Higher Education Finance News

Do You Know the Precise Costs and Revenues Associated with Programs and Courses Slated to be Cut?

A recent article in the Chronicle of Higher Education summarizes the peril of public colleges in the face of state cuts:

Some college leaders say … the new fiscal reality [will lead] institutions to narrow their missions, limit course offerings, and require students to pay increasingly greater shares of the cost of their education. But other college experts worry that, without more-fundamental changes in how institutions operate, the budget trends that have been accelerated by the economic downturn of the past two years will lead public higher education down a path to mediocrity.

In response to this crisis, leaders are pursuing several options, including, “revamping the credit hour” and “improving academic productivity” by focusing on eliminating the “smorgasbord of courses” so prevalent at many institutions, according to the article.

But increased productivity will not necessarily accompany a reduction in offerings, especially when the exact costs and revenues of courses and programs are not known to the institution. And while institutions consider differential tuition as another solution to cover the higher costs of some programs, we must ask: how many colleges know the real cost of each program of study. rather than simply the costs associated with a given department? For example, the Accord reports go beyond knowing what the budget is for, say, a nursing department (which only contains costs for the nursing faculty and nursing courses). Accord reports help decision makers determine the total costs of all the courses that a student enrolled in the nursing program took that year. Since several cost intensive courses that nurses take may come under the science department, that is a key component of determining the appropriate tuition amount to charge under differential tuition, not to mention essential information required to inform decisions about which courses to cut from the college’s offerings.