NCPA - National Center for Policy Analysis


May 5, 2008

Students are a growing source of revenue for colleges, but little of that money is going into classroom instruction, says the report by the Delta Cost Project, a Washington-based non-profit.  The study also finds that the percentage of students who complete a degree hasn't kept pace with increases in enrollments, revenue and total spending.

Leaders in higher education typically argue that spending increases are necessary to maintain educational quality, but states and institutions are spending money in areas that may not be in line with the public priority of preparing more graduates, says report author Jane Wellman.

The study examined only operating expenses, which include instructional costs -- primarily faculty salaries and benefits:

  • The fastest-growing operating expenses are related to research, public outreach and financial aid, the report says.
  • Other examples are student services, maintenance and academic support.

For the current school year, price increases ranged from 4.2 percent at community colleges to 6.6 percent at public four-year institutions, College Board data show.  The report does not address the quality of the education a student receives, but completion rates are drawing more attention in a competitive global economy.


  • The United States spends more per student than any other industrialized nation, yet it ranks at the bottom in degree completion (54 percent), says the Organization for Economic Cooperation and Development.
  • The organization average is 71 percent; the high is 91 percent in Japan.

Source: Mary Beth Marklein, "Value of College Education is Called into Question," USA Today, May 1, 2008.

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