Friday, May 02, 2008

Spending Per Student

There's a provocative piece in yesterday's IHE about a study on per-student spending at various levels of higher ed, and a basic breakdown of instructional vs. non-instructional costs.

As a reader at a community college, I couldn't help but notice that our spending per student – total, including non-instructional – has actually dropped. But our tuition continues to increase because...wait for it...our subsidies haven't kept pace with inflation. (In my state, they've actually dropped, even before adjusting for inflation.) We don't have a climbing wall, or research labs, or a football team, or dorms, or as many administrators as we had ten years ago, so the usual suspects behind tuition increases are simply irrelevant. It's all about the subsidies. Cut the subsidies, and tuition will increase.

I get a little antsy when I see “instructional” and “non-instructional” as categories, because I think it's too easy for people to read “non-instructional” as frills. Heat is non-instructional, and our heating costs have skyrocketed over the last few years. But going without heat wouldn't exactly foster an environment conducive to learning. Financial aid is non-instructional, but without it, we'd have fewer people to instruct. When we award more scholarships, by this calculation, the percentage of our budget spent on instruction drops. But it's the right thing to do.

Any discussion of higher ed finance that doesn't address health insurance will be distorted. The cost of health insurance continues to climb at double the rate of inflation – sometimes much more than that – even as our operating subsidies are declining. CC's don't have endowments, so we can't just dip into savings to make up the difference. It's pure cost for us, and the cost is both large and climbing fast. In my observation, this is a major driver behind the trend towards adjuncts, simply because there aren't that many other ways for community colleges to balance the books. The cost spiral makes us inefficient in some fairly obvious ways. If Professor Smith's salary goes up four percent this year, and the cost of her health insurance goes up ten percent, by what percent does her output increase?


Now add reduced external funding to the picture, throw in a few unfunded mandates (every time there's a new 'reporting requirement,' it adds administrative cost), and note the annoying truth that in any given year, 85 to 90 percent of the college's budget is labor. Bake in the crucible of local politics, and enjoy!

Fun fact: Perkins grants cover certain kinds of equipment, but they don't cover maintenance. Where do those maintenance contract fees come from? If you guessed 'the operating budget,' you win!

I fully agree with the moral critique of the adjunct trend. But I disagree with those who suggest that it's just a function of administrative featherbedding or bigtime sports or climbing walls. To me, those critiques sound like those financial planners who say things like “to cover your retirement, just stop buying those three five-dollar lattes a day!” I don't buy three five-dollar lattes a day. I can't remember the last time I even bought one. It's an easy answer and an irrelevant one; it's a substitute for engagement with what's actually going on. As the study shows, cc spending has actually been quite disciplined; if not for the adjunct trend, that wouldn't be true, and the costs passed on to students would have been substantially larger. But alternatives aren't easy or painless.

The political life-cycle of studies like these is predictable. Elite private schools will generate some offensive factoids; voter anger will be directed at the public colleges that had nothing to do with it. When all is said and done, the elites will pull even farther away, students will take on even more debt, and the public still won't be happy because it will sense – correctly, if inchoately – that it's been had.


It's not about lattes or deans or climbing walls or counselors. It's about politics. Health insurance, progressive taxation, and subsidies. Get the politics right, and we can actually make progress. Ignore the big picture, and the unproductive sniping can go on forever.