North Carolinians have long considered the state’s public universities to be an engine for economic growth. For most of us, a college education is the key to a better job and the means to a more fulfilling life. Such thinking in part helps to explain the ever-rising government appropriations for public higher education — even after adjusting for inflation and population growth. Last year, NC spent about $3.5 billion on the University of North Carolina and Community Colleges. In the past year, state spending for UNC increased 17 percent and community college spending increased by 13 percent.
Is North Carolina getting a fair return on this massive investment of public money? Not according to a new report on North Carolina’s Higher Education System by the Center for College Affordability and Productivity. Dr David Vedder, Center Director and co-author of the report, states North Carolina spends $7,153 per FTE higher education student, far above the national average of $4,871 and more than neighboring states Georgia, Virginia and South Carolina. Such high levels of public investment suggest that North Carolina’s population would be highly educated. However, the data say otherwise. Vedder writes:
In 2006 only one in four North Carolinian adults possessed college degrees, falling noticeably (slightly more than one standard deviation) below the national average of 27.2 percent. Furthermore, North Carolina’s attainment rates have lagged behind the national average every year dating back to 1989 and even back to 1960 for every year data are available. . . A relatively uneducated population despite such a massive investment in higher education suggests great inefficiencies and wasted resources in the system.
According to Vedder, state appropriations aren’t effective in maintaining a higher educational attainment among the state’s population. Vedder writes, “North Carolina spends $10.64 per capita on higher education for every 1 percent of its population possessing a bachelors’ degree, whereas neighboring states Virginia and Georgia spend only $6.64 and $6.61 respectively, to do the same thing.”
The problem? Waste, and there’s plenty of it— bloated faculty salaries, institutional subsidies, ballooning non-instructional costs, and rising numbers of students who attend school for several years, but never graduate.
While investment in higher education will continue to be an important issue, we’d do well to reevaluate subsidies for public higher education. A better option would be to closely link public subsidies to effective management and the realization of public benefits. Read the report and recommendations to learn more.