State Cuts Hit Honors Programs and Affect U.S. News Rankings

State funding for higher education fell by almost $6 billion from 2011 to 2012, and the impact on public honors programs and the U.S. News rankings of state universities is significant.

Although a lot of the drop-off in state support has come about because federal stimulus monies are no longer flowing to universities, the harsh truth is that state appropriations in 2012 are almost $3 billion less than they were in 2007, just before the severe recession hit and well before stimulus funds were available.

Only ten states saw a net increase between 2007 and 2012, and some of the states hit the hardest are those with universities among the fifty that we follow on this site.

(This information comes from the Grapevine Annual Compilation of Data on State Fiscal Support for Higher Education, produced by the Center for Study of Education Policy at Illinois State University, James C. Palmer, Editor.)

The immediate impact on many honors programs will be an increase in class sizes, a wrenching development because smaller class sizes are at the center of the public honors mission to give exceptional students an experience that approximates or surpasses that of students at leading liberal arts and private research universities.

As a part of our lengthy analysis of U.S. News rankings, we have observed that the relationship of the “Financial Resources” and “Faculty Resources” categories utilized by the magazine provide interesting insights into the way the ample resources of many private universities give them such a dominant presence in the rankings. (In separate posts, we discuss the decline of public universities that are among the top 25 in the rankings.)

According to the magazine, the Financial Resources category (10% of the total) is essentially “the average spending per full-time-equivalent student on instruction, research, public service, academic support, student services and institutional support during the 2009 and 2010 fiscal years,” including spending for graduate students. For reasons that are not clear from the explanation, U.S. News also includes as a part of spending the “operations and maintenance” expenses “(for public institutions only.)”

The Faculty Resources category (20% of the total) assigns about two-thirds of its total points for faculty pay and the percentage of classes with 19 or fewer students. The faculty pay is adjusted for cost-of-living variations.

The key to the two categories is the ratio of Faculty Resources to Financial Resources: in other words, how much of the total money available is used for faculty pay and for a sufficient number of faculty (with the highest level of degree) to keep class sizes small.

What budget cuts do to most public universities is make them choose between having a competitive (and higher-paid) faculty that will maintain or boost academic quality or having a greater number of less-qualified faculty so that they can offer more–and smaller–classes.   And, almost always, taking only one of these actions requires an increase in tuition.

The well-heeled private research universities are not burdened with this painful choice, and tuition increases are more easily offset for those in need of assistance. On the other hand, since the 50 state universities we track are the best pubic universities in the nation, their choice is generally to hold on to the quality that they have struggled to achieve, even if it means seeing their class sizes go up. And…their U.S. News rankings go down.

Indeed, their rankings would likely suffer regardless of the choice they make between quality faculty and class size. Another, and lesser reason for emphasizing faculty quality in this case is that the U.S. News category of Academic Reputation, at 22.5% of the total, is the most influential single category in the rankings.

As evidence of these relationships, here are some numbers showing the ratio of Faculty Resources to Financial Resources for the 36 leading private institutions and the 14 public institutions that we follow and that are also in the top 50 U.S. News Rankings:

The average ratio of Faculty Resources to Financial Resources for the elite private universities is 1.63 to 1.00, while the ratio for the 14 public institutions is .914 to 1.00. In other words, the private schools are able to spend a disproportionate amount of their money on the areas that U.S. News values the most: faculty compensation, number of faculty per student, and the enhancement of academic reputation.

The two lowest ratios among the private universities are those for Rensselaer Polytechnic Institute (.812 to 1.00) and Wake forest (.851 to 1.00). By contrast, only six of the public universities have ratios higher than that of Wake Forest.

So there we have the unhappy equation for public universities in the current climate of state spending reductions: severe cuts+larger classes=general decline in rankings and less interactive honors education.  What this means for the nation is that excellence in higher education is becoming increasingly restrictive.