Cost Analysis in Higher Education

by Frederick Balderston

Fall 1974

Volume 17
Issue 1

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This article focuses on the various aspects of cost analysis for the individual institution. Costs and cost predictions are an important aspect, though of course they are not the whole story, in developing plans and designing planning models. Cost effectiveness and "trade off" studies can assist considerably in the review and reworking of institutional commitments and priorities. There are numerous examples of planning and decision issues for which cost concepts and measures that are appropriate to each situation are important. Facilities planning over long future horizons also may compel the study of patterns of future growth in enrollment and programs and the examination of usage rates and standards for accommodating such growth. There is much talk of new educational technologies and new patterns of organization of instruction and there is even a certain amount of actual initiation of such new approaches. Sometimes these proposals are put forward with the stated intention of saving money. It takes careful and costly design effort involving cooperation between academic people and those who know new technologies, to put coherent proposals together. The analysis of their initial costs and future patterns of operating costs entails special hazards because the realization of the technological and educational design is a developmental problem in itself.

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