Where the money goes

Community colleges, which spend only $10,000 per student annually, are the workhorses of an increasingly stratified higher education system, reports the Delta Cost Project in Trends in College Spending 1998-2008: Where Does the Money Come From? Where Does It Go? What Does It Buy? The U.S. average for higher education spending is $19,000 a year;  private research universities spend $35,000 per student.

“While the United States has some of the wealthiest institutions in the world, it also has a ‘system’ of postsecondary education with far more economic stratification than is true of any other country,” Jane Wellman, executive director of Delta Project told the New York Times.

Undergraduate and graduate enrollments grew by 26 percent from 1998-2008, with community colleges growing the fastest. Tuition rose 36 percent at community colleges over the decade, compared to 45 percent at public research universities but only 21 percent at private research universities.

People are right to suspect wasteful spending, reports The Chronicle of Higher Education. Tuition raises have outpaced inflation and family income with “no discernible payoff in quality, opportunity or results,” the report finds.

. . . many private colleges raised tuition despite explosive growth in private gifts and endowment income in the three years before the recession. As the report states, those healthy revenue streams just enabled higher overall spending rates.

At all levels of higher education, the share of funding for instruction (faculty pay and benefits)  declined, while colleges spent a larger share of budgets on administration, academic support (libraries, computer labs) and students services (counseling, financial aid and recreation). From the New York Times:

“This is the country-clubization of the American university,” said Richard K. Vedder, a professor at Ohio University who studies the economics of higher education. “A lot of it is for great athletic centers and spectacular student union buildings. In the zeal to get students, they are going after them on the basis of recreational amenities.”

. . . Even at community colleges, with their far smaller budgets, spending on student services increased 9.5 percent, compared with 3.4 percent for instruction.

The spending spree is over, Wellman said. Now, “policy makers as well as university presidents and boards must learn to be better stewards of tuition and taxpayer dollars.” she said.

POSTED BY Joanne Jacobs ON July 12, 2010

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Where the money goes « Joanne Jacobs

[...] Community College Spotlight:  College tuition has soared without any rise in quality, says a new report. A smaller share of the money goes to instruction, a larger share to [...]

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