ESTIMATING TEACHING COSTS
ANZATS 2009
ESTIMATING TEACHING COSTS
IN HIGHER EDUCATION
Approach







Establish a base case
A standard unit for a given class size
All costs related to an hourly rate for academics
Alternative approaches could be taken
Uses the Education Services (post-secondary education)
Award 2010
Starts with a teaching only institution
Funding derived from fee income
Note - graphs adjusted for lower rates, but not tables
1
ESTIMATING TEACHING COSTS
ANZATS 2009
Worked example – base case
Table 1
TIME REQUIRED TO DELIVER A STANDARD UNIT TO
20 STUDENTS
Numbe
Total
Item
Hours/unit
r of
hours
units
Class size
20
Course revision
20
1
20
Lecture contact
39
1
39
Lecture preparation
39
2
78
Tutorial first contact
1
0
Tutorial subsequent contact
-1
Tutorial preparation for first
2
0
Tutorial preparation for rest
1
Marking
1
20
20
Student enquiries etc
0.33
20
7
Total
164
2
ESTIMATING TEACHING COSTS
ANZATS 2009
Figure 1
TIME TO DELIVER A STANDARD UNIT BY TASK
Student enquiries etc
Tutorial prep 2nd+
Tutorial 2nd+ contact
Lecture prep
Course revision
0
50
100
150
200
250
300
h o u rs p e r u n i t
3
ESTIMATING TEACHING COSTS
Table 2
ANZATS 2009
ACADEMIC DUTIES BY HOURS PER ANNUM
Item
Minimum Maximum
Teaching
Research
Professional & administrative service
Formational
Basic administration and contingency
Total
Say 600
0
Say 100
250
250
1800
1300
600
300
600
250
1800
Base
case
1300
0
50
200
250
1800
Rate per
hour
=
(salary + salary oncosts + non-salary oncosts) +
a ratio * (support staff salary + salary oncosts + nonsalary oncosts)
Permanent
academic
rate
=
(salary + 25% + 67%) + 1 * (support staff salary + 25% +
67%)
Casual
academic
rate
=
(hourly rate + 20% + 50%) + 0.7 * (support staff salary +
25% + 50%)
4
ESTIMATING TEACHING COSTS
Table 3
ANZATS 2009
ACADEMIC STATISTICS USED IN MODEL
Item
Academic salaries and benefits
Non-academic salaries and benefits
Total salaries and benefits
Non-academic salaries as %
academic salaries
Ratio of non-academic staff to
academic staff
Minimum Maximum
Total
sector
30%
26%
55%
85%
1.0:1
1.9:1
1.3:1
Sources: DEEWR 2008, DEST 2008
Resulting hourly rates
 $170 for a lecturer and
 $140 for a tutor, and
 $100 for a casual lecturer.
Simplified formulas - hourly rate multiplied by 5 for lecturers, 6 for
tutors, and 3 for casual staff.
5
ESTIMATING TEACHING COSTS
Table 4
ANZATS 2009
COSTS OF DELIVERING A STANDARD UNIT TO 20 STUDENTS
Item
Course revision
Lecture contact
Lecture preparation
Tutorial first contact
Tutorial subsequent
contact
Tutorial preparation for
first
Tutorial preparation for
rest
Marking
Student enquiries etc
Total
Total
hours
20
39
78
0
Cost per
hour
179
179
179
147
Total
cost
3,575
6,971
13,941
0
Percent
of total
12%
24%
48%
0%
0%
0
147
0
0%
0%
20
7
164
179
179
3,575
1,180
29,240
12%
4%
100%
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ANZATS 2009
ESTIMATING TEACHING COSTS
Table 5
COST OF A STANDARD UNIT USING CASUAL STAFF FOR 20
STUDENTS
Time per standard
unit
Course revision
Lecture contact
Lecture preparation
Tutorial first contact
Tutorial subsequent
contact
Tutorial preparation
for first
Tutorial preparation
for rest
Marking
Student enquiries etc
Total
20
39
78
0
0
34
34
30
0
1,330
2,660
0
Total
Total
cost
direct
per
&
hour indirect
cost
0
0
96
3,730
96
7,460
0
0
30
0
0
20
7
164
34
34
682
225
4,897
Total
Direct
hours cost/hour
Total
direct
cost
92
92
1,835
605
13,630
7
ANZATS 2009
ESTIMATING TEACHING COSTS
Table 6 COST OF DELIVERING A UNIT BY DISTANCE EDUCATION ONA 3 YEAR
CYCLE
Time per standard unit
Course revision
Lecture contact
Lecture preparation
Tutorial first contact
Tutorial subsequent
contact
Tutorial preparation for
first
Tutorial preparation for
rest
Marking
Student enquiries etc
Total
50
39
39
0
1
1
3
0
50
39
117
0
20
0
39
0
Total
direct
&
indirect
cost
5362
2324
11618
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0.67
10
10
10
7
223
10
7
76
3575
2395
25273
Hours Number
/unit of units
Hours
Hours for
for first subsequent
offering
offering
8
ANZATS 2009
ESTIMATING TEACHING COSTS
Figure 2
COST TO DELIVER A STANDARD UNIT AT FULL-TIME RATES
$50,000
$40,000
$30,000
$20,000
$10,000
$0
10
20
30
40
50
60
70
80
class size
Figure 3
COST TO DELIVER A STANDARD UNIT AT CASUAL RATES
$30,000
$20,000
$10,000
$0
10
20
30
40
50
60
70
80
class size
9
ESTIMATING TEACHING COSTS
Table 7
ANZATS 2009
COST OF A STANDARD UNIT FOR 60 STUDENTS
Item
Course revision
Lecture contact
Lecture preparation
Tutorial first contact
Tutorial subsequent contact
Tutorial preparation for first
Tutorial preparation for rest
Marking
Student enquiries etc
Total
Total Cost per
hours
hour
20
179
26
179
26
179
26
147
26
147
26
147
26
147
60
179
20
147
256
Total Percent
cost of total
3575
9%
4647
11%
9294
22%
1912
5%
3825
9%
3825
9%
1912
5%
8826
21%
3539
9%
41,355
10
ANZATS 2009
ESTIMATING TEACHING COSTS
Figure 4
COST PER STUDENT TO DELIVER A
STANDARD UNIT
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
10
20
30
40
50
60
70
80
Class size
casual rate
full-time rate
distance 3yr cycle
11
ANZATS 2009
ESTIMATING TEACHING COSTS
Figure 5
COST PER STUDENT PER ANNUM (8 UNITS)
$25,000
$20,000
All FT
$15,000
FT 7; C1
FT6: C2
FT5; C3
$10,000
FT4; C4
$5,000
$0
10
20
30
40
50
60
70
80
Class size
12
ESTIMATING TEACHING COSTS
ANZATS 2009
Table 7
STUDENT STAFF RATIOS DERIVED FROM THIS MODEL AND
ASSUMPTIONS
Class size
10
20
30
40
50
60
70
80
Total hours
150
164
177
216
236
256
276
295
1202
1309
1415
1730
1888
2046
2205
2363
Staff
required
0.9
1.0
1.1
1.3
1.5
1.6
1.7
1.8
Student
staff ratio
11
20
28
30
34
38
41
44
Variations
We can now explore some variations around the base model in
addition to class size. The possible variations include:
 Number of contact hours.
 Preparation per contact hour
 Staff salary
 Feedback & student enquiries, current 1.33 per student
 etc
13
ESTIMATING TEACHING COSTS
ANZATS 2009
Initial findings
The following are dependent on the assumptions used
Hours required for a standard unit to a class of 20 – about 170 hours
Staff could teach 8 each year
Assistance required with classes of about 40.
Cost per academic hour
 $170 for a lecturer,
 $140 for a tutor and
 $95 for a casual lecturer
Cost per student falls below $1000 per unit at a class size of 30.
Reasonable economies of scale at about 30 students
Cost structure of theological colleges may be comparable to the
University sector.
Savings in costs by reducing contact hours and lecture preparation
are quite small in the general scheme of things, and are relatively
greater for smaller classes.
14
ESTIMATING TEACHING COSTS
ANZATS 2009
Research
Basic assumptions
 Staff diverted from teaching to research
 Other areas of activity do not change
 Oncosts for research staff are similar
 Research includes supervision and personal research
 Supervision requires 20 – 50 hours per student
 Journal article may require 400 hours work
 Marginal cost for supervision initially low
 Once 200 hours traded for research marginal cost equals
average cost
Each student costs $3500 to nearly $9000
Trading two units of teaching for staff to do research costs over
$60,000
Research training funds for 4 students could cover 2/3rds, possibly
all
15