Not All Higher Education Spending is Created Equal

At least that’s the conclusion reached in a new working paper from Cornell University’s Higher Education Research Institute. First mentioned in Inside Higher Ed, the paper takes advantage of data from the Delta Cost Project to study the relation between certain types of higher education spending and student achievement.

Specifically, the researchers looked at four different categories of spending:

• Instruction
• Student services, such as supplemental instruction, on-campus organizations, and other “activities that contribute to students’ emotional and physical well-being”
• Academic support services, which includes spending on libraries, curriculum development, and other items that “support the instruction, research and public service missions of the university”
• Research
  

Expenditure figures were calculated per full-time equivalent (FTE) students. Federal graduation rates, meanwhile, were the researchers’ barometer for student success.

Overall, the researchers found that increasing student spending on either instruction or student services led to statistically significant gains in an institution’s graduation rate. Increased spending per student on research, meanwhile, had the opposite effect.

Intuitively, this makes sense: spending money on things that deal directly with students improves their academic success, while expenditures on research or other areas that could draw professors away from students do not.

But it’s the second part of the paper’s findings that is really noteworthy. According to the data, spending $500 more per student on student services leads to a larger increase in graduation rates than an equivalent spending increase on instruction. This outcome is even more pronounced at schools with low average SAT scores, high numbers of Pell Grant recipients, or low graduation rates. These findings even held when treating spending as a zero-sum game. The researchers found that graduation rates still rose if an increase in student support spending was offset by an equivalent decrease in instructional expenditures.

These findings have important public policy ramifications and should be good news to schools with strapped budgets. It suggests that once a certain level of instructional spending is reached, schools may be better off directing dollars toward supplemental assistance, rather than just plunking more cash down on professors or adjuncts. For schools with monetary problems, this matters. It means they could spend money on cheaper alternatives to instructors, such as tutors or (after sunk costs) a computer lab, saving money and boosting student success in the process.

The redirection of spending from instruction to student support is similar to the model used by the National Center for Academic Transformation (NCAT), which has helped redesign over 100 courses by using a combination of technology and better planning. For example, Virginia Tech worked with NCAT to completely revamp its linear algebra classes, replacing expensive lecture sections with a math emporium, where students could go at any time to work through materials on a computer with tutors often on-hand to provide assistance. This model not only reduced per-student course costs from $91 to $21 (an annual savings of $140,000), but student learning improved in most areas. Similar results occurred at the University of New Mexico, which redesigned a psychology course that had disproportionately negative outcomes for minority students.

As the NCAT model attests and the working paper confirms, substituting spending on instruction for student support can have real benefits for those enrolled. At schools that do not have much existing student supports, this also could provide a route for cost savings at no sacrifice to academic learning. (The paper looks at four-year institutional data, but community colleges appear to be good candidates for similar spending changes given their limited resources and characteristics similar to the high-Pell, low-grad rate schools described in the paper.)

While these findings are important, there are some real limitations to the available data. Student support is a very large and all-encompassing category that includes everything from tutoring to the always-maligned climbing wall. Without greater disaggregation it will be impossible to know exactly what factors make the greatest contribution to increased student success. But based upon the findings from NCAT, it’s a decent guess that the success comes more from the emporiums than from the fake rock facades.