Private colleges vastly outspent public peers

Bloomberg News / July 10, 2010

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WASHINGTON — Private research universities spent twice as much as their public counterparts to teach each student in the 2007-08 school year, widening a cost gap that can make private colleges unaffordable to students, without the help of financial aid.

Private institutions, on average, laid out $19,520 per student for instruction that year, a 22 percent increase from a decade earlier, according to the Delta Project on Postsecondary Education Costs, Productivity, and Accountability, a Washington-based nonprofit research group. Public universities spent $9,732 for each student, up 10 percent in the decade, according to the group’s report released yesterday.

The spending rate in 2008 “may turn out to be a high point in funding for higher education,’’ the Delta Project said. The recession forced colleges to cut budgets, beginning in the second half of 2008, as endowment income fell and states cut subsidies.

“I expect we’re going to see revenues are not going to continue to grow and institutions are going to be having to pay much more attention to permanent changes in how they spend their resources,’’ Jane Wellman, an author of the report and Delta Project’s executive director, said.

Higher education “has seen a permanent reduction of roughly 10 percent of its revenue base — more in some areas of the country, less in others — money that won’t be coming back, and can’t realistically be made up in tuition increases,’’ the authors wrote.

College tuitions have risen faster than inflation and family incomes, according to the report.

“The steadiest source of new revenue in all sectors was from tuition,’’ the authors wrote.

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