Report: Lack of state funding, not 'administrative bloat' caused tuition increases

'There aren't a lot of efficiencies to be made'

State disinvestment in higher education accounted for nearly 80% of tuition increases from 2001 to 2011, according to a new report from Demos, a liberal think tank, writes Inside Higher Ed's Kellie Woodhouse.

For the report, Demos analysts looked at data from the Delta Cost Project, which studies the ways colleges and universities spend funds. They found that from 2001 to 2011, between 78% and 79% of the tuition increases at public institutions occurred because of falling state funding, while just 5% to 6% came from administration costs and 6% came from construction.

"Spending increases pale in comparison to tuition increases," states the report.

Over the studied decade, per-student state funding dropped $3,081 at research universities and $2,067 at non-research institutions. Meanwhile, per-student tuition increases averaged $3,628 and $2,463 respectively, marking a "dramatic shift" in who funds public higher education, according to the report.

In 2011, tuition dollars made up 57% of revenue at research institutions and 52% at non-research institutions, according to the report. Ten years prior, they accounted for just 34% and 36%, respectively.

"That is … the real story here," says study author Robbie Hiltonsmith, a senior policy analyst.

While some policy leaders blame "administrative bloat," the ratio of full-time faculty to student body size has remained pretty constant—and the ratio of executives and administrators to students has actually decreased a bit, according to the report. Skilled-trade, maintenance, and clerical worker numbers have also fallen. 

Federal government should compel states to increase funding, say public education leaders

"All of these things are necessary to support the growing university," Hiltonsmith says. "There aren't a lot of efficiencies to be made—this does need to increase proportionally."

One reason personnel spending has grown is that colleges and universities are spending more on benefits per employee. According to the report, health care costs jumped about 40% in the decade studied.

"If there isn't a lot of fat to cut, then [institutions'] only option is to raise tuition or lose quality of education," says Hiltonsmith (Woodhouse, Inside Higher Ed, 5/6).

The takeaway: Decreases in state funding led to almost 80% of tuition increases at public colleges and universities from 2001 to 2011, according to a new report from Demos.

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