Institutional Priorities Have Shifted

by Daniel L. Bennett

A great report, Trends in College Spending 1998-2008, was released by the Delta Cost Project today. The report tells us where college revenues came from and how they were spent. In tandem with the report, DCP also unveiled a new public database that will allow policy makers, institutional leaders and whoever else cares to peruse the data to do institutional comparisons of the revenue and spending data. In many ways, this new report buttresses what CCAP has been saying all along.

Despite popular rhetoric from the edu-establishment, this report once again brings to light the fact that state subsidies, although somewhat cyclical, have remained relatively consistent on a per student basis, even after adjusting for inflation. The report suggests that when colleges do cut costs during downturns in the economy, instruction tends to bear the brunt of the impact. This implies something about institutional priorities, which can be determined by evaluating where schools are spending their resources. As this report indicates, the share of revenues going to instruction has declined in favor of other activities, notably research, administration/student services, and athletics. This implies that colleges increasingly value the role of undergraduate education less than research prestige, athletic superpower and bureaucratic expansion. 

Colleges' spending habits are out of sync with their revenue streams. This fiscal impropriety has resulted in colleges having to chase increasing amounts of revenue - a burden that has mainly fallen on students and their families. It is somewhat ironic that students are increasingly asked to pay for a greater share of the burden, yet they are arguably getting less bang for their back in terms of education. Perhaps it is appropriate that students' share of the cost for higher education continues to grow as universities continue to shift their mission to things other than undergraduate education. After all, the case for subsidizing college education rests primarily with the educational aspect of college, not the social.

Richard Vedder commented on the report in this article for The NY Times:

“This is the country-clubization of the American university,”

“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.”