Cost per Degree: Measuring Inputs and Outputs at Maine’s Public and Private Colleges

Read the full report | Dramatic increases in the cost of college have concerned policymakers and the college-going public for years. Citing data indicating that “college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent,” a recent article in the New York Times opined that “the rising cost of college threatens to put higher education out of reach for most Americans.”

Facing substantial state budget shortfalls, college costs will also be on the minds of Maine lawmakers. Balancing the state budget will likely require cuts to state funding for higher education, which currently subsidizes about one-third of the operating costs for Maine’s universities and community colleges.

This presents lawmakers with the opportunity to do the kind of cost/benefit analysis more commonly found in the private sector. For the amount taxpayers are spending on higher education, how many college graduates are being produced? Can larger universities produce degreed graduates more efficiently than smaller ones? Can Associate degrees, for instance, be produced less expensively at large universities or small community colleges? Can private colleges turn out degreed graduates more cost effectively than public colleges?

To answer these questions, The Maine Heritage Policy Center developed the following “cost-per-degree” analysis. By taking overall spending and dividing it by the number of degrees granted, adjusted to account for type of degree, we were able to estimate the cost to produce a degreed graduate at each of Maine’s public and private universities and colleges. By analyzing two separate years of data, we were able to track changes in per-degree costs over time.

Our findings suggest a number of areas for further research and indicate that additional analyses of this type may be of great use to Maine policymakers as they work to effectively manage the state’s investment in higher education.

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