Show Us the Money | From the Bell Tower

By Steven Bell, Associate University Librarian, Temple University, Philadelphia, PA

A new report helps us better understand the money trail, but it also points to key gaps in what's getting counted


According to the legends of academia, "black hole" is the term that administrators use to describe the campus library. As a true astronomical black hole is said to absorb all light and matter so that it is never again seen, the phrase may offer the perfect metaphor when considered from the accounting department's perspective. However, if administrators took time to talk to their librarians they'd see where the money goes—and the value they get for the investment.

A growing problem for higher education is that to outsiders—especially our students, their parents, and taxpayers—colleges and universities must look like one giant black hole. The cost of tuition and fees increases each year, and it's not clear where the money goes or what benefits are derived. While some escalating library costs, such as subscription services and journals, are easily charted and explained, the complexity of higher education institutions is far less hospitable to financial transparency. Most of the students and parents still have no knowledge of the difference between sticker price and true tuition. Trying to figure out the revenue and expenses is a challenge for even the most quantitative among us, but help might be on the way.

Colleges are a "black box"
An organization known as the Delta Cost Project recently released a report titled "Trends in College Spending 1998-2008." It offers a fairly comprehensive look into college spending and revenue. What's interesting is that right up front the authors use something akin to that black hole metaphor:

How do colleges and universities spend their money? To most, it's a black box. The public looks at tuitions, states look at appropriations, trustees look at the endowment, and department managers look at their budgets. How colleges actually spend their money is barely understood by the general public and even many policy makers. In the current economic environment, opacity about college spending has to give way to greater transparency about spending, and an understanding of the relationship between spending and performance.

What's valuable about the report, beyond just making spending patterns more transparent, is that we begin to get a clearer picture of the stratification of higher education in America. As a news article about the report summed things up, it's evident that elite private institutions are spending far more per student than the public institutions where the vast majority of Americans earn their degrees. According to the director of the Delta Cost Project, Jane Wellman, "While the United States has some of the wealthiest institutions in the world, it also has a 'system' of postsecondary education with far more economic stratification than is true of any other country." Currently, the difference between what community colleges and private institutions spend per student is about $25,000.

Higher education is being country-clubified
Some of the findings will spark little surprise, especially on the revenue side. Government support for higher education has declined while the percentage of revenue from student tuition continues to rise to make up for revenue losses from other sources. It goes on to present some fairly startling observations. Things get more interesting when you look at the spending side. The shift between spending for instruction and student services is an attention grabber. For the former it's flat or declining while for the latter it's on the rise.

The difference is most pronounced at private institutions, where from 2005 to 2006 spending for instruction rose less than one percent but spending for student services rose just slightly more than six percent. Richard K. Vedder, a professor at Ohio University who studies the economics of higher education, is a fairly vocal critic of the way higher education institutions spend money. He referred to the increase in student services spending as "the country-clubization of the American university." He noted the irony of going after students with recreational activity and leisure time amenities rather than evidence of academic success.

How are we doing?
Academic libraries are included in a category called "academic support" that also includes computing, research support, and those things not directly related to instruction. We might think that with our teaching mission we'd be classified as part of instruction, but the government fails to agree. There's really no way to get specific data on academic spending for libraries, at least not from this report. But we can see that the per student amount spent on academic support is mostly flat between 1995 and 2006. For example, in the public research sector the amount per student was $2,067 in 1995 and in 2006 it was $2300. Comparatively, both instruction and student services fared much better. It's only in the private sector that academic support has kept pace.

The big picture
It's important to keep in mind, that while over the last few years spending for student services is up while spending for instruction is down, academic institutions continue to spend a far greater overall percentage of their funds on instruction—far more than any other category of spending. For example, in 2006, in the public research category institutions spent $8,711 per student on instruction but only $1, 202 per student for student services. In the private research sector those figures are $19,251 and $3,037, respectively.

So, while our feathers may get ruffled when we read about more money being spent on student services, questionable amenities or a growing administrative network, this report reminds us that instruction activities are far from being starved. Now, how do we get the organizations that compile these statistics and write these reports to give some thought to telling us more about expenditures for academic libraries?

Steven Bell is Associate University Librarian, Temple University, Philadelphia, PA. For more from Steven visit his blogs, Kept-Up Academic Librarian, ACRLog and Designing Better Libraries or visit his website.

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