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Understanding College Costs and Price through Delta Metrics

Understanding College Costs and Price through Delta Metrics. Education Writers Association National Seminar . Steve Hurlburt. May 17, 2012. The Delta Cost Project.

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Understanding College Costs and Price through Delta Metrics

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  1. Understanding College Costs and Price through Delta Metrics Education Writers Association National Seminar Steve Hurlburt May 17, 2012

  2. The Delta Cost Project • Mission: to improve college affordability by helping policy makers and higher education administrators understand higher education costs and productivity • Focus: how colleges and universities spend money; how tuition (price), other revenues, & spending relate to one another • Tools: reports and briefs; online analysis system; website with available resources

  3. Cost vs. Price • Cost: what institutions spend to provide an education to students • Price: what students pay to receive the education • Sticker price • Net price

  4. Why do college tuition prices keep rising? • Other revenues decline (“Cost shifting”) • State appropriations for publics • Private gifts, grants, and endowments • Spending increases

  5. Tuition revenue increases as state appropriations decline Net tuition revenues and state and local appropriations revenues per FTE student, AY 1999-2009 (in 2009 dollars)

  6. Making sense of spending • Major expenditure categories • Education & related (E&R) spending: Core educational mission • Education & general spending: All core operating expenditures • Total operating expenses: All spending • Focus on E&R spending: • Spending for E&R versus other functions • Spending within E&R: Instruction and student services vs. administration

  7. Total spending outpaced spending on core educational mission (E&R) Total expenditures per FTE student by grouped categories, AY 2004 and 2009 (in 2009 dollars)

  8. E&R spending has increased more in private institutions than publics Average E&R spending per FTE student by component, AY 2004 and 2009 (in 2009 dollars)

  9. Understanding costs, price, & subsidies in higher education • For not-for-profit colleges, price is generally less than costs • Subsidy: difference between costs & price • Price + Subsidy = Cost Subsidy Costs Price

  10. Tuition revenues are covering a larger share of costs Net tuition and subsidy shares of E&R costs, AY 2004 and 2009 (in 2009 dollars)

  11. Explaining rising tuitions: Cost-shifting or increased spending? Changes in net tuition, state and local appropriations, and education and related spending per FTE student, AY 2008-2009 (in 2009 dollars)

  12. Using data to improve oversight of college spending • Focus on patterns in spending for E&R • Is spending for instruction and student services being protected? • How are subsidies changing over time?

  13. Delta Cost Resources • Website (www.deltacostproject.org) • State profiles (www.deltacostproject.org/data/state) • Annual trends report • Issue briefs and other products • Trends in College Spending (TCS) Online (www.tcs-online.org)

  14. Delta Cost Resources: Helpful Staff Rita Kirshstein, Project Director rkirshstein@air.org (202) 403-5410 Steve Hurlburt, Deputy Project Director shurlburt@air.org (202) 403-6851

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