The Spending Side of the Higher Education Equation

Scott Jaschik:

Across sectors of higher education, only a minority of spending by colleges supports direct instructional costs, according to a report being released today as part of an effort to reframe the debate over college costs.
“The Growing Imbalance: Recent Trends in U.S. Postsecondary Education Finance,” is the result of an unusual attempt to change the way colleges and policy makers analyze higher education. The report — issued for the first time today and now to be an annual project — examines not only revenues, but how colleges actually spend their money.
After years in which people have read about tuition going up, and about state support covering smaller shares of public higher education budgets, the idea is to focus on what results from these and other trends. Some of the findings challenge conventional wisdom — such as the widely quoted belief that the top expense for higher education is the personnel costs associated with professors and other employees.
The report was produced by the Delta Cost Project, part of the Lumina Foundation for Education’s Making Opportunity Affordable program. The overarching thesis of the work is that higher education will do a better job of serving students if everyone is aware of where the money goes — not just how much college costs. By examining the different spending patterns at different types of institutions, the report notes growing gaps among sectors and among items receiving financial support. For example, spending per student at private research universities is almost twice that of public research universities.