The Biblical command “You shall know the truth and it shall set you free,” is inscribed atop the University of Texas at Austin tower.
UT-Austin has begun its predictable push for more funding from the Legislature, arguing that insufficient state funds, not tuition deregulation, is the problem. But university leaders must confront another truth: higher education is becoming inaccessible and unaffordable due to their exploding operating costs, not fluctuations in state appropriations or tuition deregulation.
In recent pleas for more state funding, UT-Austin President Bill Powers correctly notes that the costs paid by UT-Austin students increased by 13.5 percent per year from 1990 to 2003, when tuition deregulation was implemented, but “only” 10.6 percent per year since. Thus, excessive higher education inflation did not begin with tuition deregulation.
But in the words of Socrates, “An unexamined life is not worth living.” Similarly, an unexamined budget is not worth funding. Yet higher education leaders continue to expect lawmakers to commit more taxpayer dollars while their operating costs spiral and student instruction takes a back seat to research and administrative costs.
What the university neglected to mention:
– The total cost per full-time equivalent student at UT-Austin in real (inflation-adjusted) dollars increased from $21,251 in 1980 to $36,769 in 2008.
– UT-Austin state appropriations in real dollars have increased from $7,225 in 1999 to $7,627 per full-time student equivalent in 2008.
– UT-Austin expenditures on administration have increased 52 percent in real dollars from 1999 to 2008, more than five times the rate of increase on instructional expenditures.
Furthermore, when you adjust for cost-of-living and enrollment mix – graduate students are more costly to educate – Texas exceeds the national average in higher education appropriations. With these adjustments, Texas higher education appropriations in 2006 were $7,125 per student, compared to a national average of $6,325, according to the State Higher Education Executive Officers.
Texas also exceeds the national average in higher education expenditures as a share of personal incomes. Overall, the U.S. spends more on higher education than any other country.
The critical question is not the total amount spent on higher education, but what that money buys. If it is simply delivering the same product to the same number of students at a persistently skyrocketing cost, where are the taxpayer and student benefits?
The Higher Education Coordinating Board has set a goal of enrolling another 650,000 students in Texas universities by 2015, and has identified tuition increases as a key obstacle. However, given other state budgetary priorities, the only way to close this enrollment gap is for universities to control tuition by reining in their own costs.
UT-Austin and other universities can accomplish this by separating their research and teaching budgets. Currently, all faculty salaries are reported as instructional expenditures, even for the 20 percent of faculty that do not teach a single course. Making this change would enable universities to identify and reward productive faculty – those faculty who teach many students and have high student satisfaction ratings, and those who bring in enough research grants to cover their salaries. The added transparency and accountability will also steer research funding to the most productive programs.
Tenure-track professors at Texas research universities teach only 1.9 courses per semester, short of the goal of three courses. If they don’t pull their weight with funded research during the rest of their time, they are contributing to the runaway costs that lead to higher tuition and calls for more taxpayer funds.
Secondly, Texas can motivate universities to minimize costs and maximize instructional quality by putting state appropriations in the hands of students in the form of a scholarship which follows the student to the public, non-profit, or for-profit institution that best meets their educational needs. We trust that food stamp recipients will use their Lone Star Card at the grocery store where they get the most for their money. Surely, college students can be trusted with the same responsibility.
The truth is that creating the right incentives for faculty and students can help UT-Austin and other Texas higher education institutions to truly become more productive, not just more expensive.
Andrew Abbott is a higher education policy analyst at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.