Dear Commons Community,
The gap in spending between rich and poor colleges and universities is rising mainly due to budget reductions in the public sector. According to the latest Delta Cost Project Report for 2011,
“Disparities between rich and poor institutions in overall spending levels have never been larger. Since policy makers and the public often form impressions about higher education based on a relatively small handful of elite institutions, it is important to note that by far the largest majority of students are being served in institutions that spend on average around $10,000 per student per year—no more than we spend for elementary and secondary education.” The highlights of the report are below.
The NY Times in a summary of the report provided the following illustration:
“… from 2008 to 2009, the latest year for which data is available, community colleges’ net tuition increased $113, but their per-student spending declined by $254, mostly because of shrinking state and local financing. In that year, appropriations to community colleges nationwide fell an average $488 per student. At public research universities, which enroll 4.1 million students, net tuition increased by $369 — but appropriations declined by $751 per student, and spending per student increased only $92…
At private institutions, from 2008 to 2009, both tuition and spending have been rising. Private research universities’ per-student spending increased by $907, and private liberal arts colleges’ $298, while their net tuition increased $293 and $381, respectively.”
The situation does not bode well for large comprehensive public university systems like CUNY where reductions in state budget appropriations are expected to continue and in turn, will result in higher tuition for students. The saddest part is that spending per student for instruction will be reduced or at best stay flat.
If you are interested in this issue, I suggest you participate in a conference, Defending Public Higher Education, that will be held at the CUNY Graduate Center on October 7th. Registration and program information are available at the conference website.
Tony
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Highlights of Trends in College Spending, 1999–2009:
The immediate effect of the recession was most evident at public community colleges. Spending per student fell in 2009, fueled by a combination of enrollment growth and revenue losses. As a result, community colleges fell further behind other institutions—public, non-profit, and for-profit—in their ability to serve growing populations of students with resources adequate to ensure access, attainment, and quality.
Although non-profit private institutions experienced large paper losses on their financial investments, other sources of revenue grew and spending went up, continuing a twenty-year trend of widening differences between public and private institutions.
While public four-year institutions were unable to keep pace with spending increases at private non-profit institutions, they did protect educational spending per student even as overall revenues per student declined, spending about what they averaged in 2008.
There is some good news: An uptick in the conversion of enrollments into degrees and lower numbers of student credit hours per degree or certificate signal improvement in educational degree productivity over the decade. These increases have not yet translated to decreased production costs, as spending continued to rise. Only community colleges have managed to lower their production costs per completion, largely through producing less-costly certificates rather than boosting degree output.
Contrary to patterns in previous years, we see in 2009 public four-year institutions protecting instruction and student services by shifting spending away from administration and deferring maintenance. These spending changes suggest that institutions were managing budget reductions more strategically than in previous recessions, when across-the-board cuts were more common.
The proportion of education and related spending financed from tuition revenues went up, exceeding even the jump following the 2001 recession. At public institutions, revenues from tuition rose to replace lost revenues from other sources, but in private non-profit institutions, increased revenues from tuition were redistributed primarily through tuition discounts. Almost everywhere, rising student tuition revenues did not translate into greater education and related spending, so students were paying for more while institutions were subsidizing less. This gap between prices and spending raises troubling questions about the sustainability of the funding model for the future and is the source of growing public and policy critiques of higher education.
Disparities between rich and poor institutions in overall spending levels have never been larger. Since policy makers and the public often form impressions about higher education based on a relatively small handful of elite institutions, it is important to note that by far the largest majority of students are being served in institutions that spend on average around $10,000 per student per year—no more than we spend for elementary and secondary education.
