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College Costs: State, Local Subsidies Cover Less, Students Pick Up Slack

• By Dian Schaffhauser
• 07/28/14

Students are paying more of the share of their education's cost at the same time subsidies for public colleges and universities have hit a low for the decade. During that same period spending on students at community colleges has dropped to its lowest level as well.

These findings are tucked inside the results of a newly published report by the Delta Cost Project, a long-time research effort that analyzes questions about institutions of higher education and money — where the money comes from, where it goes, what tuitions pay for and what the relationship is between spending and outcomes. The National Center for Education Statistics maintains the Project’s database as part of its Integrated Postsecondary Education Data System (IPEDS). IPEDS conducts annual surveys gathering information from every college, university and technical and vocational institution that participates in the federal student financial aid programs. The analytical work of the Project is performed by the American Institutes for Research (AIR).

The latest report looks at survey results from 2001 to 2011. Findings include:

• For the first time at four-year institutions, students on average pay half or more of the complete institutional cost to provide their education. At public institutions that's an increase of 18 to 22 percent over the decade; in those schools student tuition revenues nearly equaled or exceeded state and local funding in 2011;
• The subsidies schools get through state and local appropriations or other revenue sources dropped to a 10-year low, equating to an average of $6,000 to $7,000 per student at public four-year institutions. Public research universities have seen their second year of declines averaging 8 percent; during the recession state and local funding declined by 6 to 15 percent at these institutions. At public non-research colleges, the decline has slowed — to about 2 to 4 percent on average;
• Education and related student spending (which includes costs for instruction, student services and an allocation for administration and maintenance) dropped by about 1 percent in public and private research universities and community colleges in 2011;
• In spite of the economic crunch spending on students at four-year schools was still higher in 2011 than it was five years and 10 years earlier, averaging $12,600 to $16,000. Yet spending at community colleges for full-time equivalent students dropped to its lowest level in a decade — $9,600 — for the second year in a row;
• Shortfalls at public research universities and private colleges were filled in somewhat by private gifts, investment returns and endowment income and auxiliary services, such as residence halls and meal services. Public research universities relied on increases in net tuition revenue more than private schools did; and
• The overall "production" cost per degree dropped at public institutions in 2011, but only community colleges had considerably lower costs by the decade's end. Private institutions did less in " boosting" degree productivity and controlling costs per degree but made longer-term gains in degree productivity;

"Students are paying an ever-larger share of the costs colleges and universities incur to provide an education — particularly students at public institutions," report lead author and AIR principal researcher Donna Desrochers said in a statement. "Research universities are still feeling the recession's aftermath, with academic spending per student declining for two years straight while spending at other four-year institutions rose."