Despite the rapid increases in college enrollment tuitions, the investment is not translating into better results. This is according to a new study entitled, "The Growing Imbalance: Recent Trends in U.S. Postsecondary Education Finance."
Higher education leaders insist that spending increases are necessary to maintain educational quality. However according to Jane Wellman, the report author, "what we see across a broad range of indicators is that states and institutions are spending money in areas that may not be in line with the public priority of preparing more graduates."
The study compiled federal data on revenue, spending, and enrollment at nearly 2,000 public and private institutions from 1987 to 2005.
Students are shouldering the additional burden from states that have pushed costs back into higher education institutions. Yet, a smaller share of institutional budgets are dedicated to direct instructional purposes.
According to the report, the fastest growing area of discretionary spending is financial aid. As institutions price themselves out of the market due to uncontrolled costs, the solution more often than not is price discrimination or the equivalent of a retail discount on tuition for select populations of students (eg. financial aid leveraging).
While the decline in state funding is a real issue for many institutions, "the (report) conclusions should also focus higher-education leaders on the need to think hard about how to better use the money they have rather than just focus on increasing revenue, " according to Travis Reindl, a program director for Jobs for the Future.
The report is clear call for leadership from some of the toughest jobs in the country - university administration.