A Longitudinal Relationship Between Resource Allocation and Student Performance in Postsecondary Education
Type of DegreePhD Dissertation
Education Foundation, Leadership, and Technology
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Amidst increased enrollment, economic recession, and state budget cuts to postsecondary education over the past two decades, two and four-year colleges and universities have employed a multitude of different approaches to managing resource allocation. At the crux of this issue is the internal struggle each institution faces: improving the level of success and the overall experience of each enrolled student while also trying to keep costs down. Meanwhile, institutions must also ensure that each dollar spent contributes to the overall success and mission of the institution. This study examined adjustments in two and four-year institutions’ categorical FTE expenditures over a ten-year period and subsequent increases or decreases in graduation rates during that time-period. The results of this study indicated that a significant relationship existed between alterations in categorial expenditure patterns and improved graduation rates at both two-year colleges and four-year colleges and universities. Additional expenditures towards instruction and academic support at four-year institutions consistently shared a strong relationship with improved four-year graduation rates and a more modest relationship with improved six-year graduation rates. At two-year colleges, additional expenditures towards academic support were found to have a significant but modest negative relationship with improved three-year graduation rates. Multiple regression analyses revealed that resource allocation adjustments accounted for the largest amount of variance (14.4%) in four-year graduation rates at four-year colleges and universities. This study also noted that institutional selectivity at four-year institutions influences this relationship at four-year institutions. The primary objective of this study was to add a new layer and new perspective to the existing body of literature surrounding resource allocation; change over time. The findings of this study may have important implications for the trajectory of postsecondary education funding, investments in student level cohort tracking, and resource allocation priorities in the future as colleges and universities enter a competitive era resulting from the demographic shifts during the great recession.