Spending per student has risen in most major spending categories at both public and private US colleges and universities, says Federal Reserve Bank of Cleveland senior research economist Peter Hinrichs

However, Hinrichs says spending has risen more dramatically in some categories than others.

“Research is one category that has witnessed among the highest spending growth, and in percentage terms, there has also been a large increase in spending on student services,” says Hinrichs, who looks at trends in inflation-adjusted, per-student spending at four-year institutions between 1987 and 2013.

Examining spending by type of institution, Hinrichs finds that growth in most spending categories is higher in private colleges and universities than in public institutions. However, he notes that public institutions have spent more than private institutions on public service in recent years, a spending category where private institutions saw a slight decline.

The only major spending category where public colleges and universities saw a decline in spending per student from 1987 to 2013 was in operations and plant maintenance.

Hinrichs says the data suggest that the explanation for increasing college costs must be a broad-based one that can explain spending increases in a variety of categories.

Read Trends in Expenditures by US Colleges and Universities, 1987-2013

Hinrichs also recently studied the employment mix in higher education. He found that the proportion of college faculty who are full-time employees has declined over time and that, contrary to popular belief, there has not been a large change in the share of employees who hold administrative positions. Read Trends in Employment at US Colleges and Universities, 1987-2013.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892