The Growing Cost of College: Miami Edition
Just a quick note about the increasing cost of college. I’m very interested in the cost of college, and how college is paid for. Understanding the revenues and expenses of colleges is key in figuring out what we ought to do about soaring tuition prices and student borrowing.
Miami University is no exception in the trend of increasing prices for college. I’ve been looking over the official numbers from Miami’s Budget Office, and it seems that the real price of tuition at Miami’s Oxford campus has jumped. Inflation adjusted to 2013 dollars, tuition and student educational fee revenue has increased from $13,964.84 per student per year in 2000-2001 to $19,634.84 in 2013-2014, an increase of 40%.
What is the main source of this increase? Many commentators have pointed out that the pace of innovation in college education is slow, and so the cause might be that the productivity increases of college teachers aren’t keeping up with inflation. Others point to increased costs of benefits for employees.
At Miami University’s Oxford campus this is certainly not the case. We have trimmed positions, and trimmed benefits. As a result the amount spent, per full time student, on faculty, staff and benefits has actually dropped from $17,253.85 in 2000-2001(inflation adjusted) to $15,667.97 in 2013-2014. In 2000-2001 the student/faculty ratio was 17.26 to 1, today it is 17.85 to 1. (Source: Common Data Set)
So if per-student costs have dropped $1585, and per-student tuition and educational fees have increased $5670, where did that extra $7255 go? The largest component is surely the decrease in state funding. Per student funding from the state has dropped by $4563 since 2000.
So the cost of educating students hasn’t actually outpaced inflation, it has decreased relative to inflation. The main contributor to increased tuition is reductions in state funding. This still leaves about $2700 per student unaccounted for which must be going to non-educational expenses, or lost revenue in other areas.
If you have a better understanding of Miami’s budget figures than I do, I’d love to hear from you!
- This analysis is based only on the “Education and General” (E&G) budget for the Oxford campus.
- Revenue per student is calculated by dividing total tuition/fee revenue in the E&G budget by the number of full time equivalent (FTE) students.
- Educational costs are calculated by adding up the costs of faculty salaries, classified staff salaries, unclassified staff salaries, staff benefits, and staff support budgets. In other words, all expenses in the Oxford campus E&G budget except transfer outs.
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