Jane Wellman INTERNATIONAL SYMPOSIUM ON UNIVERSITY COSTS AND COMPACTS CANBERRA, AUSTRALIA
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Transcript of Jane Wellman INTERNATIONAL SYMPOSIUM ON UNIVERSITY COSTS AND COMPACTS CANBERRA, AUSTRALIA
United States Trends in Postsecondary Costs and Degree Attainment
Jane WellmanINTERNATIONAL SYMPOSIUM ON UNIVERSITY COSTS AND
COMPACTS
CANBERRA, AUSTRALIA14-15 JULY 2008
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Summary of Major Dynamics Affecting Costs and US Degree
attainment•Need to increase degree attainment•Persistent gaps in access and degree attainment affecting low income and minority groups•Funding needed to increase degree attainment with current cost structures is highly unlikely under current trends•Among public institutions, prices are increasing but spending is not – subsidy shift from state funds to tuition revenues •Privatization of revenues has not benefitted instructional function; competition is further increasing spending •Low income and minority students increasingly clustered in public two-year sector – where spending is low, and fewer than 30% of students get to a baccalaureate degree•Public perceptions/critique about higher education sharpest on issues of cost and cost management
Total Headcount Enrollment Growth by Sector, 1987-1998 and 1998-2005
Institution Type 1987 1998 2005Total 12,423,910 14,435,418 16,873,337 Public Research 3,184,465 3,468,988 3,886,981Public Master's 1,931,729 2,158,637 2,443,878Public Associates 4,115,676 5,075,690 6,035,652 Private Research 883,580 925,787 1,018,483Private Master's 841,881 1,031,028 1,241,227Private Bachelors 594,391 698,964 811,725 Proprietary 218,688 296,108 530,241 Other Institutions 653,500 780,216 905,150
U.S. Nationwide enrollment demand in 2005 at an all-time high
3
Growth steepest in public two-year, proprietary and private masters’
institutions…. Market shares dropping for public four-year and private research institutions
Sector Share of Enrollments Avg Annual Percent Change
Institution Type 1987 1998 20051987-1998
1998-2005
1987-2005
Total 100% 100% 100% 1.4% 2.3% 1.7% Public Research 25.6% 24.0% 23.0% 0.8% 1.6% 1.1%Public Master's 15.5% 15.0% 14.5% 1.0% 1.8% 1.3%Public Associates 33.1% 35.2% 35.8% 1.9% 2.5% 2.1% Private Research 7.1% 6.4% 6.0% 0.4% 1.4% 0.8%Private Master's 6.8% 7.1% 7.4% 1.9% 2.7% 2.2%Private Bachelors 4.8% 4.8% 4.8% 1.5% 2.2% 1.7% Proprietary 1.8% 2.1% 3.1% 2.8% 8.7% 5.0% Other Institutions 5.3% 5.4% 5.4% 1.6% 2.1% 1.8%
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But US educational attainment dropping in an international context – from #1 for older students, to #7 for 15-and above
•Reasons?•Other countries are increasing attainment and US is staying even•US better at access than degree completion•Attrition is highest among students who are the majority of new students•Declining high school graduation rates
The Attainment Challenge: Degree Completion Rates, 2004
SOURCE: OECD, Education at a Glance 2007
SURVIVAL RATES IN TERTIARY A (FOUR-YEAR) EDUCATION
54%60%
64% 65% 65% 66% 67% 67% 68% 69% 69% 71% 71% 73% 74% 74% 74% 76% 78% 79%83% 83%
91%
54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
New
Zea
land
Uni
ted
Stat
es
Swed
en
Hun
gary
Aus
tria
Cze
ch R
epub
lic
Pola
nd
Aus
tral
ia
Icel
and
Port
ugal
Mex
ico
Switz
erla
nd
Finl
and
OEC
D A
vera
ge
Ger
man
y
Bel
gium
(Fl.)
Spai
n
Turk
ey
Net
herla
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Uni
ted
Kin
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Gre
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Irela
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Kor
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Japa
n
Closing the Gap—Number of Degrees Required Beyond Current Production by
20257
15,600,000
10,500,000
16,200,000
0
5,000,000
10,000,000
15,000,000
20,000,000
To Meet InternationalBest Performing
To Close Equity Gap To Meet Manpower Demands
Collective Cost to StatesAssuming no change in tuition
$ 31.0 Billion = Annual Costs of Additional Students at Current $ per Student
$ 78.2 Billion = Current State Contribution
39.7% =Percent Increase in Annual State Support Needed
Average Cost to Students, Assuming: No Additional State Investment9
$ 2,565 = Additional Annual Costs to Students at Public Four-Year Institutions
47.9% Increase in Tuition and Fees
(Currently $5,355)
$ 1,824 = Additional Annual Costs to Students at Public Two-Year Institutions
108.8% Increase in Tuition and Fees
(Currently $1,677)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Private Research Private Bachelor’s Private Master’s Public Research Public Master’s Public Associate’s
Med
ian
Full
Educ
atio
nal C
ost p
er F
TE S
tude
nt, 2
006
Enrollment of FTE Students, 2006
United States: Money versus students: per capita spending per student (excludes research, service and auxiliary
enterprises) against student enrollments (2006)
$ spending/student; number of students enrolled
Source: Delta Cost Project IPEDS database.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
1987 1998 2005 1987 1998 2005 1987 1998 2005 1987 1998 2005 1987 1998 2005 1987 1998 2005
Public Research Public Masters Public Associates Private Research Private Masters Private Bachelors
Med
ian R
even
ues P
er FT
E St
uden
t (in
2005
dolla
rs) Restricted Revenues
Private Gifts, Investment Returns, and Endowment Income
State and Local Appropriations
Tuition
Source: Delta Cost Project IPEDS Database, 19-year matched set.
}
Estimated “general purpose”=Tuition and fees+state appropriations+ portion of private gifts
($/FTE/CPI-U /2005)
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General purpose revenues are declining as a proportion of revenues among public institutions
Nationwide trends in median revenues by major source, 1987 - 2005
}
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Average Annual Percent Change in Median Spending per FTE Student – Average Annual Percent Change in Median Spending per FTE Student – Publics 1987-1998 and 1998-2005 Publics 1987-1998 and 1998-2005
Public ResearchPublic Research Public MastersPublic Masters Public AssociatesPublic Associates
1987-19961987-1996 1998-20051998-2005 1987-19961987-1996 1998-20051998-2005 1987-19961987-1996 1998-20051998-2005
InstructionInstruction 0.5% 0.4% 0.6% 0.4% 1.0% -0.2%
ResearchResearch 3.9% 3.2% 4.3% 3.2% -3.7% 1.0%Public ServicePublic Service 5.0% 7.2% 5.4% 3.7% 2.1% 0.0%Academic SupportAcademic Support 2.3% 0.1% 2.0% 0.6% 1.0% 0.2%Student ServicesStudent Services 2.4% 0.9% 1.3% 0.4% 2.0% 0.3%Institutional Institutional SupportSupport 0.6% 0.9% 1.8% 1.2% 1.3% 0.5%Operations and Operations and MaintenanceMaintenance -0.4% 2.0% -0.6% 1.8% -0.3% 0.9%Institutional GrantsInstitutional Grants 9.5% 7.5% 7.6% 6.4% 6.1% 4.6%
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+
Spending increases most apparent in research, public service, and institutional grant aid
- +
Instruction and institutional grants funded from general funds; research and public service from designated revenues.
+
$4,602$6,328
$3,529 $4,649$1,974 $2,585
$15,215$17,469
$10,349$12,715
$9,767$11,970
$8,516$7,191
$6,085$5,416
$6,518 $6,051
$13,653
$16,635
$4,066
$4,075$8,175
$8,844
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
1998 2005 1998 2005 1998 2005 1998 2005 1998 2005 1998 2005
Public Research Public Master's Public Associates Private Research Private Master's Private Bachelors
Average Full Educational Cost per FTE Student, 1998 and 2005 (in 2005 dollars) – Excludes Spending for Research and Service
Average Subsidy Net Tuition per FTESource: Delta Cost Project IPEDS database, 19-year unmatched set.
Subsidy
Price$13,118 $13,519
$9,613 $10,065$8,492 $8,636
Cost = $28,868
$34,103
$14,414$16,790
$17,942
$20,814
As Educational Costs Rise, the Subsidy Share of Costs is Decreasing and Students Are Paying More
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The policy critique is sharpening
• Perception that higher education finance is a “dysfunctional top-line enterprise with no bottom line”
• Critique that the line between profit and non-profit is blurring
• Senate finance committee investigation into non-profit tax status
• Massachusetts state proposal to tax college endowments• Federal proposal re: excessive tuition increases