The Delta Project on Postsecondary Education Costs, Productivity, and Accountability [3MB PDF Report]

Our country’s system of higher education — long extolled as the best in the world — is showing serious fault lines that threaten capacity to meet future needs for an educated citizenry. There are many causes for concern, but chief among them is a system of finance that will be hard to sustain in the current economic environment.
To be sure, higher education has gone through hard times before. But looking at the economic and political horizon in January of 2009, only the rosiest of optimists can believe that what lies ahead is going to be similar to what we have seen before. The shock waves from the international upheaval in credit markets are just now beginning to be felt — in greater demand for student aid, tightening loan availability, dips in endowment assets and earnings, rising costs of debt payments, and deep state budget cuts. Families are going to find it harder to find the resources to pay for the almost-automatic increases in student tuitions that have been the fuel for higher education in the past decade. Even with increases in tuition, most institutions will still face deficits that require deep spending cuts.

Individual state data (Wisconsin).
Jack Stripling:

Most college students are carrying a greater share of the cost of their education, even as institutions spend less on teaching them, according to a report released today.
The report, published by the Delta Project on Postsecondary Education Costs, Productivity, and Accountability, gives a potentially troubling picture of spending and revenue trends in higher education. Spanning from 2002 to 2006, the report indicates that tuition hikes have resulted in little if any new spending on classroom instruction at public research universities.
“The public’s got it exactly right,” said Jane Wellman, head of the Delta Project. “They are jacking up tuition, and they’re not re-investing it in quality.”
There’s plenty of blame to go around, however, for this predicament. With state support waning for public colleges, rising tuition dollars are merely being used to make up for lost revenue — not for hiring more faculty or taking other steps that would arguably improve classroom instruction, the report asserts. On the other hand, the Delta Project suggests that colleges haven’t made the hard choices required for adapting to lower subsidies, as evidenced by relatively small changes in spending levels.