Accounting for higher ed

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"As an industry," explain the authors of a new report on college spending, "higher education still has not made the transition from cost accounting to cost accountability." According to the healthily data-obsessed Delta Project, while universities have enacted double-digit tuition increases in recent years, the bulk of this additional revenue did not go to student instruction. Instead the funds were largely diverted to research, non-instructional student "services" ( a category which often includes recruiting costs), and extra-university activities like conferences and extension services.


It's not inherently bad, of course, for a school to spend extra dollars on something other than salaries and office supplies for teaching faculty. More dollars in the classroom don't necessarily translate to better learning, whereas more dollars for research or technology upgrades can improve what and how students learn. Still, in a time of belt-tightening, customers may start to wonder whether all the added expense is necessary.

In this the report is especially instructive, because while average in-state tuition for full-time undergrads at a public research university climbed from $4,486 in 2002 to $5,825 in 2006, Delta's data indicate that if tuition had only risen with increases in instructional spending, the average bill would be $4,599. Among public universities that grant master's degrees, meanwhile, average in-state tuition would have fallen about $80, instead of rising nearly $1,100.


We should keep in mind that even as this cost-shifting has occurred, students at public universities still receive significant subsidies in the form of state and federal allocations to their schools. (Delta reports that the highest subsidy per student is in Minnesota's public research universities, topping out at nearly $12,000 per full-time equivalent. The lowest is Montana's schools, with an average student subsidy of $2,366.) That still sounds like a good deal for students, though some may be forgiven for asking whether all the additional expense is justified. After all, while schools have increased tuition and spending, the number of degrees granted per hundred full-time students has remained relatively stagnant. One could argue that the quality of those degrees has increased, but I don't know many employers of new college graduates who would be willing to affirm that claim.


"Providing service at a lower cost without reducing quality," write the studies authors, "is a guiding principle in the business world. . . traditionally, higher education has not aspired to such a goal. . ." Indeed. With government funds for universities likely to drop, can we expect schools to focus on reining in spending on top-heavy administrations and research that is often far removed from the science investigations we like to imagine our tax dollars are funding? Or can we expect the Washington Monument strategy, wherein schools stick it to students with higher tuition bills and reductions in essential courses, in an effort to set angry parents loose on state legislators?

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