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Policymakers | Costs

REPORT: Rising college cost outpaces improvements in graduation, diversity

CAMPUS REFORM   |  September 14, 2021 by Angela Morabito

An American Council of Trustees and Alumni found that spending on student services did not move the needle on graduation rates at 4-year public colleges.

‘Campus Reform’ spoke with one Johns Hopkins professor who called on colleges to ‘refund some of this money.’

Colleges’ spending patterns are driving up costs for students but do not necessarily improve graduation rates or increase diversity, according to a new report by the American Council of Trustees and Alumni. 

The report found that spending on student services, including diversity initiatives, may actually make campuses less diverse. Such spending drives up the cost of attendance, thereby making colleges less accessible to underrepresented groups. It states:

“Increases in tuition have even been linked to a decrease in student diversity in future years on public campuses, with a $1,000 increase in tuition and fees causing the racial and ethnic diversity of first-time, full-time freshmen to decline by 4.5%. For institutions pledging millions to offices of diversity, equity, and inclusion, this statistic demands attention. While there is little evidence that employing executive-level diversity officers will grow diversity on campus, passing the cost of these hires on to students is overtly harmful.”

The report compares increases in college spending to changes in the cost of attendance and the graduation rate. If colleges were spending money in ways that helped students, researchers hypothesized, then an increase in spending by a university would have a proportional increase in graduation rate or decrease in cost of attendance. 

Instead, researchers found that additional spending by colleges leads to only minor improvements in graduation rates. “While both public and private schools have seen modest gains in graduation rates,” the report says, “an increase [in graduation rates] of four percentage points for private institutions and seven percentage points for public institutions pales in comparison to the growth in expenses.”

Johns Hopkins professor Ben Ginsberg told Campus Reform that these findings shine a light on wasteful spending in higher education. 

“It is certainly no surprise that college spending levels currently have little impact upon educational quality,” Ginsberg said. 

“Colleges should spend money developing innovative programs and expanding their full-time faculties,” he continued. “Most colleges could cut their student services and administrative budgets by 30-50 percent without harming student learning.”

The report looked at three categories of spending: student services spending, administration spending, and instructional spending. 

Money spent on classroom instruction had the closest correlation to a rise in graduation rates. However, from 2010 to 2018, instructional spending grew the least out of the three categories (16 and 17 percent at public and private nonprofit four-year colleges, respectively). 

Student services grew by 25 percent at public 4-year colleges and 32 percent at private nonprofit 4-year colleges. But ACTA reports that “spending on student services had no correlation with graduation rates at public institutions, despite the fact that it is growing considerably faster than spending on instruction.” 

Speaking with Campus Reform, Ginsberg put these trends in context. 

“Over the last several decades colleges have lobbied successfully for higher federally-guaranteed student loan limits which have allowed them, in turn, to raise tuitions,” he said. 

To fix the problem, Ginsberg says colleges must be held accountable. “Part of a just solution to the student debt crisis,” he said, “would be a federally supervised ‘clawback’” that makes colleges “refund some of this money.”

This article originally appeared here.

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