Smart Leadership for Higher Education in Difficult Times

Smart Leadership for Higher Education in Difficult Times

Edited by David W. Breneman and Paul J. Yakoboski

As the US economy emerges from the severest recession in a generation, large questions regarding its long-term ramifications for higher education remain unanswered. In fact, the harshest effects of the economic downturn are likely ahead as campus leadership focuses on enrollment, affordability and fundraising. This volume of essays examines the challenges and opportunities for advancing higher education’s core missions of education, research and service in a resource-constrained environment.

Chapter 12: Where is the Money? Leading in a Changing Environment

Jane Wellman

Subjects: business and management, management and universities, economics and finance, economics of education, public sector economics, education, economics of education, management and universities

Extract

Jane Wellman FINDINGS FROM THE DELTA PROJECT “Where is the money?” The answer to this question is, for the most part, that the money which higher education is going to receive is the money that it already has. Higher education is an economically stratified industry with a relatively small cluster of institutions having access to significant resources that (both by levels and types) do not exist in other parts of higher education. Therefore, all generalizations about finance and higher education, except for this one, are wrong. What is true for one sector and one type of institution, is not true for much of the rest of higher education. That said, the funding pattern for higher education in the 1990s was toward privatization. This translates, for the most part, into increases in tuition as a source of general revenues for colleges and universities. This has happened in all sectors of higher education, public as well as private non-profit institutions, with the possible exception of some of the leading private research universities and the nationally selective baccalaureate institutions. The biggest change in revenues is evident in the public sector, where since the late 1980s the pattern has been a slow erosion of state funds with a replacement by tuition revenues. The majority of students enrolled in private colleges and universities are in institutions for which tuition revenue constitutes somewhere around 80 percent to 90 percent of net revenue. These are not institutions that have historically had access to substantial amounts of private...

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