Education: where does the money really go?

"Paddington", a maths professor, writes to a local newspaper in Ohio:

Public higher education is under attack from all sides. Conservatives criticize the concept of spending money on it, and appear not to recognize that it is an investment in our future. Liberals decry the rising costs to the students. The reforms which are proposed all focus on ‘increasing efficiency’ by trying to cut the expense of teaching, apparently under the impression that this is the largest part of the budget.

How does this belief compare with the facts?

Locally, we have a recent news item which states that the full-time faculty at The University of Akron will be awarded a 2% raise pool, amounting to $1.3 million. This means that the salaries of full-time faculty total about $65 million per year, with perhaps another $15 million for fringe benefits, and $10 million for part-time faculty. That sounds like a lot, until one considers that the total University budget is $360 to $450 million.

In short, the people who do the teaching and research (which are the reasons for the existence of the institution) have direct costs which are at most 25% of the budget. Compare this to a typical local school district, where teaching salaries and benefits are at least 60% of the total.

It sounds quite efficient, doesn’t it?

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