Article posted on April 5, 2012

In times of economic and financial scarcity, institutions of higher education must allocate resources in ways that maximize not only service to their mission, but also ensure students are provided with a high-quality education. Current public opinions related to university finances rest mainly in universities have not only decreased their investments in students, but they have shifted focus away from high-quality instruction to administrative and/or business-related activities. The data below illustrate a continued commitment to increasing high-quality educational delivery both through consistent investment in instructional activities and the overall student experience.

Keeping up with the Joneses…
Are Public Institutions Increasing their Investment at the Same Rate as their Private School Counterparts?

Between 2006 and 2010, private institutions experienced an inflation-adjusted growth (using the Higher Education Price Index) in their per-student total expenditures greater than public institutions by factor of 1.56—1.86% compound average growth rate for public schools compared to 2.92% compound average growth rate for private schools. In 2006, the gap between public and private institutions was $3,052 per student, and in 2010 the gap had increased to $3,659 per student—a 20% widening of the total expenditure gap.

Actual Total Per-Student Expenditure by Sector

(2010 Constant Dollars)

Institutional Control 2006 2007 2008 2009 2010 CAGR
Public Institutions $17,301.50 $18,396.10 $20,614.70 $21,358.40 $20,895.40 1.86%
Private Institutions $20,354.10 $20,993.70 $23,161.40 $24,662.70 $24,554.80 2.92%

This factor increased to 2.69 when examining solely Doctoral/Research Universities—1.75% compound average growth rate for public Doctoral/Research Universities compared to the 4.70% compound average growth rate for private Doctoral/Research Universities. In actual dollars terms, public institutions have increased their total inflation–adjusted, per-student expenditures from $27,448 in 2006 to $32,810 in 2010. During that same time period, private institutions have increased from $44,405 per student to $58,604 per student. While both sectors are increasing their per-student investment, the gap between public and private institution per-student expenditures has widened by 52%.