It’s no secret that higher education is not just underfunded, but increasingly so. Administrators have a habit of saying personnel costs (especially faculty salaries) are undermining university finances. Yet, while personnel costs matter, we see that such expenses represent a smaller and smaller percentage of overall costs at institutions in the PASSHE system.
Based on IPEDS data, we see that at public 4-year institutions, only 27% of expenses are allocated towards instruction. It should be noted that instruction, is a separate category from research, as well as academic and student services. Also, the category of public 4-year institutions is quite broad. It includes research-intensive universities and regional comprehensives.
Below is IPEDS data on the 14 campuses in my system. In most cases, instruction (which includes faculty salaries) is a lower share of core expenses at our universities than it was several years ago. In fact, instruction in most cases has dropped to less than half of core expenses.
In most cases, the change in percentage is not due to increased support for student service. Rather, the category that has increased the most has been “other.” While this includes scholarships and tuition discounts, it can include other non-auxiliary expenses as well.
At this point, I’m sure there is an administrator that will point out that instructional expense-per-FTE has gone up. However, there is a lot of variation in the system, and increased expense in this area does not seem to be correlated with retrenchment or overall campus finances.
As I suggested in a previous post about student-to-faculty ratios, administrators prefer those metrics over Education and General (E&G) expenditure-per-Student FTE because they would have to admit what is going on – which is cutting funding to instruction.