U.S. college students paying more for less

By Kate Zernike

Published: January 16, 2009

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College students are covering more of what it costs to educate them, even as most colleges are spending less on students, according to a new study.

The study, based on data that colleges and universities report to the U.S. government, also found that the share of higher education budgets that goes to instruction has declined, while the portion spent on administrative costs has increased.

It describes a system that is increasingly stratified: the smallest number of students — about 1 million out of a total 18 million students — attend the private research universities that spend the most per student. The largest number of students — 6 million — attend community colleges, which spend the least per student, and have cut spending most sharply as government aid has declined.

"Students are paying more, and a greater share of the costs, but are arguably getting less," said Jane Wellman, the executive director of the Delta Project on Postsecondary Education Costs, Productivity and Accountability, which drafted the study.

The Delta Project, a nonprofit, nonpartisan organization, seeks to increase college affordability by controlling costs, a goal it says can be accomplished without sacrificing quality. The study is a rare effort to look inside what researchers call the black box of higher education: the question of why it costs so much and where the money goes.

Colleges have justified rising tuition, in part, by saying that it does not cover anywhere near the full cost of educating a student. That is still true, but less so; the study found that students are contributing a greater share of the cost of their education at all kinds of institutions, even after accounting for scholarships and other tuition discounts.

In 2006, the last year for which data is available, students at public colleges and research universities paid about half the cost of their education — defined as the cost of instruction, student services and a portion of spending on operations, support and maintenance. That is up about 10 percentage points since 2002. At community colleges, students covered about 30 percent of their education, up from 24 percent.

At private institutions, the increases were less steep, but students cover a greater share: at private research universities, students paid 55.8 percent of the cost of their education in 2006, up from 55.3 percent in 2002. At private colleges that offer bachelors degrees — essentially, liberal arts colleges — the student share went to 63.5 percent in 2006 from 57.7 percent in 2002. At those that offer masters' degrees, it went to 83.6 percent in 2006 from 75.5 percent in 2002.

At public institutions, spending on instruction declined from 2002 to 2005, and increased in 2006, but the increases did not make up for earlier reductions.

Spending on instruction decreased at private institutions, as well, except for private research universities, where it rose slightly.

"The institutions whose primary mission is teaching — the masters and community colleges and bachelors colleges, are slowly disinvesting in the teaching function," Wellman said.

And the percentage of the budget going to instruction declined everywhere between 1995 and 2006 — to 63 percent from 64.4 percent at public research institutions, to 50.2 percent from 52.8 percent at public community colleges, and to 38.9 percent from 40.7 percent at private bachelors colleges.

The biggest decline occurred at private research universities, where the percentage of the budget devoted to instruction went to 57.9 percent in 2006 from 62.3 percent in 1996.

Meanwhile, the share spent on administration and support increased everywhere. At public research universities, those costs consumed 28.3 percent of the budget in 2006, up from 27.7 percent in 1995. At private research institutions, they accounted for 32.9 percent of the budget, up from 30.1 percent, and at public community colleges, 37.7, up from 35.9 percent.

Tuition increased faster than spending on education, with students at public institutions taking on the biggest increases, as states contributed less per student.

Had tuition increased only to match spending, the report's authors calculate, it would have increased only 2.5 percent at public research universities, where it went up 29.8 percent. At private colleges, it would have increased 1.9 percent, rather than 12.5 percent. And at state and community colleges, tuition would have declined, by 2.1 percent and 5.8 percent. Instead, it rose 29 percent and 18.1 percent.

As state revenues decline, Wellman predicted, the problem will only get worse. "We see the picture ahead being more of the same, but dramatically more of the same," she said.