As the spring semester rolls around, college graduates will be thrust into the workforce. With their pedigree from a fine institution of higher learning, and economy ready to receive them, they will surely be able to find employment! The American Dream, a beautiful one at that. Too bad it really won’t apply to most graduates.
According to the Federal Reserve Bank of New York, 44% of college graduates are underemployed, or working in jobs that they don’t need a degree for. College was originally only available to children of immense privilege. To some degree, that is still true. College Board has determined that a “moderate” budget at a private college for the 2013-2014 academic year is $44,750. With the cost of education often so high and the process of applying so meticulous, many potential students whose parents aren’t formally educated can’t assist them in applying to or attending college. Still, we have made great strides in including people from multiple countries, races, socio-economic classes, and religions into higher education. This, broadly, should be applauded. But the method in which it has been done should not.
College is a business, first and foremost. Let’s look a portion of the financial statements of a mid-sized college to prove this:
Without getting bogged down in this statement (it doesn’t help that most college programs probably don’t instruct students how to read this anyways since college doesn’t teach you much of anything practical anymore), let’s focus on the most important part: operating revenues, specifically, tuition.
It’s the first item, since it’s the largest, and largely explains the way college works the way it does. Between tuition and fees, schools take in $350,262,879 in net revenue. This is revenue after they factor in all the scholarships awarded. Now their operating revenue may be $471, 543,898. However, their operating expenses are $437,121,562. What does this mean? They’re only turning a bit under a 10% yearly profit. Being that tuition is the largest item, this means they can’t afford to lose many students at all. To put this in perspective, given this college’s tuition, if they lose 1,000 students from 2012 to 2013, (given there are twenty five thousand of them, that’s not really hard at all) they’re in the red and running a deficit.
Taweh Beysolow is a Young Voices Advocate and has published articles with the Washington Times Communities on economics and domestic politics. He has interned as a proprietary stock trader at T3 Trading in the financial district in Manhattan, NY. In addition to his academic studies within the school, he currently is starting to compile research in the field of economics with the intention of submitting it for publication.
Taweh has studied with NY Philharmonic bass clarinetist Amy Zoloto as well as esteemed recording artist Lawrence Sobol, as well as performed with the New York Youth Symphony. He works extensively with student groups in the NYC Metropolitan area while pursuing a degree in Economics at St. John’s University.