The Maleficent Gordon Gee and His Malfunctioning Money Machine

Andrew Donaldson

Born and raised in West Virginia, Andrew has been the Managing Editor of Ordinary Times since 2018, is a widely published opinion writer, and appears in media, radio, and occasionally as a talking head on TV. He can usually be found misspelling/misusing words on Twitter@four4thefire. Andrew is the host of Heard Tell podcast. Subscribe to Andrew'sHeard Tell Substack for free here:

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28 Responses

  1. Jaybird says:

    The question “What is the point of a University?” is likely to get different answers from different groups of folks out there.

    I imagine that most people will probably answer something like “education, degrees” and that sort of thing. “Take a high school graduate and turn him or her into a college graduate.”

    The people in charge of the Universities seem to think that the answer is something else. Something else entirely. “Maintain an endowment.” “Get donations to the university.” “New prestigious buildings.”

    Maybe those can coexist when the students walk away from university saying “My degree was worth what I paid for it.”

    We’re going to start having a problem when enough people start saying “My degree was *NOT* worth what I paid for it.”

    When that happens, Gordon Gee and his ilk will have a reckoning when they answer the question “What have you guys been doing these last few years?” and the answer has *NOTHING* to do with degrees or turning high school students into college grads.Report

    • Marchmaine in reply to Jaybird says:

      Strangely, I don’t think the ‘value’ of a degree is the driver or fulcrum of the issue.

      It’s much more simple… Universities hit a bubble period of financial growth and it became very clear that spending those $$ was worth the effort of gaining control of those $$ so you could direct where the $$ would be spent.

      The cause of the financial bubble is one discussion, the spending and control of the financial bubble is another one that is only tangentially (usually) related.

      Honestly, the proper word for the Education bubble is Grift… we throw it around alot for the other side, but Grift is what Grift does.

      The ‘popping’ of the bubble may or may not happen — from the folks I know in Higher Ed Administration, there’s no particular fear the Harvard, all the well endowed (tee hee) privates with fancy names, or even WVU will go under… but the demographic and financial turns could nuke quite a few small to mid-sized colleges and universities. Which is just to say that the grift will continue and that the consolidation will perhaps make it even worse.

      I’ve seen and discussed the economics of Higher Ed at the simple Tuition = Faculty scenario… and let me tell you, it’s a terrible business model. An almost unsustainable model. Fantastical financial fiascos that we’re seeing with the endowed Universities? Purely an example of too much money available for use outside of the core mission. Or, put another way, a grift of changing the core mission because you have the $$ to do so.Report

      • Jaybird in reply to Marchmaine says:

        So the consolidation of the universities following the implosion of the dinky ones that suck will keep the game going for a while? Even as more and more say “my degree wasn’t worth what I paid for it?”

        Ugh. I could see that happening.

        Might kick the “I know what *I* thought the core mission was… what did *YOU* think it was?” conversation down the road a ways.

        Maybe even sustainably. If the Chinese and Indian full-tuition folks still keep showing up.Report

      • Michael Cain in reply to Marchmaine says:

        Fantastical financial fiascos that we’re seeing with the endowed Universities?

        My undergraduate school (a state R-1) has the unusual arrangement that the endowment is held by a separate non-profit. Call it the Foundation. The Foundation was established early on by an alumni who wanted to leave money for the benefit of the school’s mission, but didn’t trust the elected Regents or the hired administrators. The Foundation and the Regents/administrators regularly butt heads over how money should be spent. I almost always find myself on the side of Foundation when that happens. They seem much more concerned about the students and faculty.Report

    • Brandon Berg in reply to Jaybird says:

      We’re going to start having a problem when enough people start saying “My degree was *NOT* worth what I paid for it.”

      We’re moving in the opposite direction. Once again, I refer you all to the College Board’s Trends in College Pricing and Student Aid report. Note Figure CP-9. Inflation-adjusted net (i.e. what students actually pay) tuition and fees for 4-year public universities peaked a decade ago at $4,060 (in 2022 dollars), was down to $3,130 in 2019, and was projected to be down to $2,250 last year. With room and board, it’s $14,560, but housing is expensive, and you need to pay for that whether you got to college or not.

      Figure CP-13: Public universities get $15,150 in revenue per undergrad student, only 40% of which comes from tuition. SA-1: Loans trending sharply down for the past decade, grants going up, up, up for two decades. That chart specifically says federal loans, but SA-2 shows that undergraduate educations are increasingly funded by grants rather than loans. SA-6: Aggregate loans issued have been declining for over a decade. SA-9B: Average annual loan per undergrad is $6,440 per year, and down from 10 years ago.

      SA-14A: Only 54% of 4-year graduates from public and private non-profit universities take out any loans at all, and for those 54% only, the average debt is $29,100. Note that both the percentage and the average are down from 2010-11, after adjusting for inflation. It does say that Parent PLUS loans are not included, but those are a small share of all loans, and they are also trending down over the past decade (SA-1).

      You know what else is about $30,000? The college wage premium. The median full-time worker with a bachelor’s degree made $1,334 per week in 2021, $525 more than the median high school graduate. 52 * $525 is $27,300.

      And with income-driven repayment, a lot of those loans are never paid back in full. It’s commonly claimed that student loans are “predatory,” and for undergrad loans that’s actually true, but the prey are taxpayers, not borrowers.

      This whole narrative we’re being fed about skyrocketing college costs and how you need to take out six-figure loans to have a chance at being in the middle class has no basis in fact. It’s lies, lies, lies. The vast majority of student loans are manageable, with servicing costs being a small and shrinking fraction of the college wage premium. This is a totally reasonable sum to require college students to contribute to the cost of their educations. This just isn’t a real issue. People want their loans cancelled because people like getting free money, not because they legitimately got a raw deal.

      An important caveat here is that a lot of Master’s programs actually are kind of scammy and not subsidized like undergrad degrees are, and as a result they sometimes are not worth the much larger loans you have to take out to get them. But the takeaway here is that you shouldn’t get a master’s degree unless you have a realistic plan to make it pay off, not that college is a bad deal or that a huge giveaway to student loan borrowers is warranted.

      Also, this is not to say that universities aren’t spending too much money, just that undergrad students aren’t the ones funding it.Report

      • Jaybird in reply to Brandon Berg says:

        The big problem is that the A+ #1 group of folks who happen to have degrees that cost more than their current lifestyle affords *AND* who happen to have the biggest megaphones are, tah-dah, THE JOURNALIST PROFESSION!!!

        And, on top of that, they’re probably more likely than most to rub elbows with postgrad folks who have a mortgage payment for their degree instead of just a car payment for it.

        So we get stories like the one about the guy who got a Masters in Marionette Arts and can’t pay it off or those perpetual stories about power couples in Manhattan who make $450,000 but can only barely make ends meet after rent, two electric vehicles, student loans, 401K, Roth, vacations, going out to eat, and entertainment.

        So the dominant narrative is “college costs more than what it is worth”.

        But college costs a *LOT* more than it did even back when I went to a commuter college here in town.

        And that seems like there are serious shenanigans going on despite the fact that a Philosophy Degree is likely to have you earn millions more over your lifetime than the poor schlub who only has a GED.Report

        • InMD in reply to Jaybird says:

          I think any discussion needs to account for the truth of the baseline reality Brandon is referencing: graduating from at minimum an ok public college correlates strongly with what could broadly be called ‘good economic outcomes.’ We ignore that at our peril. So we can probably dismiss the more ridiculous media narratives on the subject. However I would very much caution that it doesn’t mean we can conclude that all is well with the way we’re funding this and in particular how the subsidies and risks are being allocated.Report

  2. Philip H says:

    I spent my growing up around university professors and university administrators. They literally put food on my table.

    While some are indeed as you describe, nearly all (I’d wager north of 90%) actually do care deeply about student outcomes. They seem the endowments and research portfolios as a means to supporting that end. Especially at state run R-1’s.

    And he’s actually got a point about cuts before funds – legislators in red states have along, and infamous, history of not only refusing to keep up with things like routine building repairs, fully funding faculty lines, refusing to increase pay and benefits for admin staff – the list goes on. Those legislators (nearly all graduates of state universities in those states) don’t believe in taxpayer funded education. So even if he didn’t have the history he has (which makes you wonder what the WVU search committee was thinking), cutting first is probably the path he has to take to get more funding.

    It’s ugly for sure, but he’s a bit of an outlier best I can tell. If West Virginia wants world class universities, they will have to pay for them, and he’s then going to be the least of their problems.Report

    • Two points to the funding issue that is relevant to the specific situation here: WVU’s state funding is less that 10% of its budget, and the WV legislature just last week outlayed $45M – not coincidentally the exact amount of WVU’s “shortfall” out to Marshall University, another in state albeit private school but one with effective, competent leadership. The legislature would write a check, they aren’t going to write a check for Gee blaming them for a mess he himself made. And understand, I can’t stand this version of the WV legislature on most things.Report

  3. Michael Cain says:

    Gee does seem to be in a class by himself. Over the many years now, I don’t recall ever reading a piece saying the students and faculty at any of the schools he ran were better off when he left than they were when he arrived. But he always seems to find another gig.Report

    • Jaybird in reply to Michael Cain says:

      I suppose I can see how Ohio State might have been impressed by how he was in charge of Brown.

      And I suppose that I can see how WVU was impressed by a resume that had Brown and OSU on it.

      At this point, I think that we might be out of suckers.Report

      • Michael Cain in reply to Jaybird says:

        I guess there’s a knack to it.

        I knew a man at Bell Labs who raced up the management chain. He was a genius at fiber optics. He knew nothing about software and was uninterested in learning. He finished his Labs tenure heading the organization building a very large project that absolutely depended on software. Rumors when he departed were he was offered the choice, “Resign and we’ll write a glowing recommendation; stay and you’re demoted two levels.” The first thing his replacement did was announce a complete software overhaul and a one-year schedule slip. The fiber guy ended up at another giant telecom, running another very large project, that failed after three years because of the software. Then I ran into him again at a piece of the broken up Bell System, where he was in charge of a very large project that… yep, failed catastrophically because the software didn’t work.Report

        • Jaybird in reply to Michael Cain says:

          Asymmetrical information can be used to great advantage.

          I don’t know that there is enough information out there to keep Gee from getting a gig at Compass Direction State.

          But it seems like there is enough to be able to ask the board “How did you not know this?” afterwards.Report

    • LeeEsq in reply to Michael Cain says:

      The Peter Principle at work.Report

    • DavidTC in reply to Michael Cain says:

      He’s just doing the same grift that a large amount of extremely-well-connected Ivy-League-graduate white men do, where they constantly fail at being the CEO of places, constantly slashing costs and destroying the companies in the name of profit while getting extremely well paid and using the company as a personal ATM on top of that. And somehow this is a good thing and we should keep paying them to do it. and they get to keep failing upward.

      He’s just doing it in education instead of the business world. Which on one hand, has resulted at the scale of the grift reduced to a tenth (This sort of thing would be making him $20 million easy in the business world.), but, OTOH, he doesn’t even have shareholders who might complain. (Just students and faculty.)Report

  4. Saul Degraw says:

    Gee’s Brown University package seems quaint now. A lot of University Presidents at the bigger universities seem to be compensated almost as well as CEOs for Fortune 500 companies. Also remember that the highest paid state employee in many states is often a football or basketball coach: https://www.reddit.com/r/MapPorn/comments/lnir2v/oc_the_highestpaid_public_employee_in_every_state/

    Imagine what would happen if you called for the end of D1 college sports, you would probably get run out of town and that is if you are lucky.

    Universities used to be run by the professors. Professors decided they hated admin and were not good at it and outsourced it to professional administrators and now we have administrative capture. Though I do think you probably need some professional administrators because of Federal programs and regulations, a good number of universities seem to take it to an extreme degree.

    That being said, I will agree with Jaybird for once. The United States does not have any sort of agreement on what the purpose of education is and therefore does not have a discreet educational policy. To the extent that any side has “won” the debate, the practicalists seem to have the upper-hand. Rising tuition and other factors cause many parents and students to focus on allegedly practical degrees which will give them a hands-up in the job market. This is mainly business, technology, and engineering degrees.* So in tough and not so tough times, the arts and humanities will always be seen as targets and have been for a while except at the top of the top universities.

    *Let’s be honest, politicians do not really want more pure mathematicians unless they become quants on Wall Street after graduation or somehow can use it to find petrochemicals for exploitation. When politicians discuss STEM, they mean technology and engineering in the name of Mammon.Report

  5. North says:

    This is also the main challenge for educational funding and student debt problem issues in a nutshell. University administration has ballooned enormously over the decades. I grant Philips’ comment upstream that the people who work in university administration mostly mean well- I am willing to believe they have no ill intent- but that doesn’t change that a lot of them are likely mostly deadweight on their institutions regardless of whether they mean well or not.

    As long as higher ed is a black hole of inefficiency and money diversion on one side bracketed by corporatism, elitism and endowment servicing on the other there’ll never be a strong constituency in favor of throwing more money at it or in favor of paying off student debts (which is simply throwing money at higher ed in a more convoluted manner). That’d remain the case even if higher ed wasn’t also strongly partisanly sorted, but it is strongly partisanly sorted, so it’ll be even worse.

    I suspect/fear it’s going to take a proverbial forest fire to clear the deadwood out of higher ed though. The current demographic shift could do it.Report

  6. LeeEsq says:

    People on the broad left in the United States have this fantasy that you can totally get rid of the Oxbridge characteristics of American higher education and turn everything into a Spartan U totally dedicated to learning. They also believe that gutting the practical majors would be popular and everything could be the fine arts, humanities, and sciences with no more business or communications. Like my brother wrote above, good luck with that. What really needs to happen is that the administration needs to receive big pay cuts and have their money spigots turned off.Report

    • Michael Cain in reply to LeeEsq says:

      I notice you’ve left out the quite large number of students covered under “engineering” here. It’s not the same as “science”. I can live with all of those disciplines being classed as a four/five-year trade school. It’s not my preference; I enjoyed being at a university that included fine arts, humanities, and social sciences.Report