University Funding Up, Graduation Rates Down

OR: WHERE’S ALL THAT MONEY GOING, ANYWAY?

State agencies submitted their budget requests earlier this month, as state law requires, and all but one higher education institution that submitted a budget requested increases. That’s not surprising, since state-supported colleges and universities have seen cuts in their General Fund budgets since the Great Recession began – although it should be said that the cuts have been substantially offset by other sources of income, including tuition and fee hikes and federal stimulus money.

The real question, however, is not whether state-supported schools somehow deserve funding hikes, but whether funding hikes lead to better educated students.

The answer is: They don’t. Student costs and government funding have risen dramatically in recent years at South Carolina’s publicly funded universities; yet college academic achievement has stagnated. Why? Because the increase in funding is going mainly to administrative costs rather than student instruction.

From FY 2006 to FY 2011 the average level of total funding for the state’s 17 state-funded universities went up by 35 percent. Over the same time period the average tuition costs at these universities went up at an even more rapid rate of 39.2 percent.

What were the results of this increased cost and general government funding?

• From 2006 to 2011 the number of degrees awarded increased by 18 percent. The percent of degrees awarded only matched roughly half the increase in funding over the years.
• Only four out of the 17 universities listed in the budget had their percent of degrees awarded from 2006 to 2011 outstrip their funding increase over that time period.
• While all universities saw increases in total funding, seven out of the 17 universities actually saw their number of degrees awarded fall from 2006 to 2011.

A similar metric from the Commission on Higher Education shows that the four-year graduation rate for freshman entering 12 South Carolina universities (Clemson, USC, USC-Aiken, USC-Beaufort, USC-Upstate, The Citadel, Coastal Carolina, College of Charleston, Francis Marion University, Lander University, South Carolina State, and Winthrop) was only 40.5 percent. The six-year graduation rate for students entering these universities in 2005 was 60 percent.

To understand why more money hasn’t exactly created better results, take a look, first, at the growth of full-time employees – most of whom aren’t instructors – and, second, at the growth of administration as compared to instructional spending over a similar time period.

From 2006 to 2011, the average number of full-time employees (FTEs) at South Carolina’s publicly funded universities went up by 17.9 percent. According to The Integrated Post-Secondary Education Data System (IPEDS), which provides data on instructional and administrative spending for 13 of the 17 universities, the average growth in administrative spending from 2006 to 2010 was 41.5 percent – just 4.5 percent behind the 46 percent growth in instructional spending. State funding increases to higher education, in other words, have gone as much to administrative costs as to the core purpose of the institutions – instructing students. So while administrative spending is still about a fifth of instructional spending (around 20 percent), the pay hikes are clearly trending toward non-essential administrative costs.

Meanwhile, from 2011 to the present fiscal year, tuition has gone up on average another 7 percent at these universities. While the financial burden of attending college in South Carolina steadily increase, some higher education institutions are dolling out pay raises anywhere from $10,000 to as much as 20 percent to administrators and faculty.

With many publicly funded institutions shifting their focus from education to economic development – think for example of the grotesque financial boondoggle Innovista – it’s no wonder why academic achievement in the Palmetto State has stagnated.