Costs increased 2.5% for higher ed institutions in FY2019
The cost of operating U.S. colleges and universities rose again during the 2019 fiscal year, albeit at a lower rate than in recent years. “Higher ed inflation,” as measured by the Commonfund Institute’s Higher Education Price Index (HEPI), was 2.5% during FY2019, which ended in June. It was 2.9% and 3.4% in 2018 and 2017, respectively. The index takes into account eight weighted components. Faculty salaries, which account for 35% of the index, were up 2% in 2019. Clerical costs, which represent 18% of the index value, rose 3.5%. Fringe benefits, responsible for 13% of the index and administrative salaries (11%) were each up 2.4%. The largest increases occurred in lower-weighted categories, with supplies and materials expenses rising by 4.1% and service employee costs rising by 4%. In addition, “miscellaneous services” costs increased by 2.4% and utilities spending rose by 0.9%.
Source: Inside Higher Ed
Why college students leave before graduating — and what might lure them back
A recent survey of more than 40,000 stopped-out students (those who quit college before completing their degrees) sheds light on why they left school and reveals what might convince them to return. Their top reasons for quitting college were “difficulty balancing work and school obligations, financial pressures and life events.” However, many would consider reenrolling if they had access to “free or low-cost tuition, flexible schedules and guaranteed job placements.” According to the study’s authors, “Educational providers need to acknowledge that a high percentage of their students will be working and going to school — and provide the flexibility to make it possible for these students to do both.”
Source: Education Dive
“Adversity scores” could end up benefiting affluent students in lower-income areas
So-called adversity scores, such as those provided by the College Board’s “Environmental Context Dashboard,” are designed to help admissions officials see beyond applicants’ grades and test scores by providing insight into their “backgrounds and struggles.” However, while “colleges can use the Dashboard to give an admissions edge to applicants who scored well on the SAT despite attending high school under difficult conditions… these statistics will favor privileged children in poor districts while penalizing lower-income students attending higher income schools.” To illustrate that point, one writer — whose family had moved from relatively affluent Arlington, Virginia to less-affluent Klamath Falls, Oregon without a corresponding drop in household income — used data compiled by the Wall Street Journal to compare how his son’s SAT score might differ after the move. “Were my family still living in Arlington, VA, the Journal’s analysis indicates that the Collage Board’s adversity index would add about 11 points to my son’s SAT score. But were my son to receive that same 1340 SAT score in Klamath Falls, Oregon, the Journal finds that the College Board’s adversity index would effectively add 120 points to his score, into striking distance of the truly elite U.S colleges and universities.”
Source: Forbes
Moody’s upgrades the financial outlook for higher ed to “stable”
Thanks to the prospect of “steady revenue streams, solid reserves and strong operating performance at large comprehensive universities bolstering the sector over the next year to 18 months,” Moody’s Investors Services has upgraded the financial outlook for U.S. colleges and universities from “negative” to “stable.” However, Fitch Ratings kept its “negative” outlook unchanged due to “continued operating pressures as challenges persist from a moderate number of students graduating from high school, limited public funding levels and slowing tuition growth.” Moody’s outlook is based in part on expectations that “tuition revenue will increase by 1% for public institutions and by 2.3% for private colleges and universities in the 2020 fiscal year.” It also anticipates that state appropriations, gift revenue and research grants and contracts will increase by 3%.
Source: Inside Higher Ed