Trends in College Spending

The just-released Delta Cost Project’s Trends in College Spending report is a survey of college and university finances for the decade ending 2013 (the most recent year for which comprehensive data is available). The goal of the report is to show how colleges and universities collect and spend money, and the outcomes generated by this spending.

The report shows some noteworthy trends:

  • Overall, on average spending by colleges of all types was up in 2013 compared with previous years.
  • While “education and related” spending experienced its largest increase in some time in 2013, spending on noninstructional services and administration grew at the fastest rate of all spending categories. Four-year colleges and universities increased spending on student services on average at roughly double the rate of increases of instructional spending (2-4% vs 1-2%)
  • Degree productivity, or the number of degrees awarded per 100 full time students, increased sharply
  • Despite some positive trends in cost-appropriation– notably, that schools largely stopped shifting additional operating costs onto students– the report showed that public funding of education had not yet been restored to pre-recession levels. (Note the report includes data only through 2013; many states seem to have hit that level since then.)

So, schools are spending more, but more of that spending is going to non-instructional areas. Is that good or bad? One area of significant investment has been academic and career counseling. To the extent that these functions help students graduate on time and enter the workforce promptly after graduation (increasing “degree productivity”), there is benefit to this type of spending. Another large area of investment has been student mental health services. Again, there is upside to this type of spending. However, these dollars also go into all the cringe-worthy residence hall vanity projects that we see going up in many places.

The full report is here. To me one of the big takeaways is, I need to understand where the money goes at schools my kids are interested in. Is our tuition helping students graduate on time and become productive members of society, or is it trenching lazy rivers around dorms?

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