American higher education costs as much as it does because much of the money that comes in is spent on non-educational things such as hotels, conference centers, diversity officials, and sports.
In today’s Martin Center article, professor Ann Marie Adams of Morehead State in Kentucky examines how sports soaks up many dollars in the Bluegrass State. While the state’s two big-time sports schools, Kentucky and Louisville, seem to cover their sports costs (although that should be viewed skeptically since schools have been known to use very creative accounting to make football and basketball appear profitable when they actually aren’t), others in the state’s system don’t.
“The specific problem,” writes professor Adams, “is that successful revenue-producing sports programs are categorized differently from non-successful sports programs.” In apparently profitable schools, sports spending is designated as “auxiliary” and thus separate from instructional costs. But in non-profitable schools, sports spending is called “non-auxiliary” and therefore just another expense to be paid out of general revenues.
That’s problematic because of the state’s funding formula for its colleges and universities. Adams explains:
Kentucky’s regional universities, like the other 90 percent of schools in NCAA Division I that fail to turn a profit, designate their athletic programs as non-auxiliary. This makes their deficits factor positively into performance funding calculations as money spent on the direct cost of educating students. Money-losing athletic programs are made to look like a benefit for students.
Adams thinks that this situation cries out for reform to get higher education’s priorities right. I agree.