Influence of 1945 -1975 on Present Day Higher Education
Finances during this era reflect the earlier influences from the Colonial era just as they impact the financial future of American higher education. Colsson (2010) states three ways in which the study of historical events contributes to current events. First, it allows us to understand the foundational grounds to move forward toward a better future. Second, this understanding allows people to create and customize solutions to current problems. Lastly, it helps us to understand ourselves. The understanding of the foundational contributions of finances in American higher education lead to an ability to alter current practices.
Salaries and Benefits
One of the greatest pieces of American higher education finances is toward the application of staff salaries and benefits. Amherst College in Amherst Massachusetts claims that approximately half of its $155 million goes toward the benefits and salaries of faculty and staff(Boultier, 2010). This statistic remains consistent across the educational field as other institutions of higher education put forward their spending expenses (Bates College, 2009; Smith College, 2010; Tam, 2010). However, this financial obligation was not always true in higher education.
During the Colonial era, faculty received little pay for their vocation. There were few professors. Most of the faulty consisted of tutors who were “thankful for their subsistence” (Cohen & Kisker, 2010, p 30). Despite the feeble pay schedule the duties of these professionals outweighed many of the duties of current faculty members. They not only taught the students but frequently lived with them, monitored their students’ comportment and discipline and were even frequently discouraged from marrying as they had to watch these boarded students all day.
The 1945 to 1975 era demonstrated a markedly different compensation schedule. Salaries for faculty and staff still contributed to be half of the budget as does current day expenses. However, the compensation did not match the inflation rate. At the beginning of the era, the median salary for a professor was $6,015 compared to the end of the era which increased to $15,622. Yet, this gain in income did not mark the increase in the inflation rate (Cohen & Kisker, 2010).
This inability to match the inflation rate continues in today’s academic world. During 2009, the recession greatly determined academic pay. Professors were given an annual pay raise of 1.2 percent (from an average of $109,843 salary) which was the smallest pay increase in the last 50 years. The 1.2 percent pay raise could not compensate for the 2.7 percent inflation rate of the same year. This pay discrepancy was consistent across higher education in both public and private schools from vocational to comprehensive universities (Lewin, 2010).
Other expenditures in higher education which compose the additional 50% of the budget include instructional fees, academic support, student services, maintenance and administrative fees (Bates College, 2010). These expenses are maintained through the continued support of public and private funds. Bates College (2010), a private institution, claims that 72% of its income is derived through student tuition and only 14% through government support. Compare this statistic to the public sector. The University of California (2010) receives 38% of its budget revenue from student tuition whereas 50% is derived from governmental support.
Funding, one of the major responsibilities of earlier college presidents and governing boards, demanded greater attention. To meet this demand, institutions of higher education created departments to acquisition funds. This led to more opportunities as colleges opened a new career for philanthropy. The Center of Philanthropy, maintained by Indiana University Purdue University Indianapolis (IUPUI), provides students and professionals with “the historical and philanthropic context, the current issues, and the art and science of fundraising and philanthropy. You gain the knowledge needed to build your organization’s resources with confidence and success in an ever-changing society” (IUPUI, 2010, p 1).
This educational resource has obvious need in the current economic forecast. Many public and private universities report the need for budget cutbacks. Montana State University reports the impending budget cutbacks as they lose continued support from state funding. The state governor proposed a 5% decrease in budget support which equates to $7.6 million (Pickett, 2010). This cutback raises a substantial financial threat to a university which obtains a majority of its income from governmental support. Additionally, Montana state has sliced its financial support of its state university from 73% to 47% (Stand Up for Education, 2010).
These cutbacks are passed down from state to institution to the students, faculty and staff. The University of Texas will be forced to eliminate 10% of staff and faculty to meet these cutbacks. Compare this to Utah State. These state universities will lose up to 600 positions. This relates to a problem for students as the ratio between student and faculty is greatly effected (Perrone, 2010).
The overall foundation of finances in higher education has made little progress since its infancy in the history of the United States. The major concerns of institutions through the decades and centuries continues to center around the limited resources available to them. These financial resources are competed for as universities and colleges struggle to maintain solid footing during times of economic uncertainty.
Bates College. (2009). Budget and Finance Advisory Committee FAQs. Retrieved from www.bates.edu/x197277.xml
Boultier, E. (2010). Trustees explain endowment losses and budget plans. Retrieved from www.amherst.edu/aboutamherst/magazine/extra/node/95671
Cohen, A. & Kisker, C. (2010). The shaping of American higher education: Emergence and growth of the contemporary system. San Francisco: Jossey-Bass.
Colsson, R. (2010). Understanding how history affects our present and future. Retrieved from ezinearticles.com/?Understanding-How-History-Affects-Our- Present-and-Future&id=3945634
IUPUI. (2010). The fundraising school. Retrieved from www.philanthropy.iupui.edu/thefundraisingschool/
Lewin, T. (2010). Study Finds a 1.2 Percent Increase in Faculty Pay, the Smallest in 50 Years. Retrieved from www.nytimes.com/2010/04/12/education/12faculty.html
Perrone, C. (2010). State budget cuts may terminate 600 UT employees. Retrieved from www.readthehorn.com/the_horn/campus/3350/state_budget_cuts_may_terminate_600_ut_employees
Pickett, M. (2010). Regents to look at university system budget cuts Thursday. Retrieved from billingsgazette.com/news/state-and-regional/montana/ article_671d9d96-0abb-11df-abc8-001cc4c002e0.html
Smith College. (2010). Grant Budget Rates and Information. Retrieved from www.smith.edu/deanoffaculty/Grant%20Budget%20Rates%20and%20Information.pdf
Stand Up for Education. (2010). Higher education funding issues. Retrieved from www.standupmontana.org/hEDissues.htm
Tam, D. (2010). College of the Redwoods: Closing campuses, reducing benefits possible solutions to budget crunch. Retrieved from www.times-standard.com/localnews/ci_15140932
University of California. (2010). 2009-2010 projected revenue. Retrieved from www.universityofcalifornia.edu/budget/documents/uc_budget_graphs.pdf