Researchers Find “Minimal Relationship” Between Higher Ed Spending And Quality Of Education


Something to keep in mind the next time you hear a politician, or a higher education bureaucrat, talking about what we get in return for all of our “investment” in higher education.

Everyone knows there’s a reason the most expensive colleges in the country — generally private residential institutions — charge so much. The money they spend on hiring the best faculty members (full-timers of course) and on keeping student-faculty ratios low results in a higher-quality education. Right?

The crowd gathered here for a standing-room-only session at the annual meeting of the Association of American Colleges and Universities certainly wanted to believe. From a show of hands at the start of the session, the vast majority of attendees were administrators at those institutions. And the researchers who presented new data on the economics of liberal arts education threw cold water all over that conventional wisdom.

Research presented here by researchers from Wabash College — and based on national data sets — finds that there may be a minimal relationship between what colleges spend on education and the quality of the education students receive. Further, the research suggests that colleges that spend a fraction of what others do, and operate with much higher student-faculty ratios and greater use of part-time faculty members, may be succeeding educationally as well as their better-financed (and more prestigious) counterparts.

In short, spending more on higher education doesn’t necessarily result in better education. Which we can see here in North Dakota. This is the relationship relationship between growth in higher ed spending and growth in enrollment at North Dakota’s 11 campuses:


Ask yourself, has all that additional spending resulted in better education outcomes? You’re looking at a 150% growth in spending since 2003-05. Are the degrees our students getting 150% more valuable? No. Are the degrees costing the students less? Quite the opposite, tuition and fees have gone up significantly. Are more students graduating? Again, no. North Dakota’s four-year universities only graduate a little more than 1/5th of students in four years, and less than half in six. Two-year institutions are only a little better, with three-year graduation rates for two-year programs hovering at about 35%.

So what is all this increase in spending really buying us? More university employees, bigger pay, generous perks and larger campuses.

Is that really the sort of return on “investment” we’re looking for when we spend on higher education?

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

Related posts

  • Yogibare

    The campuses around the country are becoming showplaces. They are “all hat and no cattle” as the Texans say. There is a lot of posturing in the education business.

  • WOOF

    The most expensive schools in the country allow you access to
    those who will soon be running the world.
    How can you put a price on doing Tequila shots with GW at Yale.
    Often times it’s who you know , not what.

  • mickey_moussaoui

    Any education past high school is a good thing. Only 25% of Americans adults have any extra education past high school. We can’t all claim to be the next Bill Gates or Steve Jobs. Education is all what you make of it. There is nothing wrong with being the best welder or neurosurgeon in your class. Just don’t grow up to be a useless, angry, unproductive stupid liberal.

  • Kevin Flanagan

    Big education is a scam, perpetuated by greedy educrats and their enablers in government.

    • Rudy


      I’m not sure if you are a real person or a software program designed to randomly churn out one of a number of worn-out phrases (“big education”, “educrats”, “tenured pointy heads”, “free lunch bunch”, “education cabal”, and, my favorite, “I pay more in state income taxes than federal income taxes”).

      In case you are a real person, I can only say that your comment here is insanely wrong. Thousands of people graduate each year with useful degrees, go on to have successful careers, and earn a significantly larger income than they would have otherwise been able to earn. Your extreme bitterness and cynicism suggest that this did not happen for you. Rather than blame yourself for your life not turning out the way you had hoped (personal responsibility?), you choose to endlessly bitch and complain about higher ed (and pretty much every other government function) and provide nothing of value to this or any other discussion.

      • Kevin Flanagan

        “Thousands” out of how many total students? Why are you so guilty?

        • Rudy

          No guilt here. Just one of those people who made smart decisions, chose a major that was demanding but highly valued, worked hard, delayed gratification, and used his education to start a rewarding and lucrative career. Apparently you’re the spokesperson for those other people. It is funny to see a so-called conservative turn into an entitled brat when it comes to this topic.

          • Kevin Flanagan

            You seem to be short on the ability to perceive.

          • Dave

            You seem like a whiny bitch.

          • Kevin Flanagan

            Good luck, “Dave.”

          • Rudy

            Heck, I have no idea what your real story is. I’m just trying to clue you in on how the world is perceiving you – a bitter loser angry at a world that has left you behind. I’m sure you see yourself differently – some kind of crusader for liberty and capitalism. But everyone else sees you as Michael Douglas’ character in “Falling Down”. Maybe you’re very successful, but I seriously doubt it.

  • Rudy

    If a student does not graduate in four years, there are numerous possible reasons why:
    1. Has to repeat one or more courses (not prepared, not mature enough, doesn’t study enough, parties too much, etc.).
    2. Doesn’t take the recommended number of credits because he or she wants a lighter load.
    3.Can’t take the recommended number of credits because he or she works part time or even full time. Distance education has become popular with older students who work full time, have children, etc. These students may only take 1 or 2 courses each semester.
    4. Changes major once or more.
    5. Takes a semester or more off to do an extended internship in industry.
    6. Spends a semester or two on academic suspension because of poor grades.

    Using a four-year graduation rate as a measure of how well a university is serving its students is misleading. Taken by itself it simply is not a very useful statistic. The demographics of the student body have changed significantly over the years. Should the universities make classes
    easier? Should they reduce the number of required courses? Should they force students to take 16 or more credits each semester? Should they force students to take out loans rather than work their way through college? Since you bring this up so often, what is your solution?

    • opinion8ed

      1. Has to repeat class because instructor was rarely in the class, could not explain at an average level, started off the semester by saying he/she has only given one A in 10 years.

      2. Takes 19 credits per semester but degree takes 148 credits and you could not get the necessary classes in at the right time and they were not offered at summer school.

      3.Needs to work to earn the extra money that it will require to cover the cost of the extra semester and reached your 31k max of federal borrowing.

      4. Forced to change major because you did not get selected to move forward in Exercise Science to Respiratory Therapy despite having a 3.89gpa and acing the Biology Exam. I suspect that Instructor did not think you we’re a bleeding heart ours rents mine as well as time on something that has nothing to do with your degree.

    • Rob

      I agree, the four year rates don’t tell the whole story.

      That’s why we talk about six year rates too.

  • Matthew Hawkins

    I think it depends on the discipline.

    Physics is expensive. You can’t teach it without the experiments.

    Business is another matter. University of Phoenix can actually teach it.

  • Lynn Bergman

    The Elite Education Oligarchy will always stick together like glue; no member of the elite education oligarchy has ever publicly admitted what anyone who examines the data knows about North Dakota education… we don”t get what we pay for; instead it goes to higher wages and benefits for more and more administrators. How stupid are we, North Dakotans?