Colleges across the nation are spending far less on educating students than they claim, according to a report released April 7 by the Center for College Affordability and Productivity. The controversial report, which has received national media coverage in The Chronicle of Higher Education, cited Dartmouth's spending model as an example of the gap between the actual costs of providing an education and what an institution says it spends.
The report, "Who Subsidizes Whom?: An Analysis of Educational Costs and Revenues," determined that the traditional belief that colleges subsidize the cost of students' education is misleading because not all of that spending is used for educational purposes, Andrew Gillen, co-author of the report and research director at the Center, said in an interview with The Dartmouth.
While the cost of undergraduate tuition and room and board was $49,974 for the 2009-2010 academic year, the College reportedly spent $104,402 per student, reflecting a 52 percent discount in cost, according to the Dartmouth College Fund website. Gillen and his co-authors Matthew Denhart, the administrative director and a research associate at the Center, and fellow research associate Jonathan Robe identified several spending categories that comprise the total estimated cost of educating a Dartmouth student.
Robe declined to comment on the report, deferring all comments to Gillen. Denhart did not respond to requests for comment by press time.
Out of the total $104,402 estimated cost, the largest spending category is $37,000 per student for "academic support," the report said. The College also spends $24,000 per student annually on "research," $15,000 per student for "institutional support" and $12,000 per student on "student services" for a total of $88,000, according to the study.
Of the aforementioned budget components, "very little of that $88,000 is properly attributed to the cost of providing an education," Gillen said.
The report considered professors' salaries and both credit and non-credit academic activities to be spending "directly used for educational purposes," Gillen said.
Inflated costs that don't reflect student services-allocated funds are typical among higher education institutions, and Dartmouth's spending model "did not stand out from others in its peer group," Gillen said.
"If I was a student at Dartmouth, I would ask, Why are you raising tuition if we can cut support fields while still covering all the classroom and related expenses by one-tenth or even one-fifth of the current costs?'" he said.
College administrators and professors, however, disagreed with the study's findings, as the report inaccurately categorized large portions of the College's expenditures as unrelated to education, economics professor Bruce Sacerdote '90 said.
"I'm still trying to decide between the phrases pretty weak' and beneath criticism' to describe this report," Sacerdote said.
Assistant Dean of Faculty for Undergraduate Research Margaret Funnell said the study failed to look "beyond the surface of the data."
"As a result, they seemed to have put a negative spin on things without explaining where the numbers came from or what they meant," Funnell said.
Sacerdote cited libraries, dormitories, Internet service and dining halls as examples of the College's "high-quality infrastructure" that do not vary in cost with each extra student, but without which no student's education would be possible.
Sacerdote said students must pay a premium for the quality of the Dartmouth education.
"Dartmouth has always had lots of faculty per students and lots of faculty and student interaction, and we're doing more of that," he said. "We're making classes smaller, we're creating more research opportunities, and it costs."
The report also mistakenly refers to research as a revenue drain, when most research grants actually provide over 60 to 70 percent of the direct cost of research, according to Sacerdote. The extra money goes to institutional support or educational opportunities, he said.
Since most students receive some form of financial aid and alumni donations fund many student services, it is unfair to portray the burden of financing Dartmouth as falling entirely on students, Sacerdote said.
Approximately 57.5 percent of the overall student body received some sort of financial aid during 2008-2009, according to the College's website.
The researchers focused on Dartmouth after they discovered a Dartmouth College Fund video describing the College's spending model, according to Gillen. In the video, titled "You Wouldn't Run a Business This Way," the Dartmouth College Fund defends the model of spending more money on one student than individual tuition can cover by highlighting the value of a Dartmouth education.
"The video embodied the main source of confusion [about college spending] that we should be trying to get away from," Gillen said. "We weren't trying to pick on Dartmouth we wanted to purely give people context and an understanding of these numbers."
Over the past several years, the Center noticed a trend in which institutions implemented cost-cutting policies but continued to charge higher tuitions, Gillen said. This February, researchers decided to investigate the cause of that phenomenon.
The Center analyzed data from the U.S. Department of Education's Integrated Postsecondary Education Data System, a public database with spending data from all colleges and universities that receive federal aid, Gillen explained.
"Once we had the data from the Department of Education, we came up with measures that we felt were the best way to assess college revenue and spending," Gillen said.
The report organizes data under two categories estimates of per-student revenues and estimates of per-student educational costs. Under estimates of per-student revenues, the report identifies three income sources net tuition, total tuition and total payment. Estimates of per-student educational costs include education and related spending, adjusted education and related spending and achievable education and related spending.
After analyzing this data, the Center determined that approximately 52 to 60 percent of all students in the United States attend institutions that are paid more than they spend to educate those students, the report said. Most of the colleges that do not subsidize their students are able to spend their revenue on non-educational activities, according to the report
Universities have been raising their tuition rates while expanding the scope of their services "more than ever" before, Gillen said.
"If you did the same analysis 20 to 30 years ago, you would get a completely different conclusion, and that's why I think this report will be surprising to a lot of people," he said.
Justin Anderson, director of media relations at the College, said the report's lack of detail was "disappointing" and that he could not confirm that the figures in the report are consistent with the data that the College submitted.
Funnell defended the College's of spending on research.
"The way I look at it is that what you're hoping to get out of an education are the tools to be a life-long learner," Funnell said. "Research provides students with the transition from being given knowledge to creating knowledge."
The Office for Undergraduate Research and Advising funds approximately 500 students per year to complete independent research projects, according to Funnell. While some research funding is taken out of per-student spending figures, the College also allocates over $500,000 beyond this budget for research initiatives through grants from the Howard Hughes Medical Institute, the Neukom Scholars program and other sources, Funnell said.
"The access to research is a unique thing about Dartmouth," Funnell said. "Because of the size of our institution, students here have such great chances to work with some of the best minds in the country directly I would hate to have to cut those opportunities or accessibility down by, say, one-fifth."
Funnell also questioned the greater implications of the Center's study. The Center receives funding from DonorsTrust, a charity established to ensure that donors' funds are used for their intended purpose, according to Anderson. The non-profit organization focuses on donors who are dedicated to the ideals of limited government, personal responsibility and free enterprise, according to the organization's website.
