Cut Student Services? Think Again

Study finds link between investing in student services and higher graduation and persistence rates.
July 29, 2009

The painful art of trimming a college or university budget -- often with the goal of protecting core academic programs while picking and choosing which support services to cut -- may just have gotten a bit more difficult.

A forthcoming working paper by a Cornell University graduate student, Douglas Webber, and Ronald Ehrenberg, director of the Cornell Higher Education Research Institute, found that in certain instances, graduation and persistence rates are linked to greater expenditures on student services. The research findings show a higher positive correlation between graduation rates and spending on student services -- including things like student organizations, additional educational tools, and health and registrar services -- than between graduation rates and instructional or research spending.

"The natural inclination is to protect core services, and what we are finding is that at some institutions, support services might be just as important," Ehrenberg said.

The report states that all else being equal, "an increase in student services expenditures of $500 per student, on average, would increase an institution's six-year graduation rate by 0.7 percentage points. Similar increases in instructional expenditures and academic support services expenditures would, on average, increase the graduation rate by about 0.3 percentage points, while an increase in budgeted research expenditures of the same amount would decrease the graduation rate by 0.7 percentage points."

The report also found that expenditures on student services increased the graduation rates more for schools with lower average test scores and more students receiving Pell Grants. "Put another way," the report reads, "their effects are largest at institutions that have lower current graduation and first-year persistence rates."

"What it may say is that for schools that currently have lower entry test scores and lots of Pell Grants, these are the schools where support services are more important and there may not be enough of them," Ehrenberg said. "What happens is intuitively what you think might happen. These student services matter most to those who might be most at-risk."

Webber and Ehrenberg performed a version of the study that may be more realistic in the troubled economy, in which subtracting $500 per student of "institutional expenditures" and reallocating it to student services still increased the graduation rate by 0.3 percent.

On the result, the report reads: "This finding is one that neither faculty around the country worried about declining funding for faculty positions nor critics of higher education who point to the wasteful growth of expenditures on non-instructional use are likely to be happy about. But our key words are 'on average.' What is true on average is not necessarily true for all categories of institutions."

These findings, according to Ehrenberg, are the first of their kind, mainly because of access to Integrated Postsecondary Education Data System data made possible by the Delta Project on Postsecondary Education Costs, Productivity, and Accountability. This has allowed for the use of information about 1,160 four-year institutions on a national scale.

Patrick Callan, president of the National Center for Public Policy and Higher Education, said the report affirmed an already widely known trend in higher education. "I think that's the kind of finding you expect, that for the first generation students, the kind of services they would need that help them stay in school, it's much more important," he said. "It's something to keep in mind as colleges and universities need to make cutbacks. These services help keep students in school." Callan further emphasized the need to "built budgets around the needs of your students."

Gwendolyn Dungy, executive director of NASPA -- Student Affairs Administrators in Higher Education, said the report confirms everything student affairs administrators have been saying along -- that student services are a vital part of academic success. "The largest number of people coming into the classrooms are racial minorities and first generation students, and they may not have the preparation," Dungy said. "If we acknowledge that they need this support, we increase their success. Access is not just about coming in, it is persistence and graduation. We do know that it makes a difference, and now here's the research."

However, she did not see this study alone as justification for putting additional funds into student services. Rather, she said, the goal moving forward is to start a conversation in which student services and academic services can collaborate on how best to provide for students in and out of the classroom.

A chorus of others agree that now is not the time to be finding new places to invest funds, but rather to hold colleges and universities accountable for their spending. For example, a report released by the Delta Project in January states: "As an industry, higher education still has not made the transition from cost accounting to cost accountability.... Despite numerous efforts to encourage voluntary adoption of common metrics, there has been little progress in translating cost data into information that can be used either to inform strategic decision making or to show the public how institutions spend their money."

Another study by the Center for College Affordability and Productivity found that "colleges have generally increased their staff relative to enrollment and the number of degrees awarded, especially in the back office." This has raised concerns that continued hiring is creating "administrative bloat."

Richard Vedder, who heads the Center for College Affordability and Productivity, commended the Cornell researchers' work and methodologies, but raised the cost question regarding the report's findings. If you have 1,000 students with low SAT scores (a group whose $500 per student investment would raise graduation rates 1.7 percent, according to the report) national averages dictate that 550 will graduate. Raising the graduation rate 1.7 percent would mean 17 more students graduate. While he admitted this was a positive outcome, he said that it comes at a steep cost of $2 million, if the college invests $500 per student per year. "The elasticity of graduation rates with respect to student services is pretty low," he said.

Instead, Vedder argued that the researchers should have made more prominent their finding that a $500 per student investment in research decreases graduation rates by 0.7 percent. "Schools that spend more on research can actually have negative effects," he said, noting that those universities generally have lower average ratings on

"This to me shows there are tradeoffs," he said. "[With research], you may be paying a cost in terms of hurting student services to the point of decreasing graduation rates. For the Cornells it doesn't matter, but at the State College of Last Resort, it does.... I'm just putting more emphasis on it than they are."


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