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Fees assessed on business courses to boost faculty salaries

November 4, 2003


It is ironic that as state support for higher education shrinks, business faculty salaries are expanding at an unprecedented rate. Across the country, business faculty earn an average of 41 percent more than faculty members in other disciplines.

Two factors that seem to be driving the increases are fewer graduates from doctoral business programs and lucrative opportunities in the private sector.
November 4, 2003


It is ironic that as state support for higher education shrinks, business faculty salaries are expanding at an unprecedented rate. Across the country, business faculty earn an average of 41 percent more than faculty members in other disciplines.

Two factors that seem to be driving the increases are fewer graduates from doctoral business programs and lucrative opportunities in the private sector.

Recruiting and keeping quality business faculty have become particularly strong challenges for public colleges, which must compete with better-funded private colleges and research universities.

In an attempt to address the problem, some universities, including Austin Peay, have begun assessing fees on business courses. Money collected through the fee$20 per credit houris used to enhance salary offers to prospective faculty, thereby putting the University on more equal footing with its competitors.

"The driving force behind the fee was to make sure we had money for faculty positions," says Dr. Bruce Speck, vice president for academic affairs. "The money can be used for other things, like computers, if the dean and I approve. But the primary purpose is improved salaries."

Speck says money that came into the fund this semester, about $150,000, will be used for one-time expenses. "There are no new salaries to deal with." But he says within the next five years, he expects the funds to be "locked up" in salary improvements.

That doesn't mean existing faculty will see raises, however. "We're not supplementing existing salaries," Speck says. "We're using the money to make new positions more equitable."

Speck says he and other University administrators recognize that as experienced faculty retire, shrinking resources will make it difficult to replace them. The funds will go further and have greater impact, he says, if the University uses them to supplement starting salaries of new faculty.

"When we're replacing a faculty member who's left, we have the money created by the open line," Speck explains. "We can take the line opened by the faculty member who left and supplement it with money from the fees."

Speck does not expect the new funds to create inequities between new and existing faculty. "We've put into practice a policy of examining salaries, so they don't go over a certain level. Our hope is to increase salary offers enough to make the job attractive but not enough to create discrepancies."

Speck says the fees won't bring immediate parity, but they will help. "Accountants straight out of school with no experience earn six figures now," Speck says. "In the foreseeable future, we're not going to be able to compete with that. But this fund will make us more competitive."

Austin Peay was the last school in the state to impose the fee. "When we first discussed it, the business faculty was not particularly in favor of it," Speck says. "They realized it would be a burden to students. But the state is just not able to provide the amount of money it should for higher education, and we had to do something."

Speck sees imposition of the fees as the most equitable way to collect the needed funds, as, instead of spreading the burden among all students, it puts the burden on those students who stand to gain most from program improvements the money makes possible.

"When Joe or Sally come in as students, we give them the same resources. Sally graduates and is an engineer. Joe is a social worker. Both are useful to society. Both paid the same for their education. But Sally gained more benefit. The thinking is that business graduates earn more, so they should pay more.

"On the other hand, the satisfaction a social worker may get from helping others provides another type of reward."

One conclusion that could be drawn from that is that students who are not in the business program but are taking a business course wouldn't have to pay the fee. Unfortunately, that's not the case, says Speck. "Business faculty are teaching the course. We don't have 'non-business' faculty to teach business courses for non-business students."

Though the idea of charging a fee for courses with higher related costs seems radical, it's actually a tradition in academe, Speck says. "We have seminar fees in nursing, for example, and lab fees in science courses. We've had those for a while. And we recently assessed a fee on online courses."

Fees and variable tuition rates seem to be the future of higher education. According to the Sept. 19 issue of The Chronicle of Higher Education, proposals are being discussed in California, Maryland, Texas and elsewhere that would allow schools to assign different tuition rates to students, depending on family income, the time of day they take classes and what major they pursue.

One of the most highly considered ideas, the article notes, is offering discounts to students who take classes during unpopular times, such as late afternoons or on Fridays or weekends.

It's all part of the "restructured financing" that college administrators are exploring with renewed intensity as economists warn that state subsidies are likely to continue to decrease, even after the current economic downturn is over.

"We're becoming state-assisted instead of state-funded," Speck says. "That language is being used nationally. Higher education is not a mandate. People who choose higher education are going to have to realize that if they choose higher education, they're going to have to pay for it."
—Debbie Denton