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Spending Rose Across Categories, Fed Report Says

September 15, 2016
 

Since the late 1980s, colleges and universities have spent increasingly more per student across nearly every major spending category, according to a new report from a Federal Reserve Bank economist who says his findings indicate broad-based reasons behind rising college costs.

The report, an Economic Commentary released Wednesday by the Cleveland Fed and Senior Research Economist Peter Hinrichs, found inflation-adjusted per-student spending rising across categories at both public and private four-year institutions from 1987 to 2013. Private college and university spending growth outpaced that of publics in most categories, Hinrichs found.

Research spending experienced some of the highest growth, rising 62 percent, or $1,930 per student, at public institutions and 71 percent, or $3,647 per student, at private institutions. Student services also saw a high increase on a percentage basis, rising 54 percent, or $556 per student, at public institutions and 108 percent, or $1,881 per student, at private institutions.

Public university per-student spending only fell in operations and plant maintenance, where it dropped 8 percent, or $148 per student. Private university per-student spending only fell in public service, slipping 9 percent, or $131.

Hinrichs has previously found that the share of employees holding administrative positions in higher education has not changed substantially between 1987 and 2013, a finding many would consider contrary to popular belief.

 
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