The rising cost of college has dissuaded many from pursuing a degree and caused millions more to go deep into debt. One important factor contributing to this trend is the amount many institutions spend on intercollegiate athletics.
About twenty large universities, such as Penn State and the University of Alabama, have successful football teams that generate enough profit to pay for all the men’s and women’s sports programs. The intercollegiate athletic programs of more than one thousand other schools lose money and need to be subsidized, usually by mandatory fees charged to all students, whether they are participants, spectators, or indifferent to sports.
The fees are usually lower at large universities than at small colleges. Some large universities have football teams—and a few have basketball teams—which generate a profit and support a part of the remaining athletic budget. All other men’s sports and all women’s sports—except maybe University of Iowa Women’s basketball—lose money. A Football Bowl Subdivision (FBS) program, which generates a profit, offsets some of the losses of other sports and reduces the amount of money from student fees and other institutional support needed to pay for the sports programs. In addition, successful football programs are usually at large public flagship universities with very large enrollments, so the cost of subsidizing sports is spread over tens of thousands of students, thereby costing each student less. At the University of Virginia, with 16,000 students, the mandatory intercollegiate athletic fee is $720 per year, and at Virginia Tech, where there are 28,000 students, the mandatory fee is $384.
The College of William and Mary does not have a lucrative football program and has less than 9,000 students. The mandatory fee is $2,177. The school contributes another $250 per FTE student as well. That comes to almost $10,000 per student over four years just for small-time intercollegiate sports. The average debt of a William and Mary graduate is $35,500, so just over a quarter of that is due to intercollegiate athletics.
Longwood University is a public institution with 3,500 undergraduate students. It has no football program. The annual mandatory student fee for intercollegiate athletics is $3,197. The average amount of loans taken out by first-year students at Longwood University is $7,262, 44 percent of which is directly attributable to intercollegiate athletics fees. And that’s for Longwood University sports.
The cost of upgrading an athletic program to the top tier is astronomical. Rutgers University has borrowed over a quarter of a billion dollars to try to compete with Big 10 powerhouses. That money has to come from the students directly or from other funds that are diverted from their benefit.
No discussion about college sports is complete without mentioning Title IX. In 1972, Congress amended the Higher Education Act to prohibit exclusion from educational programs based on sex. The amendment did not mention sports, and there is no indication that it intended to affect college sports.
The NCAA has interpreted this law as saying there cannot be an economic justification for favoring profitable teams. So, while men’s football and sometimes basketball programs are the economic engines that drive the train, they cannot get preferential treatment with respect to less lucrative sports. The number of scholarships and quality of facilities must be the same for men and women. To field a Division I FBS team, by NCAA rules, a college must give 76 to 85 football scholarships. To be compliant with Title IX, a school must also have an equal number of scholarships for women’s sports. If a school didn’t have those before Title IX was initiated, it had to add those scholarships. It has cost a lot of money to do so.
I am not rendering a judgment as to whether Title IX is good or bad. Airbags have made cars much safer, but they have added to the cost of the car. Adding women’s sports, essentially none of which turns a profit, means that, somehow, the institution must come up with millions of dollars to pay for them. In most cases, the cost has been passed on to students in the form of higher mandatory fees.
Colleges and universities, which are rated highest for enabling large numbers of students to climb the economic ladder, according to the Mobility Report Card by Chetty et al., do not spend large sums of money on athletic programs. City College of New York spent $57 per student per year on intercollegiate sports. Low student spending on intercollegiate sports is not the prime reason for improved social mobility, but, in many cases, it is a necessary condition that must be present for it to take place.
With rare exceptions, spending on athletics adds significantly to the cost of a college education, even though it is not one of the stated missions of colleges and universities. It is a luxury imposed upon students, causing many to go deeply into debt while pricing countless others out of pursuing a degree.
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Add on the donor funds diverted to athletics because athletic departments attach concrete benefits – like parking privileges and ticket preferences – that are not available to academic-side donations. THEN many schools turn over all licensing and even bookstore revenues to the athletic department. Purdue sells parking permits to staff and students and then tickets them if they park in permit spots on gamedays so that the athletic department can gain extra revenue reselling use of the spaces. Schools also are notorious for covering administrative costs such as HR or purchasing services as well as routine facility maintenance services (landscaping, janitorial, garbage) and utility costs out of non-athletic funds. The spouses of coaches are often hired for faculty and staff jobs without an open position as well. When I was teaching, we ended up with the football coach’s wife as a professor without even an interview, much less an open search – at a time when the department was denied a faculty lines for an environmental epidemiologist and a physiologist that we actually needed – paid out of academic funds.
The problem with quoting list prices is that BC — Before Covid — there was an industry-wide average discount rate of 47% and, if anything, it’s higher now.
What a 47% discount rate means is that collectively, the average of what students actually pay is only 53% of what institutions claim they charge. The adjustment is often made via the awarding of “institutional scholarships” and “institutional financial aid”, along with things even more convoluted, and the 47% rate (figure accurate as of 2019) is industry-wide and varies amongst institutions.
Now let’s keep the numbers simple here and presume that the mandatory sports fee is $100 per student — it’s more, and even more than that because of cost shifting.
So on paper, the student actually pays $53 dollars of this $100 fee — but that doesn’t mean that the athletic department actually gets $53 — although it might. It’s also possible that the athletic department gets less, that the fee (like the cost in general) is inflated so as to increase the perception of value. (This is part of how colleges have a list price higher than what they ever intend to actually charge — parents will perceive a $30,000/year college as “better” than a $15,000/year one, and then think they got a bargain in “only” paying $15,000/year for it.)
What is more likely to happen is the athletic department getting the whole $100 with the $47 coming out something else, usually academics. People overlook this and then wonder why they can’t get the classes they need.
And then there are all kinds of cost shifting. Public institutions can issue tax-free bonds which means that the state taxpayers are subsidizing the athletic facilities via lost tax revenue. Sports stadiums consume a LOT of electricity for lighting, not to mention HVAC (heating, ventilation, & Air Conditioning) and even if the latter (including AC) is provided by steam from the institution’s steam plant, the steam isn’t generated from pixie dust and unicorn flatulence — the institution has a hefty bill for the oil or natural gas that they are burning to produce that steam.
And this is just the start of the cost shifting.
My point is that I don’t think anyone really knows how much the NCAA sports are really costing higher education, but it’s a lot.
The author does not suggest an answer, but here’s one possibility. Schools that want to spare their students these costs could simply abolish athletics. (There might be some problems with debt on facilities, but let that pass). These schools could advertise this, and see how well they do at attracting students. Another thing to look at would be the effect, positive or negative, on charitable giving for academics.
This presumes that (a) schools are serious about reducing student costs and then (b) are willing to advertise that. The problem is that (a) parents relate cost to perceived value, and (b) schools want to “capture” all the Federal FinAid money possible, and it’s awarded on the basis of list rather than actual price.
You raise a legitimate point about charitable giving, and I will throw in recruitment, a *winning* sports team does help with both, but remember that it is mathematically impossible for the majority of teams to even go to the national championships, let alone win there.
I do vaguely remember a regional college advertising that “we don’t have a football team, but our average graduate starts at $XX,XXX.”
Your point about perceived value is a good one. In fact, net tuition has actually been going down (slowly) for years, after adjusting for net tuition and inflation. Ditto with student loans. Very few people are aware of this, and the colleges are not exactly broadcasting it, for whatever reason. But for some reason, people like high list tuition, and then they complain that it is so high. They like high pricetags and then a good discount, instead of low everyday prices. Go figure.
I’ll stick to my original statement. If the “customers” are too dumb to understand this, well then, that is just the “market” telling the colleges that the customers are, what, too dumb to go to college? No, they’re right!