Public colleges and universities are facing many compelling challenges in the 21st century, among them, a greater demand for institutional accountability and affordability, as well as declining financial resources. Although tuition rates and fees are increasing, institutions are still experiencing financial difficulties and the public’s opinion of higher education is disparaging. Leaders within the institutions are charged with developing new and creative strategies to improve the management of both institutional expenditures and financial resources. This paper will explore some of the financial challenges facing institutions of higher education, with particular focus on cost containment initiatives as a practical option to address the budget impediments associated with rising cost of expenditures and shrinking pool of financial resources for higher education. Special attention is given to evidence supporting cost containment practices and two case studies on institutional leaders have taken control of their operating costs through successful implementation of cost containment initiatives. Financial Challenges Over the course of nearly four decades, higher educational institutions have felt the impact of progressively subsiding state funding. In 1980, community colleges received 48 percent of the government funding allocated for public higher education, versus 34 percent in 1995 – a difference of 14 percent over a span 15 years (Gumport, 2003). The retrogression of government funding for all public higher education went from 44 percent in 1981 to 32 percent in 1997 – a difference of 12 percent (Gumport, 2003). Schmidtlein and Taylor (1996) explain that the states’ share of support for public higher education declined by 6.... ... middle of paper ... ...al funding. Sectors such as security, K-12 education, and health care have started to gain more attention from government officials, helping those sectors receive an increased piece of the government-funded pie (Goldstein, 2005). AASCU (2012) reports that states are feeling pressure from Medicaid programs, employee health programs, state employee pension programs, unemployment insurance programs, and funding commitments to K-12 education. In fiscal year 2012, Medicaid was estimated to gain an increase of 29 percent in funding, compared to the previous fiscal year (AASCU, 2012). Figure 1 shows nationally declining state support for higher education over the fiscal years of 2008 through 2013. The largest reductions had taken place in fiscal year 2011-12, dropping from $78.383 billion in FY2010-11, down to $72.001 billion, a reduction slightly over 8.1 percent.
What stands out about American universities today? Is it the academic opportunities offered to students, experienced faculty, or strong sense of community? Or...perhaps they have lost their focus. It is not uncommon for universities to focus their efforts and budgets elsewhere; by building state of the art gyms, for example, remodeling luxury dorms, grooming campuses, or creating more management positions. College students and professors alike are subject to the nationally occurring changes in higher level education. Colleges are becoming commercialized and tuition is rising, but is the quality of education improving? In “Why We Should Fear University, Inc.”, Fredrik DeBoer is able to provide a personal take on the issue of corporate domination
School funding is a recurring issue in the modern era. Debates ranging from give schools more money, to get rid of the system in place and reform a new idea have been plaguing the world over the years. “The American Recovery and Reinvestment Act, signed in 2009, provided more than $100 billion in education aid to offset budget cuts..” (School Finance). Later, “Congress provided an additional $10 billion in 2010 to avert mass teacher layoffs (Education Week, "Total Recovery Act")” (School Funding). These numbers are just a sample of the struggles in school funding, that is costing a ton of money to keep afloat. “There are many ways schools fund varying from state to state and even school to school. Income taxes, corporate taxes, sales taxes, and other fees provide 48 percent of the elementary and secondary school funds. 44 percent of local districts draw money from local property taxes. The federal government makes up approximately 8 percent of state education budgets. These funds are a dealt out on a per-student basis, and categorically to ensure enough resources for each special program or facility” (School Funding). These funds play a huge role in every student's education, either positive or negative. The three main areas that need to be addressed in the school budget are extracurricular funding, building and equipment maintenance, and last but not least staff funding.
Allan and Davis mention the spike of college cost since 1995 has increased by 150 percent; student debt has increased 300 percent since 2003, and with education, second to the mortgage industry in the nation’s debt, America needs to redirect their attention to the future and focus on education (Allan n. pg). Budget cuts from national to state
The author, Julia Brookshire Everett commenced the article, “Public Community Colleges: Creating Access and Opportunities for First Generation College Students”, by first characterizing first- generation college students and also expounding on the difficulties first-generation students encountered when acquiring post-secondary degrees. According to Everett (2015), the term ‘first- generation college student’ was first coined in the 1960s in order to regulate student eligibility for federally financed programs to aid students from low-income households.
As the high school chapter is coming to a close, many students have to make a decision that will affect the rest of their lives. Hopefully, for many that decision is to enroll in a college and attain a higher education. However, as tuition costs rise, students have to take a second look at their options for a better future. A community college is that second look for many because it is the less expensive option. From 2007-2009, enrollment for community colleges has increased by 24 percent (“College costs and the CPI”). Students aren’t choosing a college for educational purposes because they are overwhelmed by financial issues. They are attending community colleges so they will be able to graduate with a lower debt. Some seniors have wanted to attend a certain university all their life and they work toward that goal through grade school; however, they are hindered by soaring tuition for that college. Students should be able to attend a private university if they mee...
Since the 1980’s the cost of attending colleges have increased rapidly. Rising costs of for Medicare, highways and prisons have caused many states to reduce a percentage of their budget for higher education. Colleges and Universities currently face a very serious challenge:
Reported in 1995, public education expenditures per student are higher in the nation's smallest districts whereas students receive an average fully adjusted expenditure of $4,862 versus $4,216 in the largest district’s 10,000 students and above. (Johnson 4 ) Since 1995, enrollments in the urban public school system have doubled up to 62 percent in the 2010-2011 school year. Still, they received less money. Local governments rely on property taxes as a source of revenue to pay for schools. Yet people in the urban areas pay the higher tax than suburban and wealthy communities, states on the other hand, relies on The Average Daily Attendance (ADA), which calculates state aid to school districts, tends to discriminate against urban school districts with high absentee rates automatically, and excludes 15 percent of its student aid.
... through the years after the Great Depression the Unites States staked a claim in the educational advancement of its citizenship in order to build a strong economy. However, unlike years past, public ownership and support of higher education has decreased in the face of growing inflation and the nations changing economy.
Defense receives the most support and money. Politicians support military spending, mainly because it is “the only form of large-scale public investment that can consistently win political support” (Pollin). However, the heavy support for military spending is counterproductive for our nation’s economy. Since military spending increased in 2001, several industries and programs have had to “bite the bullet.” The Department of Education often gets fewer funds each fiscal year to cover the military budget. Then again, the United States leads all countries in money spent on education. The U.S. education system is well funded, but that statistic is very misleading. If the high cost of college is excluded, the United States ranks slightly above average in education spending (OECD). Per the OECD, U.S. spending is decreasing at a 1% average (OECD). This doesn’t seem like much, but it is still a step in the wrong direction. Only Mexico, Iceland, and Ireland have cut more (OECD). Coincidentally, the percentage of teachers that quit within five years is extremely high at 46% (OECD)! This isn’t surprising considering all teachers in the U.S. work so many hours and are still underpaid. U.S. primary school teachers spend the most time in the classroom amongst all PISA countries
The skyrocketing price of college tuition is causing a tremendous concern over whether higher education will be a viable financial concept to the average citizen over the next decades. Some families have opted to explore different means of obtaining a higher education for their children as these costs escalate. There is overwhelming evidence that colleges need to restructure the way they are run because tuition prices are increasing at a rapid rate causing changes in the way students fund their education and in the way the government provides educational subsidies.
As The “Progress of Education Reform” suggests, tuition discounting is major contributor to the rising cost of college in the sense that while it provides a tuition discount to the one particular student receiving the grant or scholarship it places a heavier burden on the majority demographic that attends the university without such discounting. (The Progress of Education Reform” 1). In contrast to popular opinion, scholarships and grants which are normally regarded as blessings are ironically a contributing factor to rising tuition prices. Basically, the universities have to make up for the money they lost by awarding the scholarships so the majority of the student population who did not qualify feel it in their pocketbooks. A final cause of this ludicrous tuition spike is the shift in university budgets to cater to the administration departments of the schools. Jobs in this department are non-teaching jobs that provide student services ranging from student safety to counseling and wellness programs. These jobs are definitely
Block, Gene D. "Public Higher Education: Too Big -- and Far Too Important -- to Fail." The
This requires colleges and universities to raise tuition to students to cover the spread. The interesting fact is that, per Belkin, “Universities are not spending more money educating students than they have in the past.” With this two things are known so far; the first is that the government has reduced its funding per student and that the cost to educate each student has not risen. Dr. Fichtenbaum is referenced in the article, “How to get College Tuition Under Control” by Douglas Belkin in which he says, “Between 1987 and 2012, in real dollars, government support has declined from $8,497 to $5,906 per student.” To put the cost of tuition in perspective Roger Fillion, who wrote the article “Tackling Tuition,” also talks about how tuition has increased by 722% since 1983 while the next closest comparison is healthcare cost which have increased by 356% since 1983 (17-19). Douglas Belkin also points out the fact that states are covering less of colleges operating costs which must be paid for somehow. Therefore, the increase in tuition must be coming from other sources. In the same article, Dr. Fichtenbaum talks about what has caused college tuition to rise. The reason that many people state
With the rapid growth of college tuition, it has become an important issue in higher education. College Tuition is simply defined as the charge or fee for instruction, at a private school or a college or a university. Most people agree today that college tuition is too high or that it needs to be completely dismissed. There are some however, that may disagree with the claim about college tuition and state that college tuition is necessary for college growth, and it’s primary purpose is to pay for college expenses to support the institution financially. Research shows that college tuition is too high and that debt has become a standard in America after attending post-secondary school.
As colleges’ funds dry up, colleges must turn to the public to further support higher education. By raising state taxes, colleges can collect funds to help improve the school’s budgets. The state provides funds from the taxes for colleges to receive a certain amount for each student currently enrolled. All community and traditional four year colleges collect these funds in order to maintain the school’s budget. As reporter, Eric Kelderman states, “less than a third of colleges’ budget is based from state taxes”. The school’s budget is how colleges are able to provide academic support programs, an affordable intuition, and hire more counselors. Colleges must now depend on state taxes more than ever for public colleges. Without collecting more funds from state taxes, as author, Scott Carlson explains how Mr. Poshard explains to senators “our public universities are moving quickly toward becoming private universities…affordable only to those who have the economic wherewithal to them” (qtd. in.) Public colleges must be affordable to anyone who wishes to attend. If colleges lack to provide this to students, it can affect dropouts, a student’s ability focus, and cause stress. The problem of lack of funding is that colleges have insufficient funds. Therefore, the best possible solution for the problem of lack of funding would be increasing and collecting more funds from state taxes.