Funding for Higher Education

April 14, 2013 - Chaouki Abdallah

The following are taken verbatim from the book: "Public no more: A new path for excellence of America's public universities" by Policano and Fethke.

"The primary activities of a public university involve recruitment, advising, academic instruction, out-of-classroom enrichment, career placement, and, finally, relationship building and promotion of the university to alumni and donors (both private and public). These primary activities are supported by such secondary activities as the hiring of faculty and staff, purchasing, new-program development (R&D), human resource management, and infrastructure activities such as IT implementation and facilities management. This interrelated set of discrete activities and processes produces the educational outcomes that are valued by students and society."

The following are the facts of higher education funding today as they are discussed in the book:
1) Enrollments are increasing, and state appropriations per student are decreasing.
2) While list-price tuitions are increasing, net tuitions are decreasing.   
3) Public support is declining relative to tuition revenue, yet students still pay far less than the full cost of higher education.   
4) Real revenue and real cost per student have been constant for over a decade, and there is evidence that product quality might be slipping.   
5) Cross-subsidies are a defining feature of public universities: low-cost programs subsidize high-cost programs; high-income students subsidize low-income students; lower-division students   subsidize higher-division students; undergraduates subsidize graduates; teaching-load reductions subsidize research activities; and clinical care subsidizes medical education and medical research. Many of these cross-subsidies are not sustainable.   
6) The scope and revenue base of noneducational programs (“enterprises”) in public universities are growing relative to the scope and revenue of traditional academic programs."

It seems to me that the biggest challenges to funding our university will have 2 components: adjusting our scope of activities, and efficiently execute those (primary & secondary) activities that we must engage in.

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