No connection between Higher Education funding and economic growth

Despite years of claims to the contrary, a new study by the Oklahoma Council of Public Affairs and the Center for College Affordability and Productivity has found that increased investment in higher education does not yield economic growth.
The report, Oklahoma Higher Education: Challenging the Conventional Wisdom, dispels the notion that more funding for public colleges and universities is necessary to spur economic development, for a variety of reasons.

“Oklahoma’s colleges and universities are not starving for funds,” report co-author Matthew Denhart said. “Rather than asking taxpayers to continually foot larger and larger bills for higher education, it’s time for the state’s colleges and universities to reevaluate their priorities and invest their resources more strategically.”
The study found that while revenues and expenditures have grown rapidly at Oklahoma’s universities during the last decade, expenditures are highly inefficient and contribute little to educational attainment, graduation rates remain embarrassingly low and out-migration of the students who do graduate remains alarmingly high.
According to the report, only 40 percent of total revenues at four-year public universities in the state are spent on areas related to student instruction. Instead, revenues are directed toward administration, research and “public service,” areas that have little direct impact on student achievement.
Not only are expenditures highly inefficient, but the lack of a rigorous curriculum and engagement among college students nationwide leads to high dropout rates.
In 2009, only 4 percent of students graduated from Rogers State University in Claremore within four years and only 14 percent graduated within six years. Cameron University in Lawton wasn’t much better, graduating 6 percent of students in four years and 20 percent in six years. The University of Oklahoma and Oklahoma State University graduated just 29 percent and 31 percent in four years and 63 percent and 60 percent in six years, respectively.
In all, less than 20 percent of Oklahoma college students graduate within four years. At the same time, the study found Oklahoma graduates leave the state at a shocking rate. Between 1994 and 2008, the state experienced a net loss of more than 145,000 college graduates, nearly 10,000 each year.

“If public universities are not focusing on education, it only makes sense that students are not learning much,” the report’s co-author Christopher Matgouranis said.  “If only half of our college students are even earning a degree and a large percentage of those leave the state upon graduation, should we really expect that dropping more public money over college campuses will spur economic development?”

OCPA is a nonprofit, nonpartisan think tank which formulates public policy research and analysis consistent with the principles of free enterprise, limited government, and individual initiative.
The Center for College Affordability and Productivity is an independent, not-for-profit research center based in Washington, DC that exists to help facilitate a broader dialogue on the issues and problems facing the institutes of higher education in the United States.

To read the full report, click here.