Duke: $60,000 A Year For College Is Actually A Discount : Planet Money "We're investing on average about $90,000 in the education of each student," says a university official. Where exactly is all that money going?

Duke: $60,000 A Year For College Is Actually A Discount

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It's MORNING EDITION from NPR News. I'm Steve Inskeep.


And I'm David Greene. Good morning. Okay, the cost of tuition plus room, board and fees at some of the most expensive colleges and universities in this country has now surpassed $60,000 per year. Talk about sticker shock for many students and parents.

INSKEEP: Here's the answer from some elite institutions: Educations, they say, cost a lot to provide. In fact, some universities claim they spend so much on students that $60,000 is actually a discount.

GREENE: Our Planet Money team wanted to check out that claim, asking just how elite schools are spending their money. Turns out it's sometimes hard to see the direct connection between the money you spend and the education you get. Here's NPR's Lisa Chow.

LISA CHOW, BYLINE: Sixty grand a year is a discount, says Jim Roberts, executive vice provost at Duke, because it doesn't cover the full costs of an undergraduate education.

JIM ROBERTS: We are investing on average about $90,000 in the education of each student.

CHOW: And a lot of elite research universities like Duke tell the same story: We're paying way more per student than we're collecting. So I asked Duke to show me where all that money, that $90,000 per student, is going.


MICHAEL SCHOENFELD: This is the last part of a renovation of the library.

CHOW: Michael Schoenfeld is vice president of public affairs at Duke and takes me on a tour of the campus. A lot of money goes into the school's facilities. Duke recently renovated its student center and the dining hall is also in the middle of a big renovation.

SCHOENFELD: For the first time in probably anybody's memory, there will be two cranes hovering over the main campus quad.

CHOW: So students are paying a share in the costs of this physical infrastructure - building it, heating it, and making sure the lights stay on. Beyond that, they're paying a share of administrative salaries, which in Duke's case includes more than $1 million to the university president. There are dorms, food and health services and then a big chunk of money goes to a particular and sizeable segment of the undergraduates at Duke.

TARA MOONEY: I joke around, like, I call them normal people.

CHOW: When you say normal people, so the normal people are people who are people like you.

MOONEY: Getting financial aid. That's what I consider normal people. Yeah.

CHOW: Tara Mooney is a sophomore and one of the roughly 50 percent of students who receive finance aid. Most financial aid recipients have to repay a portion of their aid, which comes in the form of grants and loans. Mooney is an extreme case. She's one of 500 undergraduate students who pays nothing at all, separate from those receiving a full ride because of merit and athletic scholarships.

Mooney's parents are divorced and her mom raised her, her brother, and sister alone. Right around the time Mooney was applying to college, her mom lost her job at a public school.

MOONEY: My mom, when I first got the admissions email, we were all very excited and stuff, but when we saw the aid package is when my mom and I started crying, because we knew that I could actually come here. Because they were going to give me enough money that it was actually possible.

CHOW: Peter Lange is Duke's provost. He's second to the university president and this is a point that he stresses. That $60,000 price tag, not only is it not enough to cover all the costs of an undergraduate education, half the people at the school aren't even paying it.

PETER LANGE: For those who are paying full freight, the full sticker price, their tuition dollars are supporting students who otherwise could not afford to come to Duke.

CHOW: And so now we've arrived at the biggest category of costs: faculty. People like this.

JENNIFER WEST: We've been snowed in now since about Wednesday afternoon.

CHOW: I caught Jennifer West at her home in North Carolina during last week's snowstorm.

You've published in more than 150 peer reviewed journal articles and you hold 14 patents.

WEST: Mm-hmm.

CHOW: And you've won a ton of awards: Texas Innovator of the Year a couple of years ago. You won...

West is a highly sought after academic superstar - a professor of bioengineering and materials science with a long list of publications, awards and titles.

You've been named an admiral of the Texas Navy.

WEST: Yes.

CHOW: What's that about?

WEST: So that's the highest honor the Texas governor can bestow on a civilian.

CHOW: To hire West away from all the other people who want to hire her and dislodge her from her former employer, Rice University, it wasn't enough just to offer her lots of money. She came with an entourage.

WEST: I moved a whole entire research group with me, so I had to move a lot of people and then we had to move a lot of our equipment and rebuild our lab.

CHOW: So they actually built kind of a lab from the ground up for you?

WEST: Mm-hmm. Yeah. So they actually sent architects to Rice who looked at our lab facilities there, then used that information to go back and design the facility that would work for us at Duke.

CHOW: And West is not alone. Duke pays what it calls startup costs for a lot of professors, particularly in the sciences. And decisions about hiring faculty can drive up costs in other parts of the university. Duke considers a lot of that spending, when it says $90,000, is what it costs to educate an undergraduate.

Charles Schwartz, though, takes issue with this way of accounting. He has been studying university finances for the past 20 years. He's a retired professor from the University of California at Berkeley. He says it's not fair to put what Duke pays professors like Jennifer West onto the undergraduate students. Think about where West spends most of her time - she's in the lab. She's guiding the work of graduate students, the next generation of researchers.

CHARLES SCHWARTZ: If you want to know what's the cost of providing undergraduate education, it's just wrong to bundle all those costs together and present that. But that's what's done by Duke University, by the University of California, and as far as I can tell, by all other top research universities throughout the country.

CHOW: Schwartz says the real cost of an undergraduate education - that is, if you take out all the costs associated with the professor's research and time spent outside of teaching undergraduate students, that cost is actually less than what the undergraduate student pays, not more, which is what Duke and many schools say.

Peter Lange, Duke's provost, disagrees. He says Duke professors engaging in research benefits the undergraduate students.

LANGE: If, for instance, you try to say, well, nothing about the time the faculty member does research redounds to the benefit of the undergraduate when he or she is in a classroom, then I guess you can do the accounting a completely different way. I think that's a deep misunderstanding of how - at least at a place like Duke - how the actual educational delivery happens.

SCHWARTZ: People talk about getting undergraduates involved in the research program and as a research professor standing before an undergraduate class and talking about your research and isn't this wonderful?

CHOW: Again, Charles Schwartz from Berkeley.

SCHWARTZ: I have mixed feelings about that. I don't want to completely dismiss it but I really want to ask the question is that a reason for charging more? Making the undergraduates pay for that?

CHOW: Schwartz doesn't deny the value of research. It helps advance the human condition, discover new technologies, find cures for cancer or, in Jennifer West's case, grow transplantable organs from a small sample of cells. But Schwartz questions how much undergraduates benefit from all of that.

SCHWARTZ: I don't want to argue against people who say, well, it's worth it to have my kid going to Harvard, or Princeton or Duke because, oh, the diploma will look nice and they'll make contacts with other important people, help to advance their careers. You know, interesting considerations, but that's not education.

CHOW: In the end, Schwartz, and Lange from Duke, don't disagree on the value of what goes on at places like Berkeley and Duke. Schwartz is fine with buying a great researcher a new lab. The disagreement is over the story that a place like Duke tells its undergraduates about that lab. So if you're a student at Duke, are you getting a massive discount on the cost of your education? Or are you subsidizing a giant educational edifice that you as an undergraduate student will barely come into contact with?

The answer sort of depends on what kind of student you are. If you're the type of student who is engaging professors on their research, maybe you're working in their lab or working on a senior thesis and capitalizing on your professors' expertise, if you're that type of student, maybe you're getting something that's worth more than what you paid.

If you've got a good financial aid package, you're definitely getting a deal. But if you're a full-paying student, who's not learning much from professors outside the classroom - and let's be honest, that's a lot of people - it's the university that's getting the deal. At least, when it comes to money. Lisa Chow, NPR News.


GREENE: And you're listening to MORNING EDITION from NPR News.


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