Measuring Expenditures Using IPEDS

The Integrated Postsecondary Education Data System (IPEDS) is the most comprehensive source of data on the expenditures of U.S. higher education institutions. Below, I list the 11 expenditure categories included in the IPEDS finance survey. Each category is accompanied by a brief description, as some titles can be ambiguous.

• Instruction: Credit and non-credit instruction conducted by teaching faculty, including academic, occupational, vocational, community, adult, remedial, and tutorial instruction.

• Student Services: Admissions, registrar activities, and non-instructional activities promoting student well-being and development (e.g., career guidance, counseling).

• Research: Activities specifically organized to produce research outcomes.

• Public Service: Activities established primarily to provide noninstructional services (e.g., conferences, public broadcasting, cooperative extension) to those outside of the institution.

• Academic Support: Items (e.g., libraries, curriculum development, personnel development) supporting the institution's primary mission of instruction, research, and public service. 

• Institutional Support: Day-today operational support of the institution, such as executive management, legal and fiscal operations, public relations, and general administration.

• Scholarships: Scholarships provided via outright grants to students that are used to cover items (e.g., off-campus room and board) not provided by the institution.

• Auxiliary Enterprises: Self-supporting operations that provide a survice to students or employees and charge a fee related to the cost. Examples are residence halls, food services, and stores. 

• Hospitals: Hospital operations, including costs for nursing and a range of services (administrative, general, fiscal, and other professional).

• Independent Operations: Items independent of the institution's primary mission. This category generally only includes major federally funded research and development centers.

• Other Expenses: All items other than those listed in the preceding categories.

Two Common Summary Measures

Researchers have long used two broad measures to summarize institutional expenditures:

• Total Expenditures: The sum of all 11 categories. This provides a complete picture of institutional spending.

• Education and General (E&G) Expenditures: The sum of the first seven categories, intended to capture the core expenditures of the institution. This measure excludes the final four categories, which typically reflect peripheral activities less directly tied to the institution’s primary missions of instruction, research, and public service.

Refining Summary Measures: Delta Cost Project Approach

Researchers at the Delta Cost Project (DCP) introduced additional measures to better isolate student-related spending. They disaggregated E&G expenditures, excluding scholarship expenditures, into three components:

• Education and Related (E&R) Expenditures: Includes instruction and student-services, plus a proportional share* of academic support and institutional support.

• Research and Related Expenditures: Includes research, plus a proportional share* of academic support and institutional support.

• Public Service and Related Expenditures: Includes public service, plus a proportional share* of academic support and institutional support.

Note: Proportional shares are calculated using the sum of instruction, student services, research, and public service expenditures as the denominator.

• For the E&R measure, the numerator includes instruction and student services.

• For the other two measures, the numerator includes either research or public service expenditures.

Recommendation: Use Core Expenditures Instead of E&G 

E&G expenditures include scholarship spending, which are primarily used to cover off-campus room and board, making them more comparable to auxiliary expenditures (which include on-campus room and board). For this reason, I recommend using a core expenditures measure—defined as the sum of the first six categories—instead of E&G.

This core measure can be:

• Disaggregated into the six individual categories, or

• Grouped into the three DCP measures described above.

Data Availability and Cautions

You can download a dataset containing these expenditure measures for nonprofit two-year and four-year colleges, covering fiscal years 2004 through 2023.

Although IPEDS is the best available source for institutional expenditure data, researchers should proceed with caution:

• Assigning expenditures to specific activities is inherently difficult. Institutions vary in how they make these assignments.

• Some IPEDS categories combine distinct types of expenditures, complicating interpretation.

The primary alternative—the University of Delaware’s Cost Study—had its own limitations and was recently discontinued due to declining participation.