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2. Factors that may increase facilities needs and costs:

Inflation, as reflected in increased costs.

Additional functions assumed by higher education, e.g., adult education.
Emergence of new areas of study and research.

Accommodation of increased numbers of foreign students.

In considering the possible effects of any of the foregoing innovations in reducing the need for facilities, account must be taken of the delays in communication, the lag in the adoption of new approaches, inevitably associated with human limitations, and the length of time responsible officials will need to give careful considerations to questions of change. They cannot, without abdicating their responsibilities, substitute entirely the experience of others for their own, in matters of capital outlay. Most of these factors, therefore, which now appear as rays of hope on the horizon, are likely to become influential only in the later stages of the projections in question. Factors which may increase facility needs are likewise considered intangible and can be applied only to the longer-range projection. Accordingly, projections have been made for 1965 and 1970.

ESTIMATE OF PHYSICAL FACILITIES COSTS, 1960 THROUGH 1970

The total cost figure (in terms of current cost levels) resulting from the application of the assumptions stated is approximately $18.9 billion by 1970. The following summary shows the cost of physical facilities required for additional students, replacements, and rehabilitation.

Summary of estimated physical facilities costs, 1960 through 1970

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The estimates in the above summary are based on the following computations:

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Graphic presentations derived from these same data are given in chart 1 (page 50) and the top curve in chart 2 (page 51).

CHART Í

ANNUAL NEED FOR PHYSICAL PLANT EXPENDITURES HIGHER EDUCATION, BY FUNCTION, 1960-1970

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III. SOURCES OF FACILITIES FINANCING-PAST AND FUTURE

EXPENDITURES FOR HIGHER EDUCATION FACILITIES IN THE PAST

Expenditures for capital additions by colleges and universities increased rather steadily from 1949 through 1958, except for a slight dip (1952-53) caused by a curtailment of building supplies in the Korean war period. Capital expenditures estimated for 1959 indicate a tapering off from the rate of maximum construction which prevailed in the 3-year period, 1956–58.

In order to provide meaningful comparisons, the 9-year period, 1950-58, of this 11-year period, 1949-59, has been separated into three equal parts to show the sharply increased burden assumed by the colleges and universities in recent years for the provision of physical facilities. Capital expenditures were as follows:

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More than $7.5 billion was spent by colleges and universities for capital additions during the 11 years, 1949-59, at an annual average rate slightly less than $683 million. More was spent during the 3-year period, 1956-58, than in the preceding 6-year period, 1950-55. Expenditures during these 11 years for buildings only were slightly in excess of $5.6 billion.

Over a period of time prior to 1949, colleges and universities spent an average of 75 percent of total capital costs for the construction of buildings and an average of 25 percent for other capital additions such as furniture and equipment, land, landscaping, and campus improvements (utility extensions, walks, roads, and parking areas). For the 11-year period, 1949-59, these other capital items amounted to about 33 percent of the cost of buildings. It is believed that the upward trend in these costs will continue and, as noted in the assumptions, will approximate 50 percent of the total cost of future construction.

SOURCES OF FINACING USED IN THE PAST

Probably no other social institution receives funds from so large a variety of sources as does higher education. The construction of residential buildings during the 9-year period, 1951-59, of this 11-year period and the construction of auxiliary buildings during the 4-year period, 1956-59, was significantly enhanced by the college housing loan program. Up to December 31, 1959, 954 loans totaling about $936 million had been approved for residential and auxiliary facilities; bonds awarded to the Federal Government as of that date totaled $730,111,000. Since 1957 about $1 out of every $4 expended by colleges and universities for the construction of buildings has been obtained from the Federal Government under the college housing loan program.

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The portion of the Office of Education's college and university facilities survey that dealt with sources of funds for the construction of buildings during 1951-55 showed that governmental appropriations provided the principle source of funds for the construction of instructional, research, and general buildings. The primary source for residential and auxiliary facilities was revenue bonds. In both instances, gifts and grants were the principal secondary source. though sources of funds for capital additions, other than buildings, were not gathered in obtaining the data, it is assumed that the principal sources would be governmental appropriations of the revenue bonds, depending on whether the funds were to be used for instructional or residential purposes, and that gifts and grants would be the primary secondary source. Funds obtained from the Housing and Home Finance Agency under the provisions of the college housing loan program were not available for other capital purposes.

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