Understanding the Influence of the Financial Context of Institutions on Student Persistence at Four-Year Colleges and Universities

By Titus, Marvin A. | Journal of Higher Education, March-April 2006 | Go to article overview

Understanding the Influence of the Financial Context of Institutions on Student Persistence at Four-Year Colleges and Universities


Titus, Marvin A., Journal of Higher Education


As the 1990s came to close and the twenty-first century began, college student retention and graduation rates became an increasingly important issue. Policy makers at the federal, state, and campus level continue to focus on retention and graduation rates even though more remains to be learned about how institutions contribute to college student persistence. Examining the financial context in which institutions operate may help us to understand further how institutions affect student persistence. This study is unique in that it uses resource dependency theory to frame an examination of the influence of the financial context of institutions on student persistence at four-year colleges and universities. This research reveals that, after taking student predictors into account, the percent of an institution's revenue derived from tuition positively influences college student persistence while the percent of an institution's expenditures on administration negatively influences it.

Student Persistence and the Financial Context of Institutions

In an effort to link budget allocations to institutional accountability, a majority of states use graduation or retention rates as one of several indicators of performance for higher education institutions and performance funding or budgeting (Burke & Minassians, 2001). Policy makers at the federal level are considering policy options, associated with the 2003 reauthorization of the Higher Education Act, which include linking institutional eligibility for federal student financial aid programs to institutional graduation rates (Burd, 2003).

While policy makers are making an effort to link public funding to institutional persistence rates, the relative importance of public funds as a source of institutional revenue has actually declined (NCES, 2001). Between 1981 and 2000, state appropriations, as a percent of all funds to degree-granting public higher education institutions, fell from 44.0% to 32.3% (NCES, 2003). Over the same period, the percent of revenue derived from tuition increased from 12.9% to 18.5%, while the percent of revenue derived from federal grants and contracts rose from 8.8% to 9.4% (NCES, 2003). This shift in funding sources for degree-granting public higher education institutions occurred as changes in institutional expenditure patterns took place. Between 1981 and 2000, the percent of total education and general expenditures on instruction fell from 35.1% to 31.5%, while the share of expenditures on administration rose from 8.4% to 9.0% (NCES, 2003).

Some researchers (e.g., Leslie & Slaughter, 1997) observed that colleges and universities have taken more market-based approaches to increasing their share of revenues from such sources as tuition and competitive grants and contracts, while others (e.g., Francis & Hampton, 1999) showed that research universities have also adjusted their internal allocation of financial resources in response to the relative decline in the importance of public funds as a source of revenues. According to an American Council on Education (ACE) survey (Anderson, 1985), as state appropriations decline and higher education institutions become more dependent on tuition as a source of revenue, colleges and universities tend to increasingly focus on retaining students. Turner (in press) contends there is a need to understand how the financial environment of colleges and universities influence student persistence.

Although past research (e.g., Cabrera, Nora, & Casteneda, 1992; Paulsen & St. John, 2002; Perna, 1998) has addressed the relationship between student-level financial variables and student persistence, the influence of the financial context of institutions on persistence has not been systematically explored. Most of the research that addresses the role of finances in persistence, using either single-institution (e.g., Cabrera, Nora, & Casteneda, 1992) or multi-institution data (e. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Understanding the Influence of the Financial Context of Institutions on Student Persistence at Four-Year Colleges and Universities
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.