Wednesday, September 14, 2016

From 538: Fancy Dorms Aren’t The Main Reason Tuition Is Skyrocketing

There's an ongoing debate about what is driving up the costs of higher education. Nicer student amenities and higher salaries for administrators are two popular culprits, as is reduced state support.

This author focuses on the latter explanation - the argument applies to Texas as well.

Click here for the article.

At most, about a quarter of the increase in college tuition since 2000 can be attributed to rising faculty salaries, improved amenities and administrative bloat. By comparison, the decline in state support accounts for about three-quarters of the rising cost of college.
Consider Pennsylvania’s four public research institutions,2 one of which is Temple.3 Average tuition revenue per student (adjusted for inflation) increased by $5,880 between the 2000-01 and 2013-14 academic years (the most recent available data). State appropriations per student have declined nearly $4,000 over the same period, from about $7,750 to $3,900. Put another way, if Pennsylvania restored funding for higher education to its 2000 levels, Pennsylvania’s public research institutions could reduce tuition by nearly $4,000 per year without altering their budgets. For students, the impact could be even greater once loan fees and interest were taken into account.
By contrast, imagine that each of these institutions cut per-student spending for student services, administration and instruction back to 2000 levels, then passed those savings on to students in the form of lower tuition. How much would students save? Reducing student services would save each student $380 per year. Dropping all those new administrators would save $150 per student per year. And rolling back spending on faculty salaries would save $850 per year for the average student. Together, those three categories have added $1,380 to the cost of attendance since 2000, about a quarter of the total increase. At least some of that spending benefits students directly: Student-service spending has been found to increase the likelihood of graduating, and increased spending on instruction leads to higher earnings later in life.

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