College, university costs could force schools to close, Notre Dame CIO warns
Tuition-dependent institutions with middling reputations at risk
One of the most successful CIOs in American higher education told FOX Business' Gerry Baker on "WSJ at Large" that rising costs will force more colleges to close their doors.
“There is a shakeout for sure,” University of Notre Dame vice president and CIO Scott Malpass said. “Some of the more tuition-dependent and middling-reputation institutions are starting to go out of business, and we will see more of that.”
Malpass, who oversees the university's $13.8 billion endowment, the ninth largest of any private university in the U.S., said institutions with a solid financial base aren’t at risk.
“The more elite schools that have resources are in terrific shape,” he said. “And, in many ways, more accessible than ever before because of the resources.”
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Malpass has been in this position for more than 30 years, helping the school's endowment grow from $453 million in 1988 to what it is now. He noted that even though the financial requirements for students are soaring, with annual costs estimated at about $25,000 for in-state public schools and double that for private ones, those institutional resources are critical to helping pay for what the schools offer.
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"The cost of educating a student is much higher than the price,” he said. “We pay about two-thirds of the cost.”
In turn, he said the colleges have to look elsewhere for cash.
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“We have to raise money," Malpass said. "We get grants and contracts. We go to the endowment fund. There’s other revenue sources: Athletics. But, it’s expensive. Quality is expensive.”
But Malpass argues it’s absolutely worth it.
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“There is tremendous value to just getting a college degree in general,” he said. “The statistics show that your lifetime earnings are significantly higher than those who don’t. And then, if you go to a school like a Notre Dame or some of the Ivy League schools, that gap is even wider because you get opportunities that other kids just don’t see.”