So yesterday we noted how universities’ per-student income had increased 40%.  But we also noted that it’s a universally acknowledged truth that pretty much everyone in higher ed will swear up and down that things are worse than ever, always doing more with less, etc.  Is there a way to reconcile these competing notions without simply coming to the conclusion that profs and administrators are delusional/greedy?

Well, sort of.  Let’s start with Figure 1.

Figure 1 – Income per FTE Student and Student-Teacher Ratio

 

 

 

 

 

 

 

The blue line (left axis) just highlights you what I showed you yesterday – that per-student expenditures jumped from $23,000 to $33,000 over the period in question.  The red line (right axis) shows something different: the ratio of FTE students to FT professors.  This, weirdly enough, also increased over our period.  In fact, the ratio went up by 24%, from just below 18:1 to a shade over 22:1.

This is, pretty much, bananas; indeed, it’s a pretty stunning indictment of higher education as a whole.  Per FTE student income rose by 40%, and not only was that money not used to reduce student-teacher ratios, but the ratio actually deteriorated by 25%.  How is this possible?

Well, one reason is that the operating budget grew more slowly than other types of income.  Operating funds were up 82% over our period; research money, on the other hand, increased 178%.

Figure 2 – University Income by Fund, 1992-2010

 

 

 

 

 

 

 

But that’s not really a full answer – even if you pull out all those other income sources, operating budgets per student still rose by 20%.  So why are student-teacher ratios going up?

There are basically two reasons.  The first is that professors cost more than they used to.  Just looking at the period 2001-2009 – the period for which I happen to have data handy – average faculty salaries jumped by about 24% in real terms.  Now, that’s after a decade in which salaries stayed roughly even, or dropped a little, so the increase for 2001-09 period should be pretty close to the increase for 1992-2010.  In other words, the cost of a professor rose more or less proportionately with income per student.

Everything else being equal, that means that student:faculty ratios should have stayed roughly  the same, rather than having risen.  But here’s the second reason: everything else wasn’t equal.  Operating budgets increased twice as fast as academic salary mass, and, as a result, the percentage of operating budgets going to academic salaries fell from about 39% to 30%, mostly in the 1990s.

Figure 3 – Academic Salaries as a Percentage of Operating Budgets

 

 

 

 

 

 

 

So it was the combination of rising salaries and changing spending priorities that caused the rise in student ratios.  But this just begs the question: what were these new priorities?  Where did the money go? Stay tuned.