I assume thta the actual tuition at most colleges/univ is less than the actual cost of the educational services you’re provided since schools have incoming donations, tax breaks, their own income, endowments and what not to reduce the costs. Is this right? Is there a general guess as to what percentage tution would be of the real cost of going to college for a year ?
Well, I work at a private university, and tuition represents about 75% of our yearly income and correspondigly covers about 75% of our expenses.
It depends on whether you’re talking about public or private Institutions. In the public sector taxes pay a large portion of the costs, thus the increased tuition for out-of-state residents. In private institutions, tuition bears a larger share of the expense. There really is not rule of thumb, since it varies greatly from one university to another.
The university I went to was large and received public funding, and tuition was a much smaller fraction of its total revenue – probably between 25% and 33%, and certainly not as much as 45%. Alumni donations and income on investments were major sources of revenue, as was public funding.
Tuition itself was not terribly high and was probably not the major expense for most students. For an on-campus student, very roughly, tuition and incidental fees were probably 33-40% of the total cost, residence fees were probably about 50%, and textbooks were probably about 10% (at least in the early years where textbooks are expensive). For an off-campus student not living with their parents it probably would have been somewhat similar, depending on the cost of their accomodations. For an international student, tuition was over twice as much – maybe even over three times as much – and would have formed a proportionally higher percentage of the total cost.
While student tuitions may cover 33%, 50%, 75% of the operation costs of a school, what percent of the operation costs actually go to education?
I know that some school have large amounts of research. Some have community extension programs. These programs make the school a more rounded institution. They may well draw in well known instructors. But can these costs really be counted as a cost of education?
It’s difficult to define “cost of educating a student”.
While you might be able to rule out non-student-serving programs (we have none) and research (we have none), how do you count
- Athletics?
- Bldg Maintenance and landscaping?
- Student services only used by some students (tutoring and advising)
- Programs that “enhance the student experience”?
At public institutions, tuition pays less than a third of operating costs and usually closer to a quarter. Much of the rest comes from taxes and state and, occasionally, federal grants of various kinds. At private institutions, the number goes up, often substantially. That’s why the cost of a public institution for an out-of-state student–for which the state he or she comes from does not contribute to the institution–is closer to the cost of private institutions, which generally receive no public funding.
It should be noted, however, that both kinds of institutions rely heavily on corporate and private “gifts” from alumni and the like. The Ohio State University, for instance, celebrated reaching the $1 billion mark for endowments from private sources a few years ago. The university renovated and built an addition to its law school with a private gift from an alumnus; the same happened with its business college, for which an adjacent hotel is named for a faculty member who donated several million dollars. So, even public universities traffic in money from non-state sources, which makes one wonder if, for instance, public university hospitals have a competitive advantage over private ones.
Athletic programs at major universities often represent a drain on resources rather than revenue, some studies have shown. Part of the reason is that “big ticket” programs like football and basketball are offset by programs that lose money consistently, such as tennis, track and field, and synchronized swimming. Most of the time, any money raised goes back into the athletic programs rather than the general funding pool, though different universities have different policies. If I remember correctly, the football coach at Ohio State is also the highest paid employee there, with the university president making about a quarter annually what the coach does.
My numbers are old, but ten years ago, in the North Carolina public university system, I think per-person costs ran in the vicinity of $15,000/yr. Tuition was anywhere from $2500 to $5000 depending on which campus you were on.
So… that $15,000/yr cost probably hasn’t done anything but skyrocket.
Education is like real estate.
What you pay for it is based on a variety of factors, and what it cost the seller is only one contributor.
When I was at university, I was told that they made money on the undergrads, and lost it on the graduate students. So a freshman’s tuition (along with government grants) was more than the cost of his/her education, whereas a master’s or doctoral student cost more to educate than s/he brought in, or paid in tuition. Of course, the student/prof ratio is much lower the higher you proceed with your education, so this is probably a contributing factor.
Rule of thumb I heard maybe 30 years ago is that tuition covers about 1/3 of the marginal cost of educating an undergrad student.
There’s a rule of thumb for everything, eh? Just not so accurate in some cases…
Tuition at Swarthmore College this year is $29,782. Nearly all students live on campus, so w/room, board, and student activities fee, that’s $39,408.
Revenues from net student charges account for 41% of the college’s yearly expenditures.
I’m not sure how the room/board/fees fit into all of that. The number that’s thrown around all the time is that it costs the school ~$70k/yr, so I think that the room/board/fees money is ignored.
Thanks for the all the input. Somewhat related followup question: Are there any states that have a reciprocal agreement on public higher education tuitions?
I have heard of such things, but can’t point to specifics. If I recall correctly, though, Kent State University and the University of Cincinnati had agreements along these lines, in part because they are located near the borders of Ohio. You might do a google search to find out if this is the case.
How much of a university’s annual budget has anything to do with students? Much of the physical plant and salaried pay goes to professors who spend the majority of time on research.
Good point. Figuring out how much of a university’s time is spent on education might be tricky, though. A research project is (often) certainly an education benefit to the students. I guess one way to figure it, is to just look at smaller 4 year colleges. They are more likely to have professors with larger teaching loads and fewer research centers, but they are also a smaller chunk of the higer ed universe…which leads to a new question I’ll start seperately.
as aktep and others have said, it’s not always easy to nail down the actual cost of educating a student, so the tuition percentage is similarly hard to nail down. It’s not so hard to give it as a percentage of revenue, of course.
Nametag , your assertion is a little slippery to me. Most of the salary goes to people who spend most of their time on research? Most of the physical plant is dedicated to their research efforts? That seems a little vague to me, especially in a GQ forum.
For one thing, this varies a lot from institution to institution. Faculty at your typical comprehensive land-grant college are less likely to spend lots of time on research. Faculty at a flagship research university, different story. One prominent survey asked how much of their professional time faculty, given their druthers, would like to spend on research (instead of teaching). The average was 42%, at research institutions, but less than 20% at liberal arts colleges and the various classifications of comprehensive baccaluareate institutions.
It also varies across discipline.
I think it’s also flawed to imply that such work has nothing to do with students or education. Research and instruction are coupled. Productive scholars can be good teachers.
South Dakota and Minnesota have (or had, at least, and a change would have been pretty big news) reciprocity for public colleges and universities. As a South Dakota high school graduate, I was able to attend the University of Minnesota-Morris and only had to pay the in-state tuition rate. Minnesotans attending college in South Dakota paid the South Dakota in state tuition rate. this was 1995-1999, it was even better for my sister, who went to Morris in the mid 80’s: She got to pay the South Dakota tuition rate instead of Minnesota, which was a good bit lower.
Also, Wisconsin residents attending college in MN paid a rate about 50% that of MN residents. I understand it had something to do with the tax system in Wisconsin.
Not only that, but much of the “education” occurs outside of the classroom. The typical expectation at public universities is that students will spend twice as much time outside of the classroom on learning activities–reading, studying, doing research at the library or on the Web, internships, and the like–than they do in the classroom.
Unfortunately, higher education is going the route of vocational training today, meaning that students are arriving expecting that classes are designed purely to teach them a limited set of skills that are required in the workplace. Contemplation, synthesis, critical thinking, service learning, and the like are generally viewed as not only a waste of time but as a hindrance to the very process of education.
Of course, many students have always viewed a college degree as nothing more than a ticket to a better-paying job, but now many institutions are feeling pressure to redesign curricula to cater to that sentiment. For instance, at some institutions, curricula are upping the math and science requirements while decreasing language and humanities ones, all in an effort to meet the expectations of business and industry, which want worker bees that are technology-friendly and indoctrinated in an “A+B+C” approach to thinking. Though the reality is that very few people who attend college are likely to pursue scholarship as a career, the goal of producing scholars seems less important today than to appeasing the marketplace.
Obviously it depends highly on the school in question.
Some universities don’t have enough alumni to really cover significant costs, so then tuition would cover more.
Interestingly while State schools have lower tuitions than private schools, and many state schools have been seeing increases in almuni giving and other revenue, a lot of said state schools have programs getting cut and increased tuition rates.
I did some teaching at a State university and one year the money going into the school increased, expenses decreased (because the uni cut certain athletic programs and fired more instructors/staff than they hired) and tuition went up by $1,200. If students actually looked at the Uni’s budget they would probably have been rightly confused.