How Does Your College Actually Spend Your College Tuition?

 

How Does Your College Actually Spend Your College Tuition

College tuition is nothing if not a hot topic right now. One of the best things you can learn about when you’re trying to become more informed about college tuition is the ins and outs of how the tuition process works. If you don’t know much about it, you’re more likely to have a hard time talking about it. Here’s everything you’ve ever wanted to know about what your college tuition actually pays for.

1. Breaking Down $100 of Tuition

The bare-bones information about how your college spends the tuition you pay has to do with a variety of information. When you pay $100 of tuition, where does it go?

The first chunk of the tuition goes toward purely academic interests. On average, $61.46 of that $100 goes to the costs of your education directly. A university will typically split it up like this:

What Does Your College Tuition Actually Pay For

       $15.81 – Salaries

       $11.47 – General Instruction Expenses

       $9.61 – Auxiliary Student Enterprises

       $8.26 – Academic Support

       $8.15 – Institutional Support

       $4.75 – Student Services

       $3.41 – Grants and Financial Aid

What about the rest? That goes to everything else that universities and colleges invest in. On average, here’s where the other $38.54 goes.

       $15.58 – Hospitals and Healthcare

       $11.66 – Research

       $6.25 – Other, Including Taxes and Liabilities

       $4.52 – Public Services

       $0.53 – Independent Operations

Some of these things, including hospitals and research, can be extremely important for a student’s success opportunities. However, because they’re not directly associated with student education in the classroom, they’re still considered part of the “non-academic” block of spending.

2. Public Versus Private

Another major difference in college tuition stems from the difference between public and private colleges. What is the difference? It depends on who you ask, but one major difference is in cost.

To see a more understandable metric of expense, you might want to look at the cost of a year of schooling, including fees, tuition, and room and board, in the 2019/2020 school year. According to the College Board, this averaged $21,950 for a student attending an in-state public school and a whopping $49,870 for a student attending a private school.

3. Tuition as a Percentage of Public School Revenue

Did you know that tuition rarely if ever makes up enough of a college’s income base to provide the entirety of the school’s income? Most of the time, schools have to use either government grants, as public schools typically do, or endowments, as private schools do, to cover their operating costs every year. It’s exceedingly rare to be able to cover all of a college’s costs with tuition.

However, the percentage of operating costs that tuition covers can still be interesting to look at. This is especially true because in 2000, this percentage was 29.2% on average. However, in 2018, after more than a 25% cumulative increase in tuition, it now makes up 46.6% on average. That means it moved from being not even one third to being nearly one half.

Conclusion

Tuition is a complicated topic for sure. It’s important that you consider a variety of concepts when you think about how you may be able to manage your tuition needs. Whether you’re having academic talks about tuition or you just want to know more when you talk to your friends about it, more information is always an important element of the tuition process.

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