Sunday, July 21, 2013

Increases in Higher Education as a Result of Non-Essential Educational Services

Higher Education is changing and may be indicative of some challenges that will need new solutions and better ways of managing the educational system. A report by the Joint Legislative and Audit and Review Commission (JLARC) to the general assembly of Virginia indicates a number of important education trends such as cost, state investment, secondary higher education services, student loan debt, and graduation rates of both Virginia and the nation. Even though the report focused on Virginia it did highlight some national trends and changes. 

A Virginian report indicates that the majority of newer higher education costs are a result of auxiliary services. At 15 Virginia based higher education institutes,  spending increased from $2.6 to nearly $6 billion dollars in the past two decades. Staff salaries, benefits and maintenance were not the majority of these increased costs. Higher levels of spending were found in academic services, research, academic support, student support, housing, dining and sports. 

Since 1991 to 2011 the institutes of higher education collected more revenue than many comparable institutes in other states. In 1991 they collected approximately $16,229 to a national average of $10,952 while in 2011 they collected $35,000 to the national average of $27,000. State funding of this cost declined from 27% in 1991 to 15% in 2011. Thus, even though more money is being collected, more of that money isn’t necessarily making it into core educational functions. 

This is not unique in the sense that most states are investing less in higher education in terms of total percentage of costs. The national average in 2011 was 39% and this has declined to 20% in 2011. Together it indicates that not only Virginian traditional education costs more but also is becoming more expensive nationally. The problem is that the increase in spending is also matched by declines in state spending. It appears to be providing a trend toward a collision course where college becomes strictly a student concern. 

Despite these difficult statistics Virginia has done better than the national average in graduating approximately 46% of students within four years. This is good news as this means students are staying focused and getting out of college faster thereby reducing their costs and increasing their overall productivity to the economy. The faster students can learn needed skills and move out into the working fields the better their rate of investment return. 

Problems do arise when students are shouldering a greater proportion of costs. As state funding has declined students have had to increase their debt load to continue their education. In 1992 the average student loan amount was $3,318 while in 2011 it was $9,893 meaning that there was little or no way for students to attend college without hedging out their current education with future earnings. 

If we take a critical look at this information we may find that increases of costs not based in instruction as well as decreased state spending creates a collision course for student loan debt. As traditional higher education institutes raise their spending in services outside of instruction such as room, board, and student support and sports they leaving behind a proportion of their traditional purposes. Yet these prices come with greater student loan burdens on students who have little to no option but to hedge their future earning power to pay for these services. On a positive note the encouragement of an actual four year degree helps to move students from learners to producers in a quick paced manner. 

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