Variations in Postsecondary Institution Spending on Instruction and Student Services by Race/Ethnicity and Gender

My working analysis of institutional finance finds that, overall, U.S. postsecondary institutions spent $11,925 on instruction and student services in FY 2020 for every student enrolled in fall 2020. But different subgroups of students attended institutions with different levels of spending.

Black or African American students attended institutions that spent $9,768 per student, or about 18% less than average. Hispanic or Latino students attended institutions that spent $9,605, or 19% less than average. Nonresident alien students, on average, attended institutions with the highest level of spending of the groups analyzed, at $22,762 per student, or 91% above the overall total. Native Hawaiian or Other Pacific Islanders attended institutions with the lowest spending per student, at $9,014, or 24% less than average. Men attended institutions with about 4% above-average spending and women were at institutions about 3% below.

These numbers were calculated by weighting spending per student by institutions’ enrollment of each race/ ethnicity and gender subgroup. The weighting methodology used is similar to my analysis of institutional spending weighted by Pell and non-Pell eligible students in “Understanding Higher Education Finance.” Spending at each institution is attributed to demographic groups based on the percentage of total enrollment, and then total amounts for each demographic group at all institutions are divided by the number of students in that group.

This method is also like the one recently used in a recent analysis of racial differences in K-12 school district expenditures by Hannah Rubinton and Maggie Isaacson at the St. Louis Fed.  While Rubinton and Isaacson found similar levels of district spending by race (though differences in sources of funds), my analysis suggests that significant gaps in spending appear at the postsecondary level. Further analyses of other finance measures will focus on sources of revenue as well.

An interactive working draft of the chart below allows users to explore this spending measure for specific groups of institutions and/ or states. Note that some of the gaps among all institutions in the U.S. relate to differences among states, or differences between public and private institutions, where different groups of students are not evenly represented. These structural or compositional factors are important parts of the overall differences in average spending.

(Mobile users should click here for a better version of the interactive chart.)

Data Sources and Methodology

Data sources

IPEDS Finance (FY 2020)

IPEDS Institutional characteristics (2020-21)

IPEDS Enrollment (Fall 2020)

Finance variables

All finance variables are FY 2020.  Depending on institutions selected, data are combined from public (GASB), not-for-profit (FASB) and /or for-profit components of the finance survey as noted for each variable.  A few public institutions use the FASB format more commonly used by not-for-profits.

All used the parent/child allocation factors where those were reported to allocate expenditures to component institutions.

Where there were financial data reported at the system level (e.g. University of California system) not in a parent/child reporting format, these were allocated to institutions based on the share of total fall student headcount among all institutions who reported being a part of that system.

“Instruction and student services” combines these two reporting categories, which are roughly comparable across all three survey components.

Enrollment variables

Race/ethnicity and gender enrollments are total 2020 fall headcount.

Finance ratios

Instruction and student services per student (unweighted total) = Instruction and student services FY 2020 / Total 2020 fall headcount

Instruction and student services per student (weighted) = sum of all selected institutions (selected subgroup % of total enrollment * instruction and student services) / sum of selected institutions’ enrollment headcount of selected subgroup.

This method means that for a single institution, the values for any subgroup would be equal. Discrepancies only show up when more than one institution is included. For example, if an institution with higher instruction and services spending enrolls 75% men, and another with lower spending enrolls 75% women, the within-institution spending per student is assumed to be equal, but combining the two of them would show higher average spending per student for men.

Institution variables

“Category” divides institutions into three groups: 1) Those that are degree-granting and primarily or entirely associate and certificates. These should be used with “public” control to identify community colleges, including those that offer a few bachelor’s degrees. 2) Degree granting bachelor’s and graduate degree institutions. 3) Non-degree granting institutions offering certificate credentials only.

“Control” divides institutions into public and private (including both for- and not-for-profit).

“Carnegie” classifications are those in use in 2018, the most recent in the IPEDS data at the time.

“State” includes U.S. territories.

Works Cited

Johnson, Nate. Understanding Higher Education Finance. Brief. Tallahassee: Postsecondary Analytics, 2017. <https://postsecondaryanalytics.com/understanding-higher-education-finance/>.

Rubinton, Hannah and Isaacson, Maggie. School District Expenditures and Race. Economic Synopses, No. 3, 2022. St. Louis: St. Louis Federal Reserve Bank, 2022. Document. <https://doi.org/10.20955/es.2022.3>.