Students Paying a Greater Share of Higher Education Costs

Institutions continue to increase tuition to cover declines in other revenue sources like state appropriations so students and families continue to pay a larger share of higher education costs, according to a new report by the Delta Project, an organization dedicated to studying college spending with the aim of improving affordability. The increases in tuition revenue allows institutions to maintain, but rarely increase spending per full-time student.

The report “Trends in College Spending 1999-2009: Where Does the Money Come From? Where Does It Go? What Does It Buy?” examines national college spending and revenue trends in the years leading up to and including the beginning of the current recession, from 1999 to 2009.

“Almost everywhere, rising student tuition revenues did not translate into greater education and related spending, so students were paying for more while institutions were subsidizing less,” the report states. “This gap between prices and spending raises troubling questions about the sustainability of the funding model for the future and is the source of growing public and policy critiques of higher education.”

While the average tuition revenue at public research institution increased by $369 per student between 2008 and 2009, the loss in state and local appropriations was $751 per student.  The report found that despite the drop in revenue, most of these institutions were able to increase educational and related spending per student by $92, in some cases shifting spending away from administration and deferring maintenance. 

Community colleges and their students suffered the biggest losses.  Spending per student fell in 2009, and community colleges “fell further behind other institutions—public, non-profit, and for-profit—in their ability to serve growing populations of students with resources adequate to ensure access, attainment, and quality,” the report states.

The private sector has so far fared relatively well.  The report indicates that while the private sector suffered revenue losses from endowments and gifts, reserves were enough to allow for substantial education spending. 

However, for students in private master’s and bachelor’s institutions, “tuition revenue increases were larger than spending increases.”

While most schools used increased tuition revenue for education and student services, such as financial aid resources, the amount being spent on those resources did not necessarily increase. Simply, the report found that students and their families are paying more in tuition costs but not receiving a better education for the increase.

Lastly, the report found a growing disparity between rich and poor institutions.

“Since policy makers and the public often form impressions about higher education based on a relatively small handful of elite institutions, it is important to note that by far the largest majority of students are being served in institutions that spend on average around $10,000 per student per year—no more than we spend for elementary and secondary education,” the report notes.