Why Higher Education Institutions Are Changing

The high cost associated with higher education continues to increase over time. Factors such as changes in the labor force to an increase in demand for technology continues to impact finances in higher education. Leaders in higher education face multiple challenges associated with trends that affect resources such as how instruction is delivered, growth in a number of nontraditional and digital students and the changes in support services for the new landscape of universities due to appropriation. While alternative pathways have decreased tuition cost, there is still significant pressure for higher education management teams to reevaluate financial budgets in order to have long-term sustainability. Therefore, it is important for leaders in higher education to provide the basis of a budget that will produce strategic growth in the institution finances. In this report, I will analysis the Integrated Post-Secondary Education Data System (IPEDs) to overview Eastern Washington University’s higher education budget to see the most significant trends that impact the institution growth.

Analyzing the SHEO state appropriation, Washington State (WA) appropriation has gone down by 12.7 percent in 2017. However, tuition has gone up by 54.5 percent (State Higher Education Executive Officers Association, 2017). Analyzing WA State higher education in comparison to the rest of the country, WA State is 82 percent higher than the national average. The implications of this data suggest that we are taking money from students who are in need. For instance, student enrollment increased 2.5 percent for Eastern Washington University (EWU) between 2013 and 2015, resulting in an increase in tuition prices by 5 percent (IPEDS, 2018). This tuition increase has negatively affected the ability of low-income students to attend college. As shown in Figure 1, as tuition increases, funding for college admissions has decreased.

According, to the book Financing American Higher Education in the Era of Globalization, “the long-term growth in the price charged to students, even when student aid is accounted for, is making access into high education and success in completing a degree more difficult for the population groups the nation most needs to reach –in particular, Latinos, African-Americans, Native Americans, some Asian groups, low- and moderate-income students of all ethnic groups, and adult working students” (pg. 26).

Consequently, white students will capture a greater share of seats at EWU because of unequal flow of resources (Carnevale & Strohl, 2013). Furthermore, as tuition increases, there are unequal outcomes produced for low-income students of color (e.g., school performance, and graduation rates ) compared to their white counterparts (Carnevale & Strohl, 2013). The 2017 SHEO report reveals that the educational appropriation increased by 2.0 percent in 2013, 4.9 percent in 2014 and 5.0 percent in 2015. The challenge with the increase in the higher education state appropriation is that the cost per student has stayed the same while the continuous increase in tuition has impacted the ability to fund student needs (e.g., books and tech fees). If the tuition trend continues to increase as it has over the past 3 years, student support services, (e.g., TRiO, Tutoring/Learning/Computing Center, and Disabled Students Services & Programs), will decrease due to the lack of access to demographics that the particular student services are built for.

Another resource trend that impacts EWU institution is graduation rates. Failure to graduate is one of the most pressing issues facing universities (Creighton, 2007). As tuition prices continue to rise, the institution’s student demographic begins to reflect the demographics of students that are served by the previously mentioned services (Bound, Lovenheim, & Turner, 2010). As shown in Figure 2, as tuition increases, graduation rates have decreased. The reason for the decrease is caused by several factors, 1) lack of resources to support students’ needs 2) increase in loans.

The lack of student resources in educational institutions limits the opportunity to access certain courses, which results in a failure to fulfill graduation requirements (Creighton, 2007). Declines in student resources may influence a student’s decision to drop out or transfer to another institution. Moreover, increases in student loans affect the loanee’s chances of graduating because students are forced to work extra jobs in order to repay the loan, thus resulting in neglecting school work. EWU’s higher education leaders would gain a significant understanding of tradeoffs by analyzing the relationship between graduation rates and revenue-driven tuition increases.

Another trend that is affecting EWU institutional growth is instruction cost. As previously mentioned before, as the tuition continues to rise and student aid stays the same, increasing instruction cost will make it hard for students to cover their tuition. In addition, instruction cost and salaries will create more expenditures for colleges that are already affected by state appropriation.

In all, EWU Higher education trends can be very complex given the funding sources and the effects of state appropriation on resources. To adjust to the trends that are affecting EWU students, a budgeter must analyze the revenue and expenses of the university and establish a plan to increase the revenue per student. By increasing the revenue per student, services and programming can become constant thus providing more growth in enrollment. A 2 percent increase in enrollment and an increase in state appropriation will help decrease various expenditures to keep the school from going into debt.