EDA 388E: Higher Education Economics and Finance Policy

Course Objectives
Class Profile
Instructor/Office Information
Course Outline
Useful WWW Links

Course Objectives

This course is designed to provide students with an overview of the economics and financing of American higher education. It will provide a broad introduction for students whose primary interests are in other specialty areas of higher education, and it will provide a base of reference for those planning to proceed further into the area of higher education finance. Specific objectives of this course include providing students with a basic understanding of:

  1. The literature on the economics and financing of higher education; 
  2. The economic value of higher education, including the personal and societal returns from investing in higher education;
  3. The methods by which higher education is financed in this country;
  4. The costs of higher education;
  5. Higher education budgeting concepts and processes as they apply to institutions and to states.



The primary teaching methods for this course will consist of the following:

  1. Lectures by the instructor and guest experts,
  2. Assigned readings,
  3. Discussions concerning the various topics covered in lectures, assigned readings, and other events,
  4. Class presentations by students,
  5. Assigned case study,
  6. A term paper concerning some area of higher education finance.

Class Profile

The bulk of each class session will be spent discussing the topic(s) assigned. The structure of specific sessions may vary depending on the topic being discussed. However, an attempt will be made in each class to provide some time for discussion of finance-related topics that may surface as a result of events on campus, at the Capital, or elsewhere.


  1. ASHE Reader on Finance in Higher Education, 2nd Edition, Pearson Custom Publishing, 2001.

    The Student Aid Game. Michael S. McPherson & Morton O. Shapiro, Princeton University Press, 1998.

    EDA 388E Course Packet, Co-op Custom Publishing. This packet of articles and readings contains many of the articles and readings that are required for this course. It has been specially prepared for this course, and is available at the University Co-op.

    Bibliographic references for any additional reading assignments will be provided as appropriate. These materials will either be distributed or made readily available.

  2. Case Study: Preparation and in-class discussions of a case study will be required. Students will be expected to evaluate situations, identify problems, and recommend solutions.

  3. Group Exercise: Preparation and in-class discussion of a group exercise will also be required. The class will be divided into groups and each will be assigned a role for the exercise. The groups will be expected to evaluate a situation and make recommendations from the perspective of their roles. One report (i.e. summary of recommendations and justification) will be expected from each group. One class session will be devoted to a group simulation where recommendations will be presented and discussed.

  4. Term Paper and Class Presentation: Each student will prepare a paper concerning a topic selected by the student and approved in advance by the instructor.

    Topic Examples (should be considered as illustrations only):

      A history of the Permanent University Fund and its role in financing UT
      The history of the Texas Tuition Equalization Grant Program
      A history of TIAA/CREF
      The role of the Higher Education Assistance Fund
      The history of fund-raising in American higher education
      Community College fund-raising
      Financial Aspects of Gender Equity in Intercollegiate Athletics
      Responsibility Center Budgeting
      Early Retirement and Its Financial Implications
      A Funding History of American Indian Tribal Colleges
      The Financial Structure of U.S. Medical Schools
      Financing Distance Education
      College Saving Plans
      The Development of UTIMCO
      Financial Aid: State Scholarships and Tax Credits
      The Funding of Traditionally Black Colleges and Universities
      Merit Based Financial Aid


Students will be evaluated in all facets of this course. The weights will be as follows:

Weekly Class Participation 35%
Case Study 20%
Group Exercise 20%
Term Paper/Presentation 25%

Incompletes: There are often questions concerning my policy on Incompletes. I do not like them and strongly encourage students to avoid them. Nevertheless, I will work with students who for good and valid reasons find that they cannot finish their assignments on time. However, the student should understand that there will normally be a penalty assessed when the work has been completed and the final grade is assigned.


Instructor/Office Information


Dr. William F. Lasher, Vice Provost
Professor, Department of Educational Administration


Office of the Executive Vice President and Provost, MAI 201
Educational Administration, SZB 374D


EDA: Thursday: 1:30-3:30 p.m. (appointment not necessary, but recommended
Other times in the Provost's Office, by appointment only

Because of my administrative responsibilities, it may be necessary for me to cancel or postpone office hours on a particular day. In such cases, I will try to leave a sign on my SZB office door indicating when I will return. When in doubt, call for an appointment or e-mail me.


Provost's Office (PO): 232-3305 (Cheryl Kaufman, Administrative Assistant)
EDA: 471-7551

Voice Mail:

Provost's Office: 232-3305; EDA: 475-8586


Provost's Office: 471-0577; EDA: 471-5975



Methods of Communication:

Because of my administrative responsibilities, e-mail and voice mail are the two best ways of communicating with me outside of class. We will establish a class listserv for blanket communications.

 Course Outline


Class Date



(Note: ASHE = ASHE Reader,

M&S=McPherson & Schapiro,

CP=Course Packet,)

*= Recommend Skim)

Aug. 30

Introduction: Course Objectives,

Expectations, Current Overview

Sept. 6

General Economics & Financing of

ASHE: 1 Johnstone

Higher Education

ASHE: 2 Johnstone *

ASHE: 4 Inst. Hi Ed Policy

ASHE: 8 Hauptman

ASHE: 11 Brenneman & Finney

CP: 1 Zemsky & Wegner

CP: 2 Bowen *

Sept. 13

Higher Education as a Financial

ASHE: 3 Winston

Organization; Fund Accounting

CP: 3 Winston

ASHE: 41 Meisinger & Dubeck

ASHE: 42 Winston *

Sept. 20

The Role of the States in Financing

CP 4: McKeown-Moak

Higher Education; Formula Funding;


Performance Funding

ASHE: 12 Hovey

CP 6: Layzell & Lyddon

ASHE: 14 Palmer

(First Case Study distributed)

CP 7: Education Commission of the States

CP 8: McKeown

Texas Formulas

ASHE: 13 Layzell

CP 9: Burke, Rosen, Minassians, Lessard

Sept. 27

First Case Study- Discussion

Oct. 4

Higher Education as Investment in

CP 10: Leslie & Brinkman

Human Capital, as a Private Benefit;

CP 11: OPPORTUNITY (10/00)

as a Public Benefit

CP 12: OPPORTUNITY (11/00)

ASHE 5: Monks *

ASHE 6: Kane & Rouse *




CP 16: OPPORTUNITY (10/00)


State Auditor's Report

Oct. 11

Planning & Budgeting Concepts

ASHE: 40 Lasher & Greene + Epilogue

CP 18: Meisinger

ASHE: 34 Chaffee *

(Group Exercise distributed)

ASHE: 35 Schmidtlein

ASHE: 36 Brinkman & Morgan *

ASHE: 38 Massy *

ASHE: 45 Lang

ASHE: 46 Strauss, Curry, Whalen *

Oct. 18

Tuition: Source of Revenue, Determinants

ASHE 4: Inst. Hi Ed Policy

of Cost

Nat'l Cost Commission (1-22)

New Agenda Series: *

  • "Cost, Price, and Public Policy: Peering into the Higher Education Black Box" by William L. Stringer and Alisa F. Cunningham *
  • "Discounting Toward Disaster: Tuition Discounting, College Finances, and Enrollments of Low-Income Undergraduates"by Kenneth E. Red *

CP 19: Wellman

CP 20: Ehrenberg *

ASHE 16: Stampen & Layzell *

ASHE: 44 Rooney, Borden, Thomas *

Oct. 25

Group Exercise

Nov. 1

Financial Aid

M&S: Part One

Grants, Loans, Debt

ASHE: 9 Hauptman & Krop

ASHE: 10 Hearn

ASHE: 17 Hauptman *

"Debts and Decisions: Student Loans and Their Relationship to Graduate School and Career Choice" by Donald E. Heller *

CP 21: Heller *

Nov. 8

College Affordability

M&S: Part Two

"College Affordability: Overlooked Long-Term Trends and Recent 50-State Patterns" by Jerry S. Davis *

CP 22: Ikenberry & Hartle

CP 23: Schmidt *

Nov. 15

Development, Endowments

CP 24: Pulley

Asset Management

CP 25: Pulley

NACUBO-Endowment Definitions *

ASHE: 19 Tharp

ASHE: 20 Morrell

ASHE: 21 Nahm & Zemsky *

ASHE: 22 Yoder *

ASHE: 23 Matkin *

UTIMCO -- UT Investment Management Company

Nov. 22

Thanksgiving -- No Class

Nov. 29

Expenditures: Administrative Costs,

ASHE: 26 Waggaman

Information Technology, Physical Plant

ASHE: 27 Massy *

Assets, Athletics

ASHE: 28 Leslie & Rhoades

ASHE: 29 Ringle

ASHE: 30 Oberlin *

"Funding the 'Infostructure:' A Guide to Financing Technology Infrastructure in Higher Education" by Ronald A. Phipps and Jane V. Wellman *

ASHE: 31 Daigneau

CP 26: Golding, Gordon, & Gravina *

CP 27: Jayson *


CP 28: Suggs *

Dec. 6

Expenditures: Faculty Compensation


Papers Due

ASHE: 32 Hearn

Course Evaluations

ASHE: 33 Chronister

CP 30: Smallwood

CP 31: Cox

Useful WWW Links

Texas State Sites
Texas Legislature Online
Legislative Terminology
Basic Steps in the Texas Legislative Process

Texas Legislative Budget Board

Texas State Comptrollers Office

Texas Higher Education Coordinating Board

Texas Guaranteed Student Loans

U.T. Sites

U.T. System

UTIMCO -- UT Investment Management Company

National Higher Education Sites

American Association of State Colleges and Universities (AASCU)

American Council on Education (ACE)

The College Board


The Institute for Higher Education Policy

National Association of College and University Business Officers (NACUBO)

National Association of Student Financial Aid Administrators (NASFAA)

National Center for Education Statistics (NCES)

National Center for Public Policy and Higher Education

Rockefeller Institute of Government

State Higher Education Executive Officers (SHEEO)

National Government Sites

Education Commission of the States

National Association of State Budget Officers (NASBO)

National Conference of State Legislatures -- NCSL

National Governor's Association

States Online


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The College of Education at The University of Texas at Austin

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