Terminology: A short discussion of tuition and fees.

Students often have a great deal of difficulty understanding where their tuition dollar goes for good reason: the system of higher education accounting in place in the United States as of 2012 using a number of tricks to make cost / benefit analysis difficult for students at best, and impossibly opaque at worse. To make the issues involved in higher education funding clearer, this article will attempt to simplify them, describing the flow of money as it should logically happen in an efficient system of higher education, then discuss how the current systems block the logical flow of money through the university.

Money comes into higher education from three primary sources. The first is tuition, defined as a mandatory fee paid by a student to reimburse the university for the expense of providing classes. The second is fees, or optional charges that a student pays for services above and beyond tuition, but which the student may refuse to pay without jeopardizing their education. The third is grants, or monies which an outside source provides directly to a university to support some aspect of its mission, be in government funding to aid instate students in their studies, or money provided by some organization to support teaching, research, and service.

The first difficulty a student of higher education will find is that these simple definitions are distorted by a billing system every bit as complex as the billing form for a cell phone carrier or an airline ticket. Because colleges and universities are judged on how low their tuition is, there is an attempt to make this number seem as low as possible. For that reason, mandatory charges are divided out by most institutions to provide money for politically powerful (athletics), academically essential (technology), generally beneficial (health and counseling) and spiritually desirable (student life) programs. Most of these fees cannot be avoided by a student, and thus are actually tuition paid into pots of money that usually are earmarked for a particular use, although some of these fees feed right into the universities general fund or are taxed to pay for administration.

The primary proof of that these funds should be considered tuition rather than fees is an experience by a disabled Central Washington Student who tried to have some athletic and recreation fees waived because they were not usefully handicapped accessible to him. After several months of trying to navigate the system, he discovered that even “optional” fees were essentially mandatory because the system was designed to force near 100% compliance. True fees (such as parking and food plans for off campus students, completely optional) are distinct from fees that are forced on students for non-educational uses.

Fees have a generally distorting effect on the education process by creating permanent streams of revenue to optional programs that could otherwise be restricted during times of budget crisis. For example, the two main jobs of a dynamic university is teaching, and research. During budget cuts money for generation of classes, classroom support, research, grants, and tuition breaks is reduced to make up for deficits because each is funded from the central account. When something cuts this account (in recent year this has been dropping federal, state, local, and religious support for education) then the main result is loss of money from budgets that feed from this, primarily from academic and direct academic support units, especially the ranks of adjuncts whose vulnerable employment contracts make them easy to dispose of. Programs that may be considered ancillary to the main education missions, such as student activities, athletics, and the like though retain their budgets without change - they are fed from permanent and unchanging revenue sources. Each budget cut results in the cost of university overhead increasing compared to the cost of delivering the primary product that the university was created to produce.

Another distorting factor is that not all fees are fixed, many are percentages of the main tuition bill. During cuts in government or church support of colleges and universities, the main tool the university has to recoup the loss of income is a tuition increase. Tuition increases are never taken lightly, and are usually attached to budget cuts in the educational and educational support departments. Thus tuition increases actually provide more money for secondary programs, while budget cuts are reducing the support to the education mission.

A final factor that has distorted the picture of education costs is in the make up of “presidential cabinets.” Before 1950 a president of higher education institutions relied on the deans and department chairs of the academic units in their organizations, along with senior faculty and a few leaders such as the provost of the university to aid in guiding the college or university. At the time deans and department chairs represented the often elected pinnacles of academic disciplines whose duties where to speak for the faculty of the discipline. After 1950s most universities adopted president’s councils that had seats for the heads of student life, academic support, athletics, business, bursar, public relations, technology, and grounds keeping, but only one seat at the table for a representative of academics, the provost. In any organization where the primary mission supervisor is only one of eight to ten people at a table, then academics and research will fall a distant second to the other concerns of the university. Even students did not have a clear place at the table except through student life, whose concerns are mostly with housing and not with education.

The budget cuts of the last decade have also demonstrated a significant weakness in most institutions, and that is departmental level distributed budgets. For many things, departmental budgets provide a great deal of flexibility, but it does make it nearly impossible to accurately determine the efficiency of any unit in the university. Take the average academic unit. In theory there is an easy measurement of academic productivity - how many students sit in the seats of how many professors and what is the outcome of their efforts for each dollar spent. The more students trained and the more successfully they are trained, the more efficient the unit is.

These measures of productivity can be found, but they are difficult to actually verify because the budget system is not designed to break out numbers in an easy manner. Students studying a video production unit for the Thin Tweed Line discovered that the unit with two members produced 70 minutes of finished, single camera video in the last year at a cost that, as best could be figured (due to the obscured book keeping) of around $3,000 per finished minute. A local production company at the time was charging around $1,000 per finished minute for corporate type video, making the video production unit about 1/3 as efficient as the cost of farming out the service. While internal video units never have the efficiency of freelance units, they rarely have efficiencies as low as this, but there was no way for administration to attempt to improve on this efficiency because the accounting system was so complex that the production unit, its supervising department, the accounting department, and even an auditor was unsure of how much money it spent, how much it brought in, or even what some old departmental budget lines where supposed to be used for.

The result of this budget ambiguity - student researchers for the Thin Tweed Line found during a research exercise few university departments knew how much money they had in their budget, how much they could spend, how much they started with, what budget lines were assigned to what personnel, and had little control of how the money was delegated to them, and little understanding of the theory their immediate supervisors followed in dividing up budgets between individual units. Many departments - especially those not in academic units but reporting directly up the chain of command, simply spent what they felt they needed to spend, and stopped spending only when the negative numbers in their account accumulated high enough that administrators would start to notice. Some units, especially academic units whose budgets are usually limited, would plan for expenses like lab support and student workers, then find their budgets were “clawed back” halfway through the lab by desperate deans who were asked to find money by a provost who needed to cover overages accumulated in the extremities of the institutions.

The budget ambiguity is not considered bad by many administrators. Student researchers working on a Thin Tweed Line project found that even academic units varied a great deal in the cost of educating a given number of students. Science programs tended to be significantly more expensive than computer science and communication programs, while education, social science, and the humanities where relatively inexpensive programs. Despite this extreme difference in the cost of offering programs budget cuts would often ignore the cost of educating a single student, instead weighing the number of faculty needed to teach an individual student. A single sociology professor is far more efficient, in terms of number of students taught per dollar spent, than a single communication professor (because of technology costs) or English professor (writing courses are limited in student / faculty ratio). At the same time science programs are even less efficient, sometimes by two times or more once associated expenses were tracked down and added in. While these trends where apparent even to students working in a classroom research class, they were very hard to document. Few institutions kept data on efficiency, when they did it was data they preferred not to distribute to students making state sunshine law requests, and when the data was available it was rarely easy to collate, having to be teased from thousands of tables in documents held by dozens of departments who often did not themselves know what the financial documents they held meant.

Academic Efficiency - How much does it cost to educate a single student.

Academic Mission - The three main missions of a university: teaching, research, and service.

Administrative Overhead - How much money is spend on administration and support for each student in an institution.

Fees - Optional charges made of students for services provided by the university. Fees that are not optional should be considered tuition.

Grants - Money paid by a third party to support an institition of higher learning.

Research - Performing studies, either for personal growth (to maintain skills needed to teach a subject) or for greater understanding of a subject by society.

Service - Using the skills and talents of a faculty member to aid the community, both in terms of the academic community of the college or university, and the community the institution exists in.

Shared Cost - The cost per student of a service provided by the university.

Teaching - Providing skills and knowledge to students.

Tuition - Mandatory charge for providing students with an education.

Using your state's sunshine laws, try to develop an efficiency number for an academic number.

Determine the shared cost of a campus service.

The Thin Tweed Line, ©2012 by Steve N. Jackson