Cost Accountability in Higher Education

Cost Accountability in Higher Education

Anonymous. The Presidency. Washington: Spring 2009. Vol. 12, Iss. 2; pg. 10, 1 pgs

Abstract (Summary)

The report asserts that greater demand for student aid, tightening loan availability, dips in endowment assets and earnings, rising costs of debt payments, and deep state budget cuts all call for increased attention to spending, and a transition from merely cost accounting to cost accountability.

College and university students are paying higher tuition rates, but getting less in the classroom, according to a recent report from the Delta Cost Project, Trends in College Spending: Where Does the Money Come From? Where Does It Go? The report asserts that greater demand for student aid, tightening loan availability, dips in endowment assets and earnings, rising costs of debt payments, and deep state budget cuts all call for increased attention to spending, and a transition from merely cost accounting to cost accountability.

By examining state-by-state financial trends in higher education institutions' operating budgets, Trends offers a rare glimpse inside the black box of postsecondary education finance.

Key findings from the report include:

* Spending is increasing in some higher education institutions, but not in the places where the majority of students enroll. The fastest growth in enrollment has occurred in those institutions with the least resources and with the greatest evidence of actual spending cuts in the last few years-public community colleges.

* Aside from tuition revenues, the largest growth in revenues has been for research, public service, and auxiliary enterprises.

* The primary cause of tuition increases in public institutions is not increased spending, but rather cost shifting to replace losses in state appropriations and other revenues. In other public institutions, costs are declining even as prices are increasing. Private institutions are both raising tuition and increasing spending.

* The student share of costs is increasing relative to declines from institutional sources in all sectors except private research universities. Students who pay the full sticker price, on average, are paying very close to the full cost of their education.