Inflation Hits the Colleges

by JAMES PHINNEY BAXTER

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THE 2.5 million students — freshmen, upperclassmen, postgraduates — who inundated our American college and university campuses last fall brought enrollments to an all-time high. For many reasons, including college men’s wartime records as officer material, American higher education now enjoys a deserved prestige. The GI Bill of Rights has made an enormous contribution to expansion; there are perhaps 1.75 million veterans on campuses. They and other students deserve the best they can get, and educators welcome the opportunity to serve so many. But observers who refer to the development as “a boon to the small college” are overoptimistic. There is a boom, all right, but it is no unqualified boon. It is, indeed, a potential menace to the small college, and so to the national interest.

Any industry enjoying such a demand as our colleges do today would be wallowing in prosperity, especially with the price of the product well up. College tuition fees, for example, average a good 25 per cent more than before the war, despite reluctance to raise prices to students. Education, however, is not an industry, and college officials lie awake nights wondering how to make ends meet. Privately endowed institutions of higher education, caught in the price spiral, want to raise over a billion dollars for new plant and endowment. Harvard alone, for example, wants 90 million dollars, and with its great body of rich and loyal alumni and its appealing research program, of such practical value in war as well as in peace, it will probably achieve its goal without too much trouble. At any rate, having been a Harvard professor for twelve years, I heartily hope so.

Williams College, about which I worry first of all, hopes to cut back in three or four years from its present enrollment of 1100 to its pre-war norm of 800. But right now, and even after the cutback, it must have 2.5 million dollars in additional endowment. And Bowdoin wants 3 million, Beloit 3.4

million, Swarthmore 5 million — and so on up and down a long list of splendid institutions. That is why many college presidents are now chiefly itinerant mendicants. In one recent month, for example, I spent twenty-four days wholly or partly outside Williamstown, chasing dollars. As during the war, when so many college presidents ran their campuses with one hand while managing a Washington job with the other, there is always a good chance, when I enter a dining car, that I shall be able to sit down with a colleague from another college and worry in company.

How can college authorities be in such a morose state of mind when they are doing a bigger business than ever before? Well, when the delivery room nurse, having already announced to papa the arrival of a son, emerges to announce a twin and then a triplet, papa may assure himself that the unit cost per child is going down. But he will hardly regard the trend as money saving.

As for Alma Mater, she is truly generous to her children. Every college spends more on each student than it receives in tuition and fees, whether from the student, his parents, or the government. Every college student in the United States is on a scholarship in the sense that none pays the full cost of his education. At Williams none pays much more than half. Thus every added student is an added deficit. The GI Bill of Rights has meant not a $500 per head subsidy to the colleges, but an increase in the number of students carried at half cost. In privately endowed colleges the difference between what the student pays and his cost to the institution can be made up only by gifts and income from the investment of prior gifts. The key to college financing lies in one figure: endowment income per student available to cover deficits. At Williams in 1939 that figure was $455. Today it is down to $400 and it may drop further. In some colleges it already has dropped to a wretched figure. Every college administrator knows that this is the heart of his problem. The chief burden on his mind, when he finds it hard to sleep, is that he has fewer dollars of free money per student just at a time when each dollar buys less.

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ONE obvious factor producing this financial decay, with a threatened consequence of decay in educational standards, is increased enrollment. There is no more pie, but there are more hungry eaters at Alma Mater’s table. Indeed, there is less pie. Interest and dividends yielded by invested college endowment funds have fallen as markedly as though there had been a capital levy. After all, at 5 per cent, which many colleges averaged on their investment portfolios in the 1920’s, an 8-million-dollar endowment yielded $400,000 a year, almost as much as 12 million dollars can today at the going rate of 3.5 per cent. Some colleges have managed to maintain yield by shifting from gilt-edge investments to common stock — a loss in security. Williams’s current endowment is 1.25 million dollars greater than it was in 1941, but our income is lower.

On the other hand, from full professors to bullfrog specimens, necessary items cost more today than in 1939. We spent $22,551 for coal in 1939-1940, $44,131 in 1946-1947, with some additional heating needs. The $21,580 added to our heating bill would have paid the salaries of two professors, two assistant professors, and two instructors. That many teachers went into the furnace so that the others could be warm enough to work. The frogs used by our biology teachers jumped from 72 cents to $2.25 a dozen. Chemicals and glassware for laboratory use rose 60 per cent, common blackboard chalk went up 40 per cent. The cost of operating Berkshire, a Williams dormitory, is up from $3100 to $5891. Last year over-all maintenance cost $159,370 more (97 per cent increase), secretaries $26,378 more (124 per cent increase) than eight years ago.

Faculty housing is a bigger item of cost than ever before. When one third of our faculty joined the armed services or civilian war agencies, their rented houses were snapped up by local townsfolk or immigrants from an overcrowded neighboring industrial city. After the war, additional housing was needed for faculty returnees and newcomers. Several faculty handy men solved their problems by undertaking extensive repairs without the help of our overburdened maintenance staff. Physics Professor Ralph Winch and Dean Robert Brooks are building their own houses with their own hands. But such men have special talents and the college had to spend over $200,000 given by alumni and friends for “Poker Flats,” a little apartment building that can house twelve faculty families, and for several smaller houses. All this is quite apart from construction and reconversion for married GI’s.

Moreover, the decline in the interest rate has raised the cost of an adequate faculty pension system. We financed ours before the war by matching teacher contributions of 5 per cent of salary. This figure is now up to 7 per cent, with a longer pension list. In 1939 this cost us $47,115, last year $76,602 — an increase of 60 per cent.

Williams’s budgetary breakdown illustrates the college situation in general: —

Well, what of it? Haven’t college authorities any business sense, any imagination? The first thing likely to happen when there is a shortage of milk relative to the demand is that the price goes up. Why not boost the price of education until academic budgets balance? Colleges and universities have, in fact, raised fees or room rents or both. Williams recently boosted tuition fees 10 per cent. Soon we may have to boost them a little more. But to boost them enough to cover deficits would be no better than, in time of crisis in the milk market, to let the price soar, arguing that those who can’t pay for milk should drink water.

Let us say that a college like ours covered half of its pre-war cost by income from tuition and other charges, and half by endowment income. What happens when costs double and endowment income and enrollment remain fixed? To balance the budget, tuition and other charges would have to be trebled. That would be intolerable.

A college like Williams, with twelve or fifteen applicants for every opening in the freshman class, might in a sense get away with a steep rise in fees. But to cover deficits by increasing fees in anything like the degree to which prices of other goods have risen would be to risk pricing ourselves out of the market for two types of boys by whom we set great store — boys from a distance and boys of limited means. (The needy boy who comes largely on a scholarship might for a time be saved by raising the scholarship grant in proportion, as Williams did when it raised tuition fees.) There are desirable boys who must consider out-of-pocket expenses and perhaps opportunities to earn money. (In a normal year the students at Williams earn over $100,000 towards their expenses in the traditional ways of American college boys.) This figure takes no account of scholarship awards, of which the largest, those from the Tyng fund, cover all needs of a holder. If they have sense, high school graduates also consider the size of the fee paid by the nonemployed, non-scholarship majority of students. For that majority tends to set the character of a college, and if the fees are too high, poor boys may be scared out of accepting scholarships. Indeed, to set tuition fees strictly in economic terms would be soon to make a luxury out of what was for several generations of Americans a staple: decent higher education. That would be reaction indeed, entailing increasing narrowness and educational decay.

Another suggestion, equally dangerous, is made more often. That is to reduce the unit cost of college education by increasing the number of students and not increasing faculty in proportion. To do so would be analogous to “increasing” the milk supply in time of shortage by watering it. It would transform the small college into a large college with a consequent loss of its unique and invaluable contribution to our national life.

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THE chief problem of small colleges today is to hold old teachers and to attract new ones. Graduate schools turned out only a few teachers during the war, and many college teachers quit the profession. Teaching is a pleasant and to a degree self-rewarding job — particularly at places like Williams, we think — but even Ph.D.’s must live in part by bread. College teachers, too, tend to have wives and children, and that requires money, more money than ever before. But while the cost of living has gone up about 56 per cent since 1940, the average rise in college teachers’ salaries has been only about 18 per cent, one third of the over-all rise in pay in the United States. Everybody has heard, and properly so, about the financial troubles of grade and high school teachers. But many younger college teachers with good Ph.D.’s get less than many big-city high school teachers. To balance budgets many college teachers must give summer courses, accept outside additional work, complicate family life by relying on wives’ earnings, or more simply and conclusively, quit the profession. Here is a pseudonymous case in point from the Williams campus: —

Young instructor John Doe wanted to return to us after serving well with the Office of Strategic Services. Although he still had no Ph.D., we offered him our maximum for his rank, $3250. His wife, a former OSS employee whom he met overseas, went to work in a Williams administrative office at $1800. Would they both continue to work and save money to enable Doe to get the additional graduate training needed to go up the academic ladder, or would they have a family? On our salary, they could not do both. A New York bank offered Doe a good salary, and teaching lost a splendid man.

If we were a successful industrial firm, our profits would help us to pay our men what they are worth. But education is not business. We succeed — but without profits. No wonder academic officials have sleepless nights. At any moment the wolf may descend on the fold. We are lucky at Williams. Our pre-war faculty included a large number of men who

enjoyed working together. Esprit de corps drew them back. Moreover, they have hopes that I am going to prove a good money-raiser for Williams, and personal hopes based thereon — a confidence which I find rather frightening. In any case, we still have a solid staff, including thirteen men who quit or declined other jobs paying a total of $103,000 a year to come back at a total of $72,750. Here is a typical case: —

Professor Richard Roe took leave to work as chief of a bureau in a war agency. After V-J Day, job offers rained on him — from several universities, a Cabinet department, a foreign government, a bank, two investment houses, and three industrial corporations — all with starting salaries of $10,000 or more. We were offering Roe $5500. He has a wife, three children, no private income. He wanted to come back to us, but we could hold him only by enabling him to make extra money as a part-time officer of a research foundation.

We have also been able to induce twenty good recent Williams graduates to try out as teachers as soon as they were discharged from the armed forces. And, I must confess, I have seduced a couple of men away from other small colleges. But it has been hard to hold the line. There is plenty of competition for the indispensable man on the teaching end of the log. Before the recent war, some university president would, every couple of years, attempt to raid our faculty. On one Black Friday last Feburary, three of our teachers got university offers at salaries higher than Williams was paying them. Thirteen universities and several colleges, from Massachusetts to Oregon, have recently tried to raid us.

And I have had to stand off foundations, museums, and government agencies, all waving relatively fat salary checks. I have even had to go up against competitive offers from steel, chemical, investment, and banking houses. In one case a teacher who has three small children was offered three times what we were paying him. Of some thirty Williams teachers who had wartime leave, we have lost about one third to post-war competitors who offered more money. Many other colleges have suffered even more, especially those whose salary levels fall below the Williams average ($5250 to $7000 for full professors, $3500 to $5000 for associate and assistant professors, and $2400 to $3250 for instructors). I hope to raise these scales next July.

Early in 1947, I encountered George Stoddard, president of the University of Illinois, which, like all state universities with thousands of veterans enrolled, can happily look to a legislature for bigger appropriations out of taxes. “If you want a thousand good students from Illinois,” he said, “take them and welcome. But if you want someone from my staff, even a junior instructor, you can go to blazes.”

Indeed, the problem basically is not competition among academic institutions. All are in the same boat. American higher education is in danger of losing its best teachers and of ceasing to attract desirable young men unless something is done about salaries. We have a long way to go just to restore the modest purchasing power our teachers enjoyed eight years ago. For the sake of our children and in the national interest, we should do better. To an increasing degree it is our college teachers who finance the institutions out of the sweat of their brows, closing the gap that inflation has opened between endowment income available per student and education cost per student. That cannot go on forever.

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THE condition has already had its bad effects — first of all, in the undergraduate departments of large universities. Harvard’s famous tutorial system has been curtailed. Teachers of popular subjects are often crushingly overwhelmed. In one Midwestern university, some students never see their teacher, who lectures to 1500 in one hall and to an overflow by means of a loud-speaker. In another, a student who wants to question the lecturer must write out his question, hand it to an usher, and wait for the postman to deliver the answer.

By the time that much water is added to the Socratic method of teaching by question and answer, it isn’t worth much. True, the unit cost of such education is low indeed. But what is the unit value?

Williams this year had to deny reluctantly to several students the opportunity to do honors work, which involves special individual instruction. Under existing financial conditions it is difficult for us to go as far as we wish in applying wartime advances in language teaching methods. Some other colleges have had to compromise even further. But they compromise reluctantly, determined to raise their standards again as soon as they can. The misfortune of colleges which are lost inside great universities is that, with rare exceptions, determination is generally lacking from the outset. And even where the determination is found, it must fight a rearguard action.

We want neither to raise our price nor to water our product, but to follow the hard road of principle, maintaining quality and offering it at a price suitable to the average American student, with scholarships thrown in for capable students who need them. That means the third economic alternative, the investment of new capital so that more Grade A milk can be offered at the standard price. Hence the drives for endowments and the transformation of college presidents into traveling beggars.

If the institutions raise the money they want, half will go to improve facilities (new buildings, repairs, new equipment), and a good deal of the rest to raise teachers’ salaries. Income from new endowment would be something over 20 million dollars a year. Even so, the proportion of national income spent for higher education in privately endowed institutions would remain small — about 382 million dollars, less than goes in one year for taxi fares and tips.

Our opportunities are greater than ever before. Through our great universities we can advance knowledge. Through our small colleges, we can spread it, educating men and women for life in a free society, teaching them not just how to earn a living, not just how to solve a specialized problem, but teaching them the supreme importance of freedom and justice. If we are to have peace with freedom and justice, educators must do a better job than ever before.