How Universities Are Spending Your Money

HOW UNIVERSITIES ARE SPENDING YOUR MONEY an infographic As college tuitions continue to rise at astronomical rates, many students (and parents) are wondering just how their tuition dollars are being spent and what's driving all of the price hikes. The Delta Project on Postsecondary Education Costs, Productivity, and Accountability conducts an annual study on how non-profit education institutions spend their net tuition revenues. Some of the findings may surprise you and reveal how the recession has affected public and private institutions across the United States. Instruction spending makes up the single largest expense category TOTAL SCHOOL SPENDING, PER FTE STUDENT Instruction 12 11 Academic Support 37 15 17 45 47 % of total Research budget 10 12 Public Service 22 11 11 Student Services Institutional Support PUBLIC RESEARCH SECTOR PUBLIC MASTER'S SECTOR PUBLIC COMMUNITY COLLEGE SECTOR Operation & Maintenance Cuts in administrative spending were used to increase instruction budgets PER STUDENT EDUCAȚION SPENDING Instruction $20k Student Services 29.5 28.9 Academic and institutional support, and operations and maintenance 29.0 27.9 $10k 8.3 8.9 8.8 9.0 37.3 37.2 36.6 36.9 36.6 37.3 38.0 37.8 10.6 10.7 11.2 11.4 11.7 12.0 12.0 12.2 62.8 63.2 61.7 62.2 52.8 52.4 51.5 51.5 51.7 50.8 50.0 49.9 $0 % of total budget 1999 2004 2008 2009 1999 2004 2008 2009 1999 2004 2008 2009 RESEARCH MASTER'S COMMUNITY COLLEGE Government subsidies (sourced from taxes) are much lower than earlier in the decade STUDENT, INCLUDING SUBSIDIES EDUCATION SPENDING PER $20k Average Subsidy $8166 $7889 $9,000 Net Tuition $7582 $10k $7230-$6321 $6640 $6441 $7897 $6800 $7492 $7124 $5353 $6640 $7661 $8030 $4075 $5053 $5698 $5923 $2307 $2757 $3005 $3118 $0 1999 2004 2008 2009 1999 2004 2008 2009 1999 2004 2008 2009 RESEARCH MASTER'S COMMUNITY COLLEGE As a result of lower subsidies, tuition revenues are paying for a larger share of costs STUDENT, INCLUDING SUBSIDIES EDUCATION SPENDING PER 100% | Subsidy share of E&R costs 61.6% 51.4% 49.6% 47.6% 63.3% 54.7% 52.9% 51.3% 76.5% 69.9% 69.4% 67.7% Tuition Share of E&R costs 80% 60% 40% 20% 38.4% 48.6% 50.5% 52.4% 36.7% 45.3% 47.1% 48.7% 23.5% 30.1% 30.6% 32.3% 1999 2004 2008 2009 1999 2004 2008 2009 1999 2004 2008 2009 RESEARCH MASTER'S COMMUNITY COLLEGE PER STUDENT EDUCATION & RELATED SPENDING, PUBLIC VS. PRIVATE As a result of the recession public schools have experienced the biggest growth in enrollments, but have had less tax revenue to spend on each student. Increase in student enrollment (in millions, except where noted) $40k $30k -750K- 4.1 1.3 2.6 $20k 6.8– $10k RESEARCH BACHELOR'S MASTER'S RESEARCH BACHELOR'S COMMUNITY COLLEGE PRIVATE PUBLIC Increase in spending per student vs. increase in student enrollment $7500 $2800 $1900 $1500 $1000 $0 175,000 Students 175,000 Students 275,000 Students 600,000 Students 450,000 Students 1,600,000 Students BACHELOR'S MASTER'S BACHELOR'S COMMUNITY COLLEGE RESEARCH RESEARCH PRIVATE PUBLIC Part-time faculty and teaching assistants have been increasingly relied upon to instruct classes in an effort to keep staff costs down FACULTY & STAFF EXPENSES BY JOB TYPE Full-time faculty 100% 7.3% 6.7% 10.4% 8.9% 9.2% 7.6% 10.0% 8.1% 12.3% 10.6% 13.7% 16.0% Part-time faculty/ graduate assistants 10.9% 14.7% 13.8% 13.6% 15.8% 12.7% 14.6% 18.1% 16.2% 13.1% 13.0% 80% 15.2% Executive, administrative, and managerial 16.1% 17.5% 27.8% 19.7% 19.5% 60% 28.7% 30.0% 20.9% 22.4% 4.2% 4.3% 22.9% 30.0% 21.3% 8.6% Professional and technical 5.2% 4.2% 4.9% 8.4% 8.9% 10.0% 4,0% 9.5% 40% 37.4% 39.9% 7.0% Clerical and secretarial 23.8% 19.5% 21.0% 24.4% 30.9% 16.8% 23.3% 26.6% 13.1% 17.2% Craft and Service 20% 26.1% 24.8% 21.9% 24.8% 23.5% 19.1% 19.5% 20.3% 17.8% 18.2% 21.1% 20.0% 2000 2008 2000 2008 2000 2008 2000 2008 2000 2008 2000 2008 RESEARCH BACHELOR'S MASTER's RESEARCH BACHELOR'S COMMUNITY COLLEGE PRIVATE PUBLIC Despite being one of the smaller groups, full-time faculty take up between 60-70% of compensation spending FACULTY & STAFF COMPENSATION COSTS 80% Faculty compensation share of E&G 70% 60% 50% -37.3% 37.0% |31.7%31.9%- 29.0%29.2% 31.2% 31.5%| 29.1% 30.2% Non-instructional staff compensation share of E&G 40% 30.7% 32.2% 30% 39.5% 38.5% 38.5%-38.5% 33.9%-33.4% 20% 33.3% 32.8%| 34.4% 34.5%| |30.2% 30.1% 10% 0% 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 RESEARCH BACHELOR'S COMMUNITY RESEARCH BACHELOR'S MASTER'S COLLEGE PRIVATE PUBLIC HOW FACULTY COMPENSATION HAS GROWN & SHRUNK Public schools have spent more on benefits and cut back on wage increases, while private institutions have been able to balance increases in both portions of compensation. 2002 - 2009 2002 - 2008 PUBLIC INSTITUTIONS Full-time faculty salaries Salary outlay per employee Benefit cost per full-time employee Compensation per employee 0.2% 0.9% 5.2% 1.7% RESEARCH -0,1% -0.6% 4,6% 0.4% MASTER's COMMUNITY COLLEGE 0.1% 0.7% 5.2% 1.5% PRIVATE INSTITUTIONS 0.6% 0,0% -0.3% 1.6% RESEARCH 0.6% 0,5% -0.8% 2.4% MASTER's 0.4% -0.5% 1.3% -0.2% BACHELOR'S The cost of benefits has increased significantly within the last decade BENEFITS AND COMPENSATION CHANGES 25% 20% 15% 10% 5% 19.5% 23.1% 20.1% 24.4% 18.9% 22.6% 19.3% 20.8% 18.4% 20.3% 19.3% 20.3% 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 PUBLIC PRIVATE Subsidy and tuition patterns can vary significantly by state TUITION PATTERNS BY STATE Net tuition portion of E&R Average subsidy portion of E&R CT $9624 $17935 35% MN $11141 AK $5126 WA $10192 $14375 44% $20203 20% $14134 46% $14144 40 CA $8268 VT $17797 DE $14039 $4395 80% $8027 64% HI $6471 $14948 80% $15421 29% $6065 70% $11356 52% $9133 53% $14021 24% $8424 53% NY $5610 PA $14479 AL $8358 IL $9592 WY $4310 IN $9589 TN $6737 NC $6115 NJ $12490 $11115 38% $11723 36% $5057 78% $8928 50% $10637 40% $6187 65% $6312 62% $7682 52% KY $8565 NV $6534 MI $10364 MA $10205 JA $8450 $3863 77% $7889 52% co $11214 USA $8030 VA $9602 $6305 60% $5908 64% $7077 57% $8071 48% $3863 74% $3181 79% $7024 55% $6865 54% OH $9947 MO $8743 MD $7468 sC $11214 NH $11644 $7627 $7625 ND WI $8760 36% $1828 87% $6575 51% $6311 53% $5962 55% $5296 60% $8154 39% $3863 70% UT $5129 RI $11813 KS $6911 AZ $7109 OK $7427 ME $8069 ID $5186 wV $9227 TX $7148 $5636 57% $5862 53% $7520 39% $3733 69% GA $6611 NM $4709 OR $8458 LA $4726 $7296 41% $7183 41% $6183 49% $5786 52% FL $4785 SD $5782 MS $6020 NE $5484 $6238 47% $3408 70% $51411 51% MT $7827 AR $5685 $2500 $5000 $7500 $10000 $12500 $15000 $17500 $20000 $22500 $25000 HOW THE REVENUE GAP IS FILLED Public sector tuition increases replace institutional subsidies rather than finance new spending Public Research $369 |-$751 $92 Public master's $225 -$590 $26 $113 -$488 -$254 Public community college $293 $907 $536 $352 Private research $381 $298 O $200 $400 $600 -$800 -$600 -$400 -$200 0 -$400 -$200 $200 $400 $600 $800 $1000 Private master's Private bachelor's Net Tuition State and local Education and appropriations related spending TRANSPARENCY IS KEY Many students are paying more into their education, than is being spent on them. As a result, institutions can no longer claim every student is being subsidized equally (or at all). Institutional policy holders should communicate transparent metrics regarding subsidies and average cost. Data Sources "Trends in College Spending: 1999-2009. Where does the money come from? Where does it go? What does it buy?". Donna M. Desrochers and Jane V. Wellman. The Delta Cost Project, Lumina Foundation for Education. 2011. ACADEMIC EARTH Academic Earth makes a world-class education accessible to everyone by offering over 450 free online courses from the world's top universities such as Yale, Harvard, and Stanford. Visit us at www.academicearth.org.