Public research universities have cut costs in recent years by:
- Reprioritizing investment around areas of excellence
- Adopting shared services strategies that consolidate human resources, purchasing,
and other administrative functions to take advantage of economies of scale
- Engaging in strategic partnerships with other public research universities, research
and industry leaders, and local and state government
- Redesigning benefits programs to increase eligibility requirements, higher deductibles,
and extended vesting periods
- Discontinuing or realigning activities, programs, and practices that don’t align
with the most critical needs of the state and nation
- Reallocating resources to match changing enrollment patterns
- Conserving energy and cutting utility costs through the use of solar voltaic systems
- Restructuring administration to better match resources with academic needs
- Promoting entrepreneurial strategies for revenue generation
- Adopting Responsibility Centered Management (RCM) budgeting, in which academic schools
and colleges are responsible for managing their own direct revenue and expenses.
The education of graduate students is essential to the research mission and
to the production of future faculty members, and therefore to the health of the
entirety of higher education. As doctoral degree–granting institutions,
public research universities have less flexibility to absorb budget reductions than
do large comprehensive universities. Public research universities must maintain
high faculty levels because graduate training requires intense faculty-student interaction.
But public research universities have suffered massive budget cuts; state cuts have
reduced total funding for public research universities by 20 percent per enrolled
student over the past decade.38
Forty-six of the fifty states cut support for higher education from 2008 to 2013,
some by more than one-third.
The main driver of tuition increases has been the loss of state appropriations,
which have reduced per-student support by as much as 40 percent.39 Tuition increases
alone cannot make up the difference. It is a widely held public belief that the
state provides the majority of support for public universities. But with state appropriations
in many cases making up less than 20 percent of public research university budgets,
and in some cases even less than 10 percent,40 this is clearly a myth; new funding models
are needed to increase resources.
Many public research universities have lowered administrative and operational
expenses by finding new efficiencies. For example, between 2006 and
2009, the Arizona Board of Regents gained a cost savings of 38 percent for the state’s
public universities by redesigning its course offerings.41 Collaborations and shared services also
reduce costs: the Library Service Center, a joint venture between the Georgia Institute
of Technology and Emory University, will house materials available to students,
faculty, and staff at both universities.42
These findings are supported by the U.S. News & World Report’s rankings
of the most efficient colleges and universities, which are dominated by public research
38 National Science
Board, Diminishing Funding and Rising Expectations, 10.
39 Center on Budget
and Policy Priorities, States are Still Funding Higher Education
below Pre-Recession Levels (Washington, D.C.: Center on Budget and Policy
Priorities, 2014), http://www.cbpp.org/sites/default/files/atoms/files/5-1-14sfp.pdf.
40 University of Virginia
Office of Public Affairs, “Financing the University 101: The University of Virginia,”
41 The National Center
for Academic Transformation, “Arizona Board of Regents: Learner-Centered Education
Course Redesign Initiative,” http://www.thencat.org/States/AZ/ABOR_Savings.htm.
42 “Emory, Georgia
Tech to Open Joint Library Service Center,” Emory News Center, November 19, 2014,
43 Robert Morse and
Diane Tolis, “Data Show Which Top-Ranked Colleges Operate Most Efficiently,” U.S.
News & World Report, January 15, 2015, http://www.usnews.com/education/blogs/college-rankings-blog/2015/01/15/data-show-which-top-ranked-colleges-operate-most-efficiently.