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A Great Free Book on Campus Finances That You Should Read

Andrew Comrie’s freely available Like Nobody’s Business is a one-stop comprehensive guide to how money works on campus.

May 3, 2021
 
 

During the past decade, higher education came under attack from all sides. Critics on the right complained about declining academic standards and rigor and the suppression of free speech, while those on the left called out overpaid senior leadership and administrative bloat and, at times, an overemphasis on research at the expense of teaching and vocationalism at the expense of the liberal arts.

Despite disagreement about the root causes, all sides agreed that tuition and student and parental debt were far too high and graduation rates much too low. A belief that graduates were ill prepared for the workforce also gained widespread acceptance.

Efforts to elevate the conversation about higher education finance, however, have fallen largely on deaf ears.

A growing body of scholarship has identified the factors that have contributed to higher education’s economic challenges.

  • The rapid growth in the proportion of the population attending college, including a growing number of students who had received an uneven or substandard high school education and who possess risk factors that made it more difficult to graduate in a timely manner. These included coming from a low-income background, commuting to campus, attending part-time, transferring from one institution to another, working full-time or caring for family members.
  • Increasing institutional costs, including the cost of benefits, compliance, development, library resources, maintenance, technology and utilities, as well as enhanced standards of care, an increased emphasis on research and the emergence of new fields of study, which could not be fully recouped through higher tuition.
  • Resource constraints that resulted in increasing class sizes, the elimination of breakout and discussion sections in foundational classes, inadequate support services that included student-adviser ratios of 1,000, 1,500 or even 1,900 to one, and increased reliance on graduate students, postdocs and adjuncts and lecturers to teach foundational courses.
  • A shift in student interest from the humanities and education toward more applied, vocational, technical, STEM, health care and business-focused majors.

I am pleased to say that anyone who’d like to know more about the economics of higher education now has a resource that I recommend wholeheartedly.

Andrew C. Comrie, a former University of Arizona provost and a professor of geography, development and environment, has written the most accessible, thorough and fair-minded account of how colleges and universities have responded to cost pressures and resource limitations that I have read.

Filled with up-to-date data, graphics and references to the latest scholarship, the book is available for free and can be downloaded.

Given the number of books on the economics of higher education -- by Robert Archibald and David H. Feldman, Steven G. Brint, Charles T. Clotfelter, Ronald G. Ehrenberg, Stephen C. Ehremann, William F. Massy, and Robert Zemsky, among others -- what makes Comrie’s distinctive?

In addition to the book’s balance, readability and depth of research, its topical coverage is exceptionally broad. This volume will certainly become the one-stop reference and go-to resource for information about revenue and expenditures by institutional type, the revenue significance of out-of-state and international students, the economics of public-private partnerships and outsourcing, the costs of the research, the size of athletic subsidies, the viability of fossil fuel disinvestment and socially responsible investing, and the financial benefits of a degree.

Other features that stand out include:

1. The volume’s focus on trends, including trends in per-student revenue, college affordability, campus construction, deferred maintenance and faculty workloads.

Comrie’s dynamic, diachronic trend analysis makes it clear which problems are long-standing (such as diminishing state funding on a per student, inflation-adjusted basis, which dates back to the 1970s), which are more novel, which trends are worsening and which are improving (like dramatically rising graduation rates -- up 15 percent at privates and 35 percent at publics). Especially striking is his finding that higher education spending trends, when adjusted for inflation and considered on a per-student basis, have increased under 1 percent annually for over a decade.

2. The book’s stress on institutional variation, including marked differences in funding, resources, endowments, size, mission and selectivity.

Comrie underscores a point too often obscured: that the higher educational ecosystem is highly differentiated and that colleges and universities attract very different student populations and must meet their needs with very different levels of resources. Readers will benefit enormously from his analysis of discount rates, tuition and merit aid levels, revenue per FTE, IT expenditures, reliance on part-time faculty, cost per student credit hour by discipline, per student spending by state, and instructional expenditures by institutional type.

3. The manuscript’s insights into higher education’s competitive dynamics and stratification.

Colleges and universities exist within an increasingly competitive marketplace, which pressures schools to act in ways that some might consider inefficient or unbecoming and which places the broad-access institutions that serve the bulk of undergraduates at a terrible disadvantage.

What are some of the insights the Comrie offers? Here are 10:

  1. The United States is the country with the highest household contribution to college expenses, which depresses the enrollment and persistence of students from low-income backgrounds.
  2. While the number of campus employees has increased (reflecting student enrollment growth), the share of instructional to noninstructional staff has remained flat. Nor has the number of administrators increased relative to faculty or students. The fastest-growing professional staff segment has been student support services, who perform work that faculty would otherwise do. Student service spending per FTE doubled at publics and tripled at privates over the past three decades.
  3. After a quarter century of salary growth, inflation-adjusted faculty salaries have remained flat since 2009. Meanwhile, the salary premium at private institutions averages 17 percent more for instructional staff and 14 percent more for noninstructional staff, with the figures much greater at elite privates.
  4. After adjusting for enrollment growth, the full-time faculty-to-student ratio at most publics has remained constant, while it has grown modestly at most privates.
  5. Over the past two decades, the percentage of full professors has declined and of assistant and associate professors has remained flat, while the percentage of lecturers and instructors has increased, with part-time faculty most common at private and public master’s degree-granting institutions and community colleges.
  6. The cost of adding a Ph.D. program can average as much (or more) than $1 million a year even with infrastructure and faculty salaries already in place.
  7. Most students who drop out do not do so because they were academically unprepared or perform poorly, but because of financial and life issues.
  8. While out-of-state and international students do contribute to net tuition revenue at public universities, even they receive institutional subsidies, because net tuition revenue covers only about half the full cost of providing a student’s education.
  9. University research expenditures, adjusted for inflation, have doubled every 20 years, with 5 to 6 percent annual growth (even though research is costly for the institutions and most universities lose money on research).
  10. Investment in instruction is the primary area in which institutions increase spending when they move to a higher category or rank.

Comrie’s insider’s guide to university finances raises a crucial question that all campuses must address: How can colleges and universities best achieve the financial stability and sustainability necessary if they are to succeed at delivering on their academic mission?

As we think about university finances and what to do to serve students better, the answer lies in combining the institutional finance evidence -- so ably treated in the Comrie book -- and the student success literature, well described in Nathan Grawe’s scholarship, to help higher ed forge ahead.

Grawe, a professor of economics and social sciences at Carleton College, has identified strategies that broad-access institutions might adopt that promote equity and sustainability. The key is to increase enrollment at four-year colleges among precisely those groups with the lowest rates of college attendance -- Blacks, Latino/as and others from low-income backgrounds -- and raising these students’ persistence and graduation rates to a level approaching or equaling that of Asian American students.

Otherwise, as Grawe demonstrates, the gap in college attendance and completion is likely not simply to persist, but to widen.

The solutions are not a secret. The answers lie in enhanced retention efforts, strategic focus and improved student services.

I’d add this: a growing body of research has concluded that funding institutions has a greater impact on student success than giving money to students. This is not to say that Pell Grants shouldn’t be increased; they definitely should. After all, these grants haven’t kept up with inflation.

But if we want more bang for the buck, additional funding should go to institutions: to hire more advisers, implement better advising software and analytics, expand mentoring and coaching, offer tuition waivers, support nontuition financial assistance, and make sure that sufficient course sections are available when students need them.

Currently most federal investment in higher education goes to research and financial aid. I think it should be directed toward evidence-based reforms like those pioneered by CUNY’s ASAP and ACE programs, Stay the Course, One Million Degrees and Project Quest.

The annual per-student cost is relatively modest, ranging from about $4,700 to $5,700. This would be money well spent with a genuine payoff.

We know what to do. Let’s do it.

Steven Mintz is professor of history at the University of Texas at Austin.

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