College costs rise despite staffing cuts

Community colleges and public research universities hired 16 fewer staff  per 1,000 full-time-equivalent students — and many more part-time instructors — from 2000 to 2012, concludes Labor Intensive or Labor Expensive?, a report from American Institutes for Research’s Delta Cost Project.

Faculty pay hasn’t increased, said AIR researcher Donna Desrochers. However, the cost of health coverage, pensions and other benefits have risen steadily, driving up costs. In addition, colleges and universities are adding non-teaching jobs, such as business analysts, human resource staff, counselors and health workers.

At community colleges, 58 percent of employees are instructors, a percentage that’s remained steady for 12 years. However, only 17 percent of employees were full-time faculty in 2012, down from 21 percent in 2000. There are 2.7 FTE instructors per administrator. That’s the lowest ratio of administrators to faculty in higher education.

Community colleges take biggest financial hit

Community colleges “took the greatest hit” in 2010 as higher education struggled to recover from recession, concludes the Delta Cost Project in College Spending in a Turbulent Decade.

All colleges and universities are trying to serve more students with less money, the report found. “As funding failed to keep pace with historic increases in enrollment, educational spending per student plummeted to its lowest level in a decade.”

Community colleges suffered the greatest financial hardships.

Historic enrollment increases, combined with sharp losses in per-student revenues from state appropriations and meager increases in net tuition revenue, resulted in significant cuts to academic spending per full-time equivalent (FTE) student. Community colleges concluded the decade spending less per student than they had ten years earlier.

State universities were able to preserve spending on instruction and student services, while private four-year institutions implemented widespread cuts, the report found. Although students covered a larger portion of educational costs, sharp tuition increases were not enough to offset lost revenues.

Funding for community colleges continued to fall further behind other public institutions. . . They were the only public institutions at which average total operating revenues per FTE student declined in 2010 and also were lower than a decade earlier. Community colleges suffered the deepest cuts in state and local appropriations per student in 2010, with funding reduced by approximately $1,000 per student; however, they  also limited the new money coming from net tuition revenue more than did other types of public institutions.

Efforts to keep community colleges accessible and affordable while accommodating more than 40 percent of new higher education students—often the most economically or academically disadvantaged—have significantly eroded the resources they have to devote to each student.

The growth in less costly, shorter-term certificate programs cut the cost of completion in community colleges from 2000 to 2010.

The high cost of dropouts

Nineteen percent of higher education spending goes for students who fail to earn a certificate or degree from any institution, according to a report on student attrition by the Delta Cost Project at American Institutes for Research (AIR). Each 20 percent reduction in attrition will increase degree or certificate production by 6 percent, helping meet President Obama’s goal of increasing the number of young Americans who earn college degrees, the report finds.

One third of undergraduates leave college without a credential. Academic failure is not the primary cause: More than 40 percent have earned A’s and B’s. Only 15 percent of attrition costs was linked to dropouts with a C average or below.

The average cost per completed credential is $16,100 for a certificate, $33,900 for an associate degree and $53,800 for a bachelor’s degree.

Can college costs be controlled?

Despite the recession, college costs keep rising: Last year, tuition and fees increased by 8.7 percent at community colleges, 8.3 percent at public universities,  4.5 percent at private nonprofits and 3.2 percent at for-profit schools.

College leaders must “think more creatively and with much greater urgency” about controlling costs and reducing students’ debt loads, said Education Secretary Arne Duncan Tuesday at a conference of financial aid administrators in Las Vegas.

“Three in four Americans now say that college is too expensive for most people to afford,” Mr. Duncan said. “That belief is even stronger among young adults — three-fourths of whom believe that graduates today have more debt than they can manage.”

A college degree is an increasingly important investment, said Duncan, claiming that a four-year graduate will earn $1 million more over 40 years than a high school graduate. (That’s an inflated estimate, argues Richard Vedder.)

Exhortation won’t solve the debt problem, Patrick M. Callan, president of the Higher Education Policy Institute, told the New York Times.

“We’ve put huge amounts into Pell grants under Clinton, Bush and Obama, but the money that went to financial aid has been absorbed by tuition increases. And with all that we’ve invested, we have a less affordable system than we had a decade ago. We’re on a national treadmill.”

Duncan promoted the administration’s plans to link federal loans and grants to colleges’ success at graduating Pell recipients, increasing overall completion rates and closing achievement gaps.  He also promised grants “to support programs that use innovation to accelerate learning and hold down tuition.”

Edububble is skeptical:

The Feds can write as many checks as they want, but the college industrial complex will take all of the money and still demand more from the students. The only solution is for professors to teach more and for colleges to quit spending so much money on new buildings. Oh, and quit paying so much for administration. But no one wants to hear those ideas.

The next day, the House Education & Workforce Committee held a hearing on “Keeping College within Reach.

“This troubling trend of higher prices has several causes, including weak local economies, increased spending on student services and academic support, and state budget crises,” said Rep. Virginia Foxx, who chairs the committee.

“. . . as our nation struggles with trillion dollar budget deficits and unprecedented national debt, continuing to increase federal subsidies to supplement the growing cost of college is simply unsustainable … colleges and universities must do their part to streamline costs and lessen the burden for students whenever possible.”

Jane V. Wellman, executive director of the Delta Cost Project, said tuition is rising “much faster than spending or costs” to replace state and local revenues and to cover costlier employee benefits. “Pretty much all of the new money coming in from tuition increases [is] going out the door to pay for the growing costs of health care,” she said.