The Cost of a Year at New York University

The estimated total cost of attendance for an on- or off-campus student attending N.Y.U. over the 2022-23 school year is $83,250.

From Here.

This cost is baffling to me.  How can it cost a single student what a single professor makes in a year?  And what do they mean “on or off” campus?  Surely, room and board is a big chunk that can’t be “on or off”?

Let’s imagine a university that awards degrees in History, English, Sociology, Psychology, Art, Music, Business, and Economics.  Let’s imagine it has 1,000 students.  Let’s call it Jester College.

In my imaginary university, let’s have 20 professors.  I know, I know– there would be many different professors for different specialties at a real university.  Bear with me for a moment.

The 20 professors each earn $100 K.  Not extravagant but not unbearable.  So our annual budget for salaries is $2 million.   Let’s say each of them has to work really hard and teach three classes.   That’s 60 classes of an average of 17 students each.

The cost per student for salaries would be about $2000.  Of course, that doesn’t include the cost of administration or rent or utilities or mascots.

Of course, that’s a silly amount.  The buildings would cost a lot and we have a president and a dean and so on.   But the cost of the essential service of a university is $2,000.

Let’s say Jester University acquires some land for $6 million and builds dorms at about $60 K per unit for about 600 of the students.   Thirty-six million dollars.   Of course, the money is borrowed, so let’s allocate $162,000 a month or $1.9 million a year for the dorms and roughly $1 million for the land.

We still have students paying $4,000 a month to cover the cost of land, dorms, and professors.  The classroom buildings will cost quite a bit less than the 600 units of the dorms.   You need a gym and a library.

It’s all crazy of course.  I’m just trying to imagine some genius entrepreneur coming along and looking at the costs of university education and deciding he could make a lot of money by offering the same basic service for a lot less than $82K.

All you need is a qualified professor, a class-room for each session of each class, a dorm for students to live in, and a few other ancillary items for education to take place.  The students go to class, listen to the professor, go to their dorm rooms and study and go into town for a beer or pizza or hang out at the gym or the library.

Jester U.  doesn’t offer chemistry or biological science because it’s too expensive to build the labs.  You can go to New York University instead and pay $83K for the privilege.  But a lot of academia consists of reading and writing and studying and testing and that can all be done a lot more cheaply than $82K.

Why doesn’t someone do it?

Because students are generally unsophisticated and willing to take out gargantuan loans to pay what Universities demand, the Universities’ demands are based on costs that have very little to do with providing the essential service that students used to go to Universities to receive.

Let’s say that those 1,000 students each pay $10K in tuition, room, and board, per year.  That gives us an annual budget of $10 million.   How does this get to $82 million for New York University?

Go ahead and get a lab and lots of other stuff.  Let’s double it: now you have $20K.

I know: this is ridiculous.  I’m sure there are other expenses I am not accounting for.  But I’m also sure that a lot of those expenses aren’t really necessary or essential or important.  They are part of the established bureaucratic structure of post-secondary education in 2023, and very, very hard to dislodge.  You have deans and financial officers and accountants and secretaries and clerks and heads of departments and so on.

I would suggest you could jettison a lot of them and still provide a solid post-graduate degree to most students.

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