PPIC: Costs Per Degree Fall Significantly at CSU, UC

SAN FRANCISCO, March 16, 2017—The costs of producing a college degree have declined significantly at California’s four-year public higher education systems, the University of California (UC) and California State University (CSU). Institutional costs per degree across UC and CSU fell 17 percent from 1987 to 2013, the year of the most recent data. These are the key findings of a report released by the Public Policy Institute of California (PPIC). Specifically, the report found:

  • At UC, the cost per degree fell by 6 percent, from $116,000 to $109,000. UC’s institutional costs at the end of this period were lower than a comparison group that included both public and private institutions across the nation. This is mainly due to increasing costs in the comparison group, driven primarily by Harvard, Yale, MIT, and Stanford. In a national comparison group of public schools only, UC’s costs were higher. UC’s average cost per degree has been consistently higher than similar public institutions nationally, a reflection in part of attempts to keep public salaries in line with the higher cost of living in an expensive state.
  • At CSU, the cost per degree fell more dramatically—33 percent—from $67,000 to $45,000. The cost per degree was lower at CSU in 2013 than both types of comparison groups, one that included public schools only and one that included both public and private institutions. CSU’s reduction in institutional costs is related to improved graduation rates. Since 2000, the system has doubled its 4-year graduation rate and improved its 6-year graduation rate by almost 20 percentage points. Furthermore, these improvements occurred during a period of significant cuts in funding by the state.

The report proposes the measure—institutional cost per degree—to connect resources and results in a way that is consistent, comparable, and broadly accessible. It is designed to capture costs directly associated with instruction as well as the indirect expenses associated with moving a student toward completion, including administration, advising and tutoring, and operations and maintenance. The calculation of the measure is straightforward: the cost per degree is a result of dividing the total cost of education by the total number of degrees produced, including bachelor’s, master’s, professional, and PhD.

“Cost per degree provides a consistent, reliable, and objective measure of institutional costs and performance—one that allows comparisons with colleges and universities in other states,” said Kevin Cook, research associate at the PPIC Higher Education Center and coauthor of the report. “We see this measure as a starting point for discussions about how our higher education systems can demonstrate whether they are making progress toward their goals in a cost-effective manner.”

PPIC’s measure is based on data from the Delta Cost Project, created by the American Institutes for Research, whose data in turn comes from the US Department of Education’s Integrated Postsecondary Education Data System.

PPIC is releasing its report at a time when the need for more higher education resources is a focus of debate. California has recently increased its investment in higher education after many years of reducing state support. At the same time, the state’s four-year public systems are poised to raise tuition for the first time in several years.

PPIC offers the new measure as a basis for discussions about how to allocate higher education resources. For it to be most effective, policymakers and leaders in the state’s higher education systems should define their policy goals, system offices could then translate these goals into action, and individual institutions could, in turn, focus their data and accounting systems to better understand the tradeoffs in meeting the goals. The authors also recommend a state-level higher education authority to track progress toward higher education goals and provide a greater degree of transparency, consistency, and impartiality to the process.

The report, Measuring Institutional Costs at California’s Public Universities, is coauthored by Cook; Talib Jabbar, former PPIC research associate and a PhD candidate at the University of California, Santa Cruz; and Patrick Murphy, PPIC research director and senior policy fellow at PPIC, where he holds the Thomas C. Sutton Chair in Policy Research. The report is supported with funding from the Sutton Family Fund.

Publication:
Measuring Institutional Costs at California’s Public Universities

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