Open Education Open Education

College Costs – Higher Education Failing our Students

For a number of years there has been a growing consensus that we need to find ways to assess educational progress. That demand for accountability began initially in American public schools, but in recent years, there has been a much-needed push to shine a lens on higher education.

Unfortunately, whereas we once viewed American colleges and universities as exemplars for the entire world, in recent years the sheen has begun to erode. First came those reports of a system that was accepting only the best and brightest students yet was only graduating those students at rates that we will not accept from our high schools.

iStock_000007901834XSmallIn recent times, there has been a shift towards an examination of the extraordinary costs associated with earning a degree and the mountains of debt students have taken on in their effort to earn that coveted diploma.

New Online Tool

In regards to the latter issue, those interested in examining the cost-effectiveness of higher education now have access to a new cost-comparison tool. Thanks to the Delta Project on Postsecondary Costs, Productivity, and Accountability, it is possible for analysts to examine how thousands of the nation’s colleges and universities are spending their resources.

The Delta report – Trends in College Spending 1998-2008: Where Does the Money Come From? Where Does It Go? What Does It Buy? – focuses on the period from 1998 to 2008. Using that accumulated data, the folks at Delta have created TCS Online, a web-based application, that allows individuals easy access to individual institution details.

As for the soaring rates in tuition over the past decade, the Delta Project reveals some very important insights. Sadly, the results reflect poorly on our priorities as a nation and the priorities in place at our colleges and universities.

Those Ever-Rising Costs

One significant factor in the overall increase in costs centers upon the chase for students. According to the report, “sharp increases in spending between 1998 and 2003 by a handful of colleges and universities” created “competitive pressures on spending everywhere.”

But in most cases, college tuition is “not increasing because spending is going up. They are going up because of cost-shifting—meaning that instead of cutting spending in the face of revenue declines, institutions consistently shift to higher tuitions.”

To get at some hard numbers, “at public research universities, nearly all of the revenues from student tuition increases from 2002 to 2006 (92 percent) were used to offset revenue losses from other sources, primarily state appropriations.” Over that same period “the share of educational costs represented by student tuition rose from just over one-third to nearly one-half at public four-year institutions.”

It is important to realize that while our politicians, from President Obama on down the line to our local state representatives, pronounce their support for higher education, their actions speak differently. The findings of the Delta Project reveal a “shift away from public funding of institutions” meaning that new money to pay for increased costs must come from “tuition and fees, private gifts, and grants and contracts.”

Private universities are said to be doing better because they have actually decreased the percentage outlay for students. While still a positive step, students are paying between 75 and 85 percent of the full cost of their education at these more expensive institutions.

Wrong Priorities?

Sadly, while costs to students continue to escalate, “the share of educational spending dedicated to classroom instruction declined at all types of institutions from 2002 to 2006. The share of spending going to pay for instruction has consistently declined when revenues decline, relative to growth in spending in academic and student support and administration.”

Even more disappointingly, “this erosion persists even when revenues rebound, meaning that over time there has been a gradual shift of resources away from instruction and towards general administrative and academic infrastructure” including general academic support, student services, and maintenance.

As for those extra dollars helping more students, there seems to be one positive. Over the past ten years “spending per completion (certificates or degrees) has remained fairly steady at public colleges.”

Still, it is alarming to note that the student services category includes such items as intramural athletics and student centers. Here again, the dollars are instead chasing the students in the hopes of increased enrollments.

iStock_000011382993XSmall“This is the country-clubization of the American university,” Richard K. Vedder, a professor at Ohio University who studies the economics of higher education, told the New York Times. “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.”

Better Education?

There is little doubt that the United States has the world’s wealthiest postsecondary education system. According to the research of Delta, American institutions spend on average about $19,000 per student. That is more than double the $8,400 average cost of other developed countries.

Furthermore, community college costs average about $10,000 per student while private institutions average $35,000. Such numbers make it easy to see that our current system of higher ed is also perpetuating the stratification of our society.

The Delta report does not get at the heart of the quality of the educational product. But it does clarify that we have real problems embedded within our current system, especially if our goal is to help provide students from all walks of life a chance at a college degree.

Our politicians need to match their actions with their rhetoric and ensure adequate funding for our public colleges. But at the same time, those institutions of higher education need to find ways to cut costs that ultimately do not directly affect classroom academics.


1 Julie Carle { 07.20.10 at 1:41 am }

Hi Thomas, you may enjoy the subtle humour from Bob and Sue as they discuss issues around returning to Higher Education as adult students and the frustrations they face from a UK Education networking site

2 Alisa Jones { 08.09.10 at 3:13 am }

Given the student population and overall mission of a community college, it is by far my ideal work environment. With community colleges serving as the first and at times only exposure to higher education for the large portion of our students, I am often concerned and curious about how we spend our revenue. Thus, I think it is highly important to ensure these students receive a complete and beneficial educational experience. Does this mean spending more on the student services opposed to instruction or the opposite? Even though I understand the need for effective services, programs and activities outside of the classroom, it is the educational opportunities that attract students to a college campus, and the additional support services that may aide in their decision to remain enrolled. An ideal situation, which be an even distribution of funds for different areas, however the reality is at times these areas may have varying needs and eaqul spednin may not be possible. So, if I had to pick which area should be the focal point, I would have to go with instruction. This is where students should truly get their money worth.

3 Techie { 08.09.10 at 11:07 pm }

College costs are ridiculous. For a student to get a decent education we have to enter the world with tens – if not hundreds of thousands of dollars in debt.

4 Jimmy Readospam { 08.20.10 at 2:16 am }

I believe that we should not blame the college and institutes for charging huge fees. The reason being price of things are escalating and if the colleges want to compete with the best institutes across the globe, then there is no fault in increasing the fees.

As far as the students are concerned, they can definitely opt for the federal loans to pay for the tuition fees. For other expenses incurred at the college, they should work part time and if they do like this, I am sure that they would be able to afford the fees. And not to forget that the colleges also provide scholarships and grants to the meritorious people for their studies.

5 alisa jones { 09.12.10 at 9:43 pm }

In examining how and where colleges spend their funds, I find it quite interesting, really alarming that students are subject to increases in tuition and fees, but see little return on their investment. Currently, I work for a community college system that works to maintain a stable financial reserve and avoid extreme debt. For example, major purchases and renovations are paid for upfront and funds from bond elections or making major purchases on term is not an option. Operating in this manner prohibits the college from turning to students to make the cost/expense of operating the college. In addition to not expecting students to finance every aspect of operations, the college continues to reinvest students through the development of new programs, increases in employees’ salaries, providing recent technology, and campus improvement projects. However, it would be interesting to take the time to thoroughly review the financial records.

6 alisa jones { 09.12.10 at 9:51 pm }


I agree with you completely. I managed to get through undergraduate without any students loans, then my first masters with a small student loan (which I did pay off.) Now, the second masters, I took a loan out towards the end, but working on my doctrate has been completely different. I don’t even see how I’ll pay these loans off, but I know it must be done.

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