July 6, 2011 10:24AM

Colleges Bloated with Money? Some of Us Already Knew

By Neal McCluskey

Inside Higher Ed today released the results of a very telling survey of college business officers. From IHE’s article on the survey:

About one in six business officers at both public and private nonprofit colleges described the financial health of their respective institutions as “excellent,” and another 57 percent of public‐​college CFOs and 47 percent of private‐​college CFOs characterized their respective institutions’ financial health as “good.”

That’s right: Despite the continuing negative effects of our economic malaise, the financial sky is not crashing down on the Ivory Tower — far from it! Perhaps most interesting is this quote from Kent John Chabotar, president of Guilford College and a former CFO at Bowdoin College:

Many of my financial colleagues think that the academic program is over‐​budgeted and sometimes even bloated, so cuts may seem to them to be restoring the proper balance.

What? “Bloated”? What about the devastating penury schools are supposedly suffering?

To be fair, as Chabotar goes on to note, financial officers have an incentive to say all is well, lest they seem to be less than stellar money managers. But we know — or at least you do if you’ve read “Federal Higher Education Policy and the Profitable Nonprofits” — that there is very good reason to believe colleges are, indeed, flush with cash: Many make big profits — from $2,000 to perhaps as high as $13,000 per student — off of undergrads. And how do they do that? Primarily through taxpayers, who furnish massive subsidies in the form of aid to schools and students. So many academic programs most likely are bloated.

Of course, many schools and higher education associations would likely disagree with that. And if nothing else, we at the Center for Educational Freedom love a debate. That’s why on July 19 we will be hosting a forum to discuss high profits in “nonprofit” higher ed, an event that will feature Vance Fried, author of “Profitable Nonprofits”; M. Peter McPherson, President of the Association of Public and Land‐​grant Universities; and Grover J. “Russ” Whitehurst, director of the Brown Center on Education Policy at the Brookings Institution. Register here if you want to attend in person, or watch online from the comfort of your own desk.