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Key Takeaways


Public HBCUs spend more on instruction, relative to revenue, than any other institution type.

When instructional spending and other education related expenses are factored into the calculation, both private and public HBCUs spend more on instruction than corresponding non-HBCU institutions.

The median student at a public HBCU has a greater proportion of their school’s revenues spent on their instruction, relative to tuition.

Overview

We are excited to present the findings of a groundbreaking analysis by Wesley Peachtree Institute, Wesley Peachtree Group, and Genesis Ed Solutions that sheds light on the unique value that historically Black colleges and universities (HBCUs) provide with respect to revenue from tuition and public funding. Replicating the methodology from an earlier report by The Century Foundation, the researchers used publicly available data from the U.S. Department of Education’s IPEDS (Integrated Postsecondary Education Data System) survey to compare instructional spending to tuition revenue for all 2,334 U.S. bachelor-degree granting institutions, revealing a compelling story: Despite well-documented historical and chronic underfunding, HBCUs as a group invest a greater percentage of their revenue into instruction than comparable non-HBCU institutions. These findings hold true at the national, institutional, and student levels, indicating that HBCUs present a best-in-class value for higher education consumers and public investment.

Implications For Policy, Practice, And Research

imageThis analysis bolsters the business case for investment in HBCUs. Despite under-resourcing, HBCUs secure economic mobility and other measures of post-college success for vulnerable students, particularly first-generation college students, Black students, and other students of color. We now have evidence that they do so while maintaining higher instructional spending ratios compared to their counterparts. Increased levels of public and private support are justified and necessary to ensure that HBCUs can continue to thrive and effectively serve the public good.

Refining IPEDS finance survey variables and tracking over time may improve accountability and transparency. For instance, the IPEDS Instruction category combines colleges’ expenditures directly impacting instruction with others that are less related to their core function, such as marketing, admissions, and recruiting. By better segmenting data categories, educational agencies, accreditors, and the public can have greater confidence that publicly reported instructional spending totals reflect true investment in education. In addition, tracking and reporting instructional spending ratios annually can help consumers, policymakers, and institutional leaders identify trends over time and evaluate the influence of specific strategies, providing a tool for data-driven decision making.

It is up to researchers to evaluate the impact of strategies, not just structures. The logical next step to economic accountability models is an expanded research agenda that examines the outcomes graduates experience and determines “best value” approaches to educating vulnerable college attenders. Data that assess academic and student support strategies through the dual lenses of cost-effectiveness and instructional effectiveness have great potential to aid philanthropists, policymakers, and institutional leaders as they navigate resource constraints to make critical investments in higher education.

In conclusion, this analysis provides compelling evidence that HBCUs are leading the way in instructional spending. By right-sizing public and private investments in HBCUs, creating structures for accurate reporting and tracking of instructional expenditures, and evaluating teaching and learning strategies using a “best value” approach, we can make progress toward shaping an equitable higher education ecosystem in which all consumers receive the quality education they deserve.

WPG CPAs

The Wesley Peachtree Group, CPAs (WPG) is a full service accounting firm. A leading service provider to institutions of higher education, WPG specializes in providing bespoke services to HBCUs, minority serving institutions, and small colleges.

WPI

Founded by WPG to support the missions and sustainability of institutions of higher education, the Wesley Peachtree Institute provides valuable data and actionable information to leaders through its research and analysis and during its annual HBCU and Small College Forum.

Genesis Ed Solutions

Genesis Ed Solutions works with higher education leaders to develop and deploy strategies that promote stability and ensure they are able to successfully serve their students and communities.


A Word From Our Managing Associate and CEO

We commissioned Genesis Ed Solutions to conduct an exploratory analysis comparing the instructional spending ratios of HBCUs to those of non-HBCUs. Their analysis of spending ratios at all US four-year degree-granting institutions revealed HBCUs spend a greater percentage of their revenue on student instruction than their non-HBCU peers. The study underscores the value of investing in HBCUs. We encourage you to reference it in fundraising and appropriations discussions. Download the complete report here.

Don Murphy, CPA, FCPA, CFE, CGFM, CGMA
founder of The Wesley Peachtree Group, CPAs and the Wesley Peachtree Institute