166 billion.

Having a huge credit card bill is not a big deal if you have enough money in your checking account/investment holdings to pay for it. You just have to be smart enough to not pay more in interest on your debt then you are earning on your investments.

University endowments generally disburse between four and five percent of the principal each year. For argument's sake, lets peg it at 4.5%. That means UC's endowment is putting $52.4M into the annual budget, and 90% of that is restricted use meaning the university has to use it solely for the purpose for which it was donated. The endowment is great, but it's effect is often overestimated and it doesn't leave much leeway for the university administration as to its uses.

As for the debt, the ratios are what matters: overall debt and annual debt service as a percentage of the annual budget. At UC, it's not good. That being said, it didn't cause any great fiscal crisis as it did at Akron, and hopefully we can grow that number down to a more healthy and stable ratio over the next decade. In my mind, the only fear is that it will lead us to to slack off on admissions standards to increase enrollment and tuition dollars.
 
06-30-2017 12:26 PM
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doss2 Offline
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RE: Could the State Move to Ban or Limit Athletic Subsidies
Colleges should be the only lender to students. Use the endowments for student loans instead of some of the stocks and bonds. They likely would get more selective in lending.
 
06-30-2017 02:47 PM
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