October 27, 2009

Tuition is a Fraction of Public College Revenue

When I went to college it was pretty clear to me at the time that student tuition wasn't a big factor at the school. I went to a large public university with an emphasis on research. The school got most of its funding from research grants and state tax support. Tuition was a small portion of their income. This is the case at most universities in the USA. Tuition from students is a fraction of the revenue at colleges.

This relatively old study from the Dept. of Education cites tuition contributing only about 23% of revenue for public research/doctoral universities as of 1998.

Lets look at an example. The University of California is a very large university system in California made up of UC Berkeley, UCLA and several other campuses. The UC system publishes their budget online. Digging into the details we can see that tuition is only about 10% of their revenue. The break down of revenue sources for UC are shown below:

Grants, medical center and state support are the largest sources of revenue for the UC schools.

Of course every university is a bit different so they will have a larger or smaller portion of their revenue coming from student tuition. But its a safe bet for most public universities out there get a majority of their funding from sources other than tuition.

Private schools tend to get a much higher percentage of their revenue from tuition. However for private schools the funding mix may vary more. The Dept. of Education study from 1998 shows that tuition is 49% of revenue for private doctoral/research universities. Larger schools may get substantially more of their revenue from grants, gifts or through funds generated by their endowment. Stanford's budget shows that they get about 17% of their income from tuition which is less than most private schools.

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