Administrative Salaries, Construction Not to Blame for Tuition Increases at Universities

Posted By Candace Talmadge on May 19, 2015 at 10:59 am
Administrative Salaries, Construction Not to Blame for Tuition Increases at Universities

Drastic cuts in state-level funding for higher education and soaring costs for healthcare insurance are the primary drivers of huge college tuition hikes, according to recently published research from Demos, a public policy think tank.

These findings are at odds with the common perception that administrative bloat, campus construction booms, and the availability of grants and student loans are to blame for rising tuition, according Robert Hiltonsmith, a Demos senior policy analyst who wrote the report.

State funding cuts largely to blame

Hiltonsmith delved into the National Center for Education Statistics’ Delta Cost Project Database, which tracks how colleges spend their money. He categorized public four-year colleges either as research institutions or master’s and bachelor’s universities. Research institutions enrolled about 60 percent of all four-year public college undergraduates between 2001 and 2011; master’s and bachelor’s colleges, about 40 percent.

During that decade, average tuition rose by close to $3,000 per student at public four-year universities. The report found that declining state appropriations for higher education accounted for 79 percent of the growth in tuition costs for public research institutions over the past decade, and 78 percent of the rise in tuition levels for public non-research universities.

State support for research institutions fell by $3,081 per student between 2001 and 2011, and by $2,067 per student at master’s and bachelor’s colleges. Since state money and tuition covers almost the entirety of education and related expenses, reductions in state appropriations have shifted a huge portion of these expenses onto individual students via much higher tuition and rising student debt. Education and related expenses refers to teaching, student services, and related administrative and operations costs.

Strategies and solutions

“Cuts in state-level funding have certainly played a role in tuition increases, and unfortunately, it doesn’t appear that there will be significant changes in that practice in the near future,” said Blake Johnson, a spokesman for Complete College America, a nonprofit focused on helping college students improve their chances of graduating.

“With that in mind, we have to focus on real solutions,” Johnson continued. “Our best option is to implement strategies right now that ensure students are able to complete on time, saving them and their families tens of thousands of extra dollars in the costs of attendance.”

State funding cuts had the same impact on tuition at community colleges, which provide “a vital pathway to a degree, particularly for low-income students or students of color,” Hiltonsmith writes.

Hiltonsmith found the primary driver of rising tuition at both types of institutions to be sharp increases in the costs of employee healthcare coverage, which rose $2,700 per employee between 2001 and 2011, a 40 percent hike. No other type of expenditure category showed anywhere near the same level of increase between 2001 and 2011.

Other key report findings include:

  •  Six years after the great recession, state funding of higher education remains 27 percent below its pre-recession level.
  •  Instruction costs are responsible for 9 percent of increased tuition at research institutions and 11 percent at master’s and bachelor’s universities, due largely to rising health insurance costs.
  •  Administrative and support funding is responsible for 6 percent of increased tuition at research institutions and 5 percent at master’s and bachelor’s universities, again on account of health insurance premium hikes.
  •  Campus construction accounts for just 6 percent of increased tuition at all types of four-year public institutions.



Candace Talmadge
Candace Talmadge has been a professional writer since 1976. She has been on staff or reported and written freelance for media that includes Adweek, Advertising Age, BusinessWeek, the Dallas Times Herald, the International Herald Tribune, The New York Times, and Reuters America.

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