The State of American Higher Education: Instruction Budgets Decreasing While Administrative Costs Increase!

Dear Commons Community,

Two articles were published yesterday commenting on the state of higher education and specifically on the escalating costs for administrative and student services.

Bloomberg Reports commented:

“An examination of federal data on the explosion in college costs reveals how far colleges have gotten away from their original mission of providing “higher” education.

The National Center for Education Statistics reported that in 2010-11, nonprofit colleges and universities spent $449 billion. Less than 29 percent of that — $129 billion — went for instruction, and part of that amount went for expenses other than professors’ salaries. Yes, the $449 billion includes money spent on auxiliary enterprises (food and housing operations, for example), hospitals and “independent operations” (whatever they are). Suppose we subtract the $85 billion that pays for all of that from the total. That leaves $364 billion. The $129 billion for instruction of students is still only 35 percent of that.

So for every $1 spent on instruction, $1.82 is spent on non-instructional things such as “academic support, student services, institutional support, public service” and a catchall category called “other.”

The Chronicle of Higher Education referred to:

“Thirty-four pages of research, branded with a staid title and rife with complicated graphs, might not seem like a scintillating read, but there’s no doubt that a report released on Wednesday will punch higher education’s hot buttons in a big way.

The report, “Labor Intensive or Labor Expensive: Changing Staffing and Compensation Patterns in Higher Education,” says that new administrative positions—particularly in student services—drove a 28-percent expansion of the higher-ed work force from 2000 to 2012. The report was released by the Delta Cost Project, a nonprofit, nonpartisan social-science organization whose researchers analyze college finances.

What’s more, the report says, the number of full-time faculty and staff members per professional or managerial administrator has declined 40 percent, to around 2.5 to 1.”

It should also be mentioned that shouldering the increases in administrative expenditures is student tuition.  This is a sad state of affairs because so many of our policy makers in Washington D.C. and in state governments continue to assume that the way to rein in the escalating costs of higher education is to find savings in instruction.


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