Despite Funding Cuts, Prestigious Public Universities Spend More Than They Used To, Not Less

I mentioned this incidentally on Twitter and a lot of people didn’t believe me, but liberals are making a mistake when they draw a straight-line connection between state government budget cuts and college tuition increases. As this data from the Delta Cost Project (PDF) makes clear, with the important exception of community colleges, public colleges and universities have substantially increased their per-student spending. And, yes, those are inflation-adjusted dollars.

On average, America’s flagship public research universities could be charging students about $1,200 less in tuition per year with no increase in public subsidy if they managed to get by on what they spent per student back in 2000.


What’s the money gone to? It seems like a little of everything. Top administrators get paid more than they used to, and there are more of them. Schools have invested a lot in information technology, but that’s generally been layered on top of other pieces of infrastructure rather than replacing anything. Schools compete to attract the applicants with the highest SAT/ACT scores so they try to make nicer buildings. One can debate how valuable these investments have been, and different institutions differ, but this is the story. In the face of budget cuts, prestigious public colleges and universities have started spending more money in pursuit of fairly hazy goals. And that’s what makes a lot of us skeptical about the case for further subsidies.

A couple of weeks back, Freddie de Boer offered an intriguing alternative idea for tuition-free publicly financed bare-bones educational institutions that would aim to be cheap on both the price and spending sides. That’s a fascinating discussion, but we should be clear that it’s a different discussion from the one about throwing extra dollars at institutions that seem determined to charge market clearing prices regardless of subsidy level.