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May-June 2010

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Student Service Expenditures Matter

The “Great Recession” has caused a fiscal crisis in both public and private higher education that is unmatched in recent memory. Institutions’ attention is focused on what they can cut out of their budgets. Recent research by the Delta Cost Project has shown that the amount of spending per student on instruction has grown more slowly than the amount of spending per student on student services over a roughly 20-year period

Student-service expenditures are often seen as discretionary in institutional budgets; they are viewed by some critics as “frills” that make no direct contribution to students’ persistence in and graduation from college. And students’ success has become increasingly important to policy makers and political leaders, including President Obama, so whatever expenditures contribute to student success should arguably have high priority in institutional budget decisions. To many critics of higher education and policy makers, therefore, growth in expenditures on student services is likely to be seen as a wasteful and inefficient use of scarce resources.

Ronald Ehrenberg is the Irving M. Ives Professor of Industrial and Labor Relations and Economics at Cornell University and director of the Cornell Higher Education Research Institute (CHERI). Douglas Webber is a doctoral student in economics at Cornell and a research assistant at CHERI. Their research has been supported by grants to CHERI from the Andrew W. Mellon Foundation, the Atlantic Philanthropies, the TIAA-CREF Institute, and the Lumina Foundation for Education. However, the views expressed here are solely their own.

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