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The University of Oregon and Oregon State University are spending a lot more than they used to, about $60,000, to produce a college graduate, a new study shows.
Portland State University, by contrast, remains one of the most efficient public research universities in the nation, spending just $40,700 on education and related expenses for every graduate it produces, the report says.
The study, "Trends in College Spending: 2001-2011" by the American Institutes of Research, suggests that two of Oregon's three biggest universities are headed in the wrong direction at a time when the state is amping up pressure on universities to generate more graduates per dollar. In 2006, Oregon universities were some of the best in the nation at producing graduates economically, but as of 2011, OSU looks pretty average and UO a bit sub-par.
But Ben Cannon, executive director of the Oregon Higher Education Coordinating Commission, said UO and OSU haven’t actually grown less efficient. Instead, he said, their poor showing in the report stems from a time lag between a period when their enrollments shot up, in 2008, 2009 and 2010, and when those additional students began graduating, in 2012. The study focused on the 2010-11 academic year, so it captured the higher costs of educating more students at UO and OSU but not the higher number of graduates that can be seen it both schools’ 2012and 2013 results.
Portland State also saw its enrollment rise during the same period, but two factors kept its per-graduate costs down, Cannon said. It did more cost-cutting, largely out of necessity because it doesn't draw as many higher-paying out-of-state students. And it draws a lot of transfer students who have racked up two years at a community college, meaning those students need just two or three at PSUto earn a four-year degree.
The state's public universities spend far less per student than most private universities, in part because their large size gives them economies of scale. Reed College, which graduates only about 300 students a year, spends an average of $160,000 per graduate. An outsize share of Reed's spending, 47 percent, goes to administration and other operating costs, not instruction or student services, said the author of the cost study, Donna Desrochers.
It's important for universities to get as many students as possible to graduate in a timely fashion, both to help students and to help the state's economy, Cannon said. The state wants to use its financial leverage to spur universities to raise their on-time graduation rates, even though students and their families cover the vast majority of the costs at UO, OSU and PSU – 90 percent, on average, at UO – not Oregon taxpayers.
Cannon's commission is pushing for the state to rework its funding formula for universities and community colleges, beginning in fall 2015, to deliver some dollars based on whether students to earn degrees and certificates. Currently, nearly all state funding is based on how many students enroll, regardless of whether they graduate.
Graduating on time is good for students and the economy, Cannon said. It shifts students from incurring costs to earning a college graduate's salary as quickly as possible. And the economy benefits from having workers with degrees and industry credentials instead of people who got part of the way and then quit.
Oregon's universities and community colleges also need to graduate more students if the state is to meet its 40-40-20 goal of getting 40 percent of Oregonian's to earn four-year degrees, another 40 percent to earn other post-secondary credentials such as an associates degree or industry certification and 20 percent to graduate from high school.