New Report Examines Trends in College Spending

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July 9, 2010

The Delta Cost Project's report, Trends in College Spending 1998-2008: Where Does the Money Come From? Where Does It Go? What Does It Buy?, the third in its series of studies on higher education finance, reveals institutions' greater reliance on tuition revenue during economic downturns and shifts in education-related expenditures.

During the decade, for example, net tuition and fee revenue (the difference between gross revenue and institutionally funded grant aid) at public research universities increased from 17 percent of total operating revenue in FY98 to 21 percent in FY08. At the same time period, state and local appropriations fell from 33 percent to 26 percent.

In addition, institutions spent a smaller share of funds on the direct cost of instruction, a category that consists largely of faculty pay and benefits. On average, instructional costs accounted for 40 percent of the education and general expenditures of private research universities in 2008, down from 42 percent in 1998.

The Web-based Trends in College Spending (TCS) tool is based on publicly available data from the U.S. Department of Education's Integrated Postsecondary Education Data System. TCS provide access to information on finance, performance, and enrollments for individual institutions, groups of institutions, or the nation as a whole. The data are presented using six primary "metrics" developed by the Delta Cost Project: enrollment, revenue, expenditures, cost/price/subsidy, performance (based on number of degrees awarded per 100 full-time equivalent students), and spending comparisons (education and related spending and enrollment compared with expenditures).