Financial Forces and the Future of American Higher Education

Recent shifts in state funding are altering the most basic realities of American higher education, from student access to faculty research

Resident and Nonresident Tuition and Enrollment at Flagship State Universities

[Excerpt] How tuition levels, or the availability of grant or loan aid, influence access are empirical questions that we will not address in this chapter. Rather, we will analyze how tuition and enrollment strategies at institutions react to changes in federal and state need-based student aid and to state appropriations to public higher education institutions. The former increases student mobility by expanding their choice set, while the latter does not travel with the student

Resident and Nonresident Tuition and Enrollment at Flagship State Universities

We address the determinants of resident and nonresident tuition and enrollment at public universities. A key explanatory variable is the share of out-of-state students enrolled under reciprocity agreements. We find that public universities use out-of-state enrollments primarily to augment student quality, not to make up for losses in state appropriations.In the main out-of-state enrollment levels are relatively insensitive to out-of-state tuition levels charged by institutions. Finally, we find no evidence that public universities increase their in-state or out-of-state tuition levels in response to increased federal or state financial aid for students.

Start-Up Costs in American Research Universities

Our report briefly summarizes findings from the 2002 Cornell Higher Education Research Institute survey of start-up costs at the over 220 universities classified as Research and Doctoral universities by the Carnegie Foundation in 1994. It reports the mean start-up cost packages across institutions for new assistant professors and senior faculty, broken down by institutional type (public/private), Carnegie classification and field (biology, chemistry, engineering, physics and astronomy) and also discuses the sources of funding for start-up costs

Who Bears the Growing Cost of Science at Universities?

Scientific research has come to dominate many American university campuses. The growing importance of science is due to exciting breakthroughs in biology, information technology and advanced materials that have promise of tremendously improving human welfare. Along with the growing importance of science has come a growing flow of external funds to universities to support research. What is not well known, however, is that increasingly the costs of research are being funded at universities are coming out of internal university funds. Over the last three decades of the 20th century the percentage of university research that is funded out of internal funds rose from about 11 to 20 and internal research expenditures per faculty member almost quadrupled in real terms. Our paper sketches the reasons for the tremendous increase in university expenditure on research out of internal funds including changes in federal indirect cost reimbursement policies and the growing cost of start-up funds for new faculty. We present evidence, based upon a survey of department chairs, deans and vice presidents for research at over 200 public and private universities, on the magnitude of start up packages received by researchers in science and engineering disciplines. We then use panel data for 21 years and over 200 universities to estimate the impact of growing internal expenditures on research on student/faculty ratios, the substitution of lecturers for tenure track faculty, on average faculty salaries and on tuition levels at public and private universities. Among our most important findings is that universities whose research expenditures per faculty member out of internal funds has been growing the most rapidly in absolute terms, ceteris paribus, have the greatest increase in student/faculty ratios. So while undergraduate students may benefit from being in close proximity to great researchers, they also bear part of the costs in the form of larger class sizes and fewer full-time faculty members

Who Bears the Growing Cost of Science at Universities?

Scientific research has come to dominate many American universities. Even with growing external support, increasingly the costs of scientific research are being funded out of internal university funds. Our paper explains why this is occuring, presents estimates of the magnitudes of start-up cost packages being provided to scientists and engineers and then uses panel data to estimate the impact of the growing cost of science on student/faculty ratios, faculty salaries and undergraduate tuition.We find that universities whose own expenditures on research are growing the most rapidly, ceteris paribus, have had the greatest increase in student faculty ratios and, in the private sector, higher tuition increases. Thus, undergraduate students bear part of the cost of increased institutional expenditures on research.

Faculty Retirement Policies after the End of Mandatory Retirement

[Excerpt] The findings we report above have implications for both institutions and their faculty members. In some states, rapidly growing college age cohorts will require academic institutions to hire large numbers of new faculty in the years ahead to fill positions created to meet the expanding demand for enrollments. Nationally, institutions will have to replace a large number of retiring faculty members in the years ahead. This suggests that most institutions’ concern in upcoming years will not be how to encourage their faculty members to retire. Rather, their concern will be how to continue to draw on the skills of faculty nearing retirement ages to provide stability to their institutions during a time of rapid change. In the years ahead, it is likely that more and more institutions will consider developing programs to permit phased retirements, or to encourage retired faculty to teach part-time, as a way of meeting their teaching needs. Similarly, faculty groups at institutions may well want to contrast the regular retirement programs, retirement incentive programs, and programs relating to emeritus faculty that their institutions offer with the programs that we indicate are being offered at other institutions and use this information in discussion with their administrations

Reversing the Balance Wheel Principle

The paper discusses funding principles and policies of higher education during the recession period. The role of state appropriations for the viability of public higher education institutions is emphasized. State funding affecting institutional behaviour is another issue raised. The paper analyzes the possibility of expanding state funding for higher education institutions instead of cutting during economic recession. The examples of Midwestern states is discussed for this purpose. Funding higher education institutions is perceived as an important component of the process of investing in human capital. Referring to scholarly findings, Leader-Laggard Model and Event History Analysis are suggested as optimal methods for evaluating the implementation of new policies as they spread from one state to another