Higher Education Finance

Overview

Higher Education Finance

Higher education is not just big business: It is huge business. If you add up all the revenues colleges get – tuition, government subsidies, ancillary operations, etc. – higher education took in nearly $500 billion in 2009-10, according to data from the U.S. Department of Education. But despite the magnitude of money that flows into colleges and universities, these institutions have faced considerable financial pressure in recent years as states have cut funding for higher education.

Higher education is not just big business: It is huge business. If you add up all the revenues colleges get – tuition, government subsidies, ancillary operations, etc. – higher education took in nearly $500 billion in 2009-10, according to data from the U.S. Department of Education. But despite the magnitude of money that flows into colleges and universities, these institutions have faced considerable financial pressure in recent years as states have cut funding for higher education.

This budget crunch has hit precisely when there is more pressure from students and families to make college more affordable, more pressure from employers and policymakers to produce more people who have degrees, and more pressure from critics who want colleges to do a better job of actually educating students. These elements combine to make the financial side of higher education fertile ground for a variety of stories. This Topics section examines how to assess how colleges earn and spend money, and how those practices might affect students.

Where Do Colleges Get Their Money?  

Colleges get their money from four main sources:

  1. Tuition and fees: Nearly every college gets at least some money from students. (Some schools call tuition “fees.”) The exceptions are the handful of tuition-free schools such as Cooper Union. Students paid more than $134 billion in tuition and fees in 2009-10, according to IPEDs data.  When looking at individual schools, remember to distinguish between sticker prices for tuition and net prices – what students actually pay after scholarships and other discounts. Ask colleges about their “net tuition revenue.” Private colleges, for example, have been raising sticker prices steadily but also giving out so much financial aid that they actually have been only eking out very small increases in their net tuition revenue. That said, many colleges have stated that one of their institutional goals is the “maximize net tuition revenue.”
  2. Taxpayers: Virtually every school receives taxpayer money in one form or another:

    a) Public colleges and universities receive direct cash subsidies from their states and communities. The federal government handed out more than $32 billion in grants to colleges in 2009-10, according to the IPEDS data. Grapevine’s research shows that states spent $72.5 billion supporting public colleges and universities in the 2012 fiscal year. That’s down from $75 billion in the 2011 fiscal year. That decline in state funding has been a major reason for tuition increases.

    b) Private nonprofit colleges receive tax subsidies in the form of tax breaks for their donors and their tax-exempt status. (Public and nonprofit colleges do not have to pay local property taxes, for example, which has been a subject of controversy in many budget-strapped cities because the colleges make use of public services that the other taxpayers fund.) In addition, the majority of private college students pay at least some of their tuition bills with federal or state grant or loan dollars that are funded by taxpayers. Finally, private universities with professors who get government research grants get to keep a hefty percentage of the research grant for overhead. It is not unusual for a college to require a professor to give more than 50 percent of the grant to the administration for overhead. (One potential source for information on overhead is the National Council of University Research Administrators.)

    c) For-profit colleges receive almost all of their money from taxpayers, one way or the other. The vast majority of students at the University of Phoenix, DeVry, etc., pay their tuition bills with federal Pell grants, federal student loans, state grants and GI bill money. These schools are so reliant on government funding, in fact, that they have fought a proposal to close a loophole that excludes GI bill money from a federal regulation that requires colleges to get at least 10 percent of their revenues from a non-federal source (i.e., the students’ own pockets.) If the GI bill was counted toward this “90/10” rule (i.e. no more than 90 percent of the college’s revenue can come from taxpayers) many colleges would be in violation. The proposed revision had not been enacted as of this publication in June 2012.
  3. Donors: All colleges love donations, but most colleges get so little that it doesn’t make much of an impact on their budget. A few hundred famous and elite colleges, however, have raised so much money that they have built up big endowments. For schools like Harvard and Yale, taking a standard 5 percent or so from their endowment funds a large percentage of their operating expenses. The National Association of College and University Business Officers regularly issues reports on these endowments, and the Council for Advancement and Support of Education is an organization of college fundraisers.
  4. Ancillary services: A growing number of colleges are turning standard services, such as dorms and parking lots, into money-makers for the college, or launching new money-making enterprises. The variety of these operations is extensive. While not every college turns every ancillary service into a profit center, here are some examples of what is typically done:

    a) Licensing: Colleges earn extra money by licensing their logos and names for T-shirts, sweatshirts, etc.

    b) Campus services: The administration often takes a percentage of the profit from campus bookstores, cafeterias, housing departments, parking lots, etc. General sources for information on this include the Association of College and University Housing Officers – International and the National Association of College Stores.

    c)  Banking: Some colleges have signed deals with banks to share in the fees charged by cash cards issued by the financial aid office, for example.

    d) Patents: Some colleges demand shares in professors’ inventions or businesses. Here’s a story about one dispute over this that made it to the Supreme Court:

    e) Sports: According to the NCAA, a few dozen colleges actually make money on the ticket sales and other revenues from their sports teams.

Where Does Colleges’ Money Go?

There are four major activities that account for the bulk of a college’s expenses:

  1. Education, a.k.a. Instruction: Only about 27 percent of a public college’s total budget is spent on the cost of putting teachers in classroom, according to the Department of Education. (Expenditure breakdowns for public colleges can be found here and expenditures for private colleges can be found here.) These costs have been rising slower than other college budget lines in part because colleges have been replacing tenured professors with low-paid adjuncts, according to research from the Delta Cost Project.
  2. Administration, building maintenance, etc. typically eat up another 15 percent of a college’s spending. Delta’s analysis indicates these costs have been rising sharply.
  3. Student and academic support (such as counseling, libraries, and financial aid offices) typically account for another 12 percent of universities’ budgets. But these services account for about 17 percent of costs at private universities and have been growing quickly.
  4. Research, public service and similar activities average about 13 percent of college budgets.

What Are We Getting For This Money?

As the costs to earn a college degree have risen in recent years, more experts and policymakers have been investigating what those degrees actually are worth to individuals and the nation. For degree holders, the value of a college credential generally – though not universally – has been found to be high, according to research from the Georgetown Center on Education and the Workforce, Payscale.com earnings data, and the College Board’s Education Pays reports. As a nation, better-educated populations have been connected to stronger economic growth, and many colleges argue that they are incubators for economic growth.

But as detailed earlier, educating college students has been an expensive enterprise, and the economic climate has squeezed many universities’ budgets. Thus, many of the questions currently central to higher education finance focus how the budget crunches many colleges are facing have affected student access. Community colleges say budget cuts are forcing them to turn students away in some cases. Many public universities say budget cuts are forcing them to reduce the number of in-state students and admit more higher-paying out-of-state students. At least one private college has confirmed that financial concerns have forced it to take students’ wealth into admissions consideration.

Many experts also have started to question the effect that the finances of colleges and universities might be have on the quality of the education they provide. Budget cuts have caused some colleges to pack more students into each classroom, which many studies say reduces learning. Colleges also have replaced tenured professors with less expensive adjuncts, which can affect the quality of teaching. — Kim Clark, June 2012

Key Coverage

Highlighted journalism and reports for this topic

  • Obama’s Budget Proposal Would Change Student Loan Interest Rates, Boost Science Spending

    April 11, 2013

    In his annual budget request on Wednesday, President Obama proposed a major change to student loan interest rates that would save students money in the short term but eventually make loans more costly for borrowers. (Inside Higher Ed)

    Read More »
  • Student Loan Rate Set to Rise, Despite Lack of Support

    April 8, 2013

    The interest rate on many student loans is scheduled to double on July 1, to 6.8 percent from 3.4 percent — just as it was last year, when in the midst of an election campaign, Congress voted to extend the lower rate. (The New York Times)

    Read More »
  • A Truly Devastating Graph on State Higher Education Spending

    March 20, 2013

    A chart from the Center On Budget and Policy Priorities estimates how much each of the 50 states has slashed per-student funding for its university systems since the start of the recession, adjusted for inflation. (The Atlantic)

    Read More »
  • What’s the Payoff for the ‘Country Club’ College?

    January 28, 2013

    A new paper published by the National Bureau of Economic Research analyzes the “college as country club” and the pressure on institutions to cater to students’ desire for “consumption amenities.” (Chronicle of Higher Education)

    Read More »
  • State Spending on Higher Education Rebounds in Most States After Years of Decline

    January 21, 2013

    After falling nearly 11 percent since the 2008 fiscal year, state appropriations for higher education are on the rise in most states. But the long-term effects of budget cuts stemming from the economic downturn still could take years to erase, according to an annual survey.

    Read More »
  • For Poor, Leap to College Often Ends in a Hard Fall

    December 22, 2012

    The growing role of class in academic success has taken experts by surprise since it follows decades of equal opportunity efforts and counters racial trends, where differences have narrowed. It adds to fears over recent evidence suggesting that low-income Americans have lower chances of upward mobility than counterparts in Canada and Western Europe.

    Thirty years ago, there was a 31 percentage point difference between the share of prosperous and poor Americans who earned bachelor’s degrees, according to Martha J. Bailey and Susan M. Dynarski of the University of Michigan. Now the gap is 45 points. (The New York Times) 

    Read More »
  • 13th Grade: Older, Returning Students Strain Florida’s Community and State Colleges

    December 17, 2012

    There are a lot of people in Florida going through what Pepper Harth is going through. Remedial classes in math, reading and writing are seeing a surge of students at Florida’s 28 community and state colleges — schools where all students are welcome as long as they have a high school diploma or G.E.D. From 2004 to 2011, Florida’s remedial education costs for both students and schools ballooned from $118 million to $168 million. (State Impact Florida) 

    Read More »
  • Student-Loan Delinquencies Now Surpass Credit Cards

    November 27, 2012

    Of the $956 billion in student-loan debt outstanding as of September, 11 percent was delinquent — up from less than 9 percent in the second quarter, and higher than the 10.5 percent of credit-card debt, which was delinquent in the third quarter. By comparison, delinquency rates on mortgages, home-equity lines of credit and auto loans stood at 5.9 percent, 4.9 percent, and 4.3 percent respectively as of September. (CNBC) 

    Read More »
  • More Community College Students Commuting to Multiple Campuses

    October 16, 2012

    She is part of a growing number of community college students statewide who have been forced to travel long distances by bus, car and train to get the classes they need after budget cuts resulted in course reductions systemwide.(Los Angeles Times) 

    Read More »
  • No Income? No Problem! How the Gov’t Is Saddling Parents with College Loans They Can’t Afford

    October 4, 2012

    A joint examination by ProPublica and The Chronicle of Higher Education has found that Plus loans can sometimes hurt the very families they are intended to help: The loans are both remarkably easy to get and nearly impossible to get out from under for families who’ve overreached. When a parent applies for a Plus loan, the government checks credit history, but it doesn’t assess whether the borrower has the ability to repay the loan. It doesn’t check income. It doesn’t check employment status. It doesn’t check how much other debt — like a mortgage, or other student-loan debt — the borrower is already on the hook for. (ProPublica and The Chronicle of Higher Education) 

    Read More »
  • Too High a Price?

    October 1, 2012

    Grinnell’s discussions follow closely on the heels of an announcement this summer by Wesleyan University that it was moving away from need-blind admissions, saying that if the college could not generate enough money to cover financial aid, it would consider students’ financial need in some of its decisions (possibly 10 percent of the class). The move has generated backlash among students, alumni and others at the university. Grinnell administrators said a policy like Wesleyan’s is on the table.

     

    Read More »
  • A Disruption Grows Up?

    October 1, 2012

    Competency-based education could be a game-changer for adult students, probably more so than MOOCs. Yet despite the backing of powerful supporters, colleges have been reluctant to go all-in because they are unsure whether accreditors and the federal government will give the nod to degree programs that look nothing like the traditional college model.

    The logjam may be breaking, however. Southern New Hampshire University is poised to launch a $5,000 online, competency-based associate degree that would be the first to blow up the credit hour — the connection between college credit and the time students spend learning. A regional accreditor has signed off on Southern New Hampshire’s “direct assessment” method, and the university will soon apply for federal approval. (Inside Higher Ed) 

     

     

    Read More »
  • Democratic Party Platform Highlights Obama Higher Education, Student Loan Reforms

    September 5, 2012

    The party platform promotes the reform of the federal student loan program, the increased funding to Pell Grants and the new income based repayment option for federal loans. It’s a stark contrast to the Republican platform, which called for a roll back of the student loan reform to funnel money back through private banks. (The Huffington Post)

    Read More »
  • Obama, GOP duel over rising college expenses

    September 1, 2012

    WASHINGTON – President Obama would make tax credits for college expenses permanent and expand Pell grants for students from lower-earning families. The Republican team of Mitt Romney and Paul Ryan would emphasize the need to curb rising tuitions and federal education spending that are burdening families and the government. (USA Today)

    Read More »
  • Parking Pros: UT Far Exceeds City in Tickets Issued, Revenue Returned

    August 19, 2012

    Each year, UT’s parking department issues twice as many tickets as the city where it is, and it compels nine out of 10 violators to pay the fine. That adds up to about $1.2 million in revenue each year.

    University parking data examined by the News Sentinel reveals those details and other glimpses into the habits of thousands of campus drivers and the sweeping organization keeping them in check.

    What time of day are drivers most likely to get a ticket? Watch where you park between 10 and 11 in the morning.

    Where? Don’t be tempted by that inviting staff lot next to the stadium.

    And what about the month, the weather and the days of the week? (Knoxville News Sentinel)

    Read More »
  • Teacher’s Wages Garnished as U.S. Goes After Loan Default

    July 2, 2012

    Lawyers drained Linda Brice’s bank account and seized a quarter of her take-home pay, or more than $900 a month. Brice, a first-grade teacher and Coast Guard veteran, begged for mercy, saying she couldn’t afford food, gas or utilities.

    Brice’s transgression: she defaulted on $3,100 she had borrowed more than 30 years ago to pay for college. The chief federal judge in Los Angeles took her side, ruling that Brice should pay only $25 a month. The law firm of Goldsmith & Hull — representing the federal government — then withdrew $2,496 from her bank account. (Bloomberg News) 

    Read More »
  • Budget Disparity Growing Among NCAA Division 1 Schools

    May 15, 2012

    While most higher education reporters tend to steer clear of the sports side of universities, there can be compelling finance stories in this part of campus life. “Major-college athletics departments increased the amount of money they generate by nearly $190 million in 2011, but they increased their spending by more than $267 million,” this article reports. So, how do colleges cover that difference in costs? (USA Today)

    Read More »
  • Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans

    May 15, 2012

    How’s this for a startling opening sentence: “Joshua Mandelman made $454,000 in a single year as a student-loan debt collector — more than twice the pay of the U.S. secretary of education.” The article offers a revealing look at “guaranty agencies,” a little-covered part of the higher education beat that can contribute significantly to costs. (Bloomberg)

    Read More »
  • Football Fails Profit Test as Students Pay $1,000

    May 3, 2012

    Rutgers adds $1,000 in fees to student bills to cover costs of football program. “Rutgers funneled $28.5 million from the university budget and student fees into sports, the most among 54 U.S. public universities in the biggest football conferences, based on data compiled by Bloomberg.” The site also posts the list for these schools. (Bloomberg)

    Read More »
  • Out of Uniform: At Half a Million and Counting, Veterans Cash In on Post-9/11 GI Bill

    March 8, 2012

    At this moment, a new migration is under way from the military to the college campus. More than half a million veterans who served after September 11, 2001, were enrolled in college classes last year under the Post-9/11 GI Bill. Thousands more are expected in the coming years as roughly two million veterans of Iraq and Afghanistan return home. Though their passage through the college gates might not have the same sweeping effect it did on the post-World War II generation, optimism is running strong that the successful transition of today’s veterans to higher education—and gainful employment beyond—might be a balm for a nation nervous about its economic future. (CHE) 

    Read More »
  • Federal Regulations Are Not Making College More Expensive

    February 15, 2012

    Higher education expert Kevin Carey attempts to debunk a belief often touted by policymakers, administrators and critics. He concludes that “The worst thing about this whole conversation is that that there’s a much stronger argument to be made that rising college prices are a function of too little federal regulation, not too much.”  (The Chronicle of Higher Education)

    Read More »
  • Executive Compensation at Private Colleges

    December 5, 2011

    Each year, The Chronicle of Higher Education publishes lists based on its analyses of how much the presidents of public and private colleges are paid. The list for public colleges also is accessible through this link. (The Chronicle of Higher Education)

    Read More »
  • 180 Private Colleges Fail Education Dept.’s Latest Financial Responsibility Test

    October 12, 2011

    Every couple of years, the federal government issues an analysis of the financial strength of colleges. “Financial-responsibility scores, which are derived from the audited financial statements that colleges submit annually to the department, are supposed to offer a broad measure of colleges’ financial health. By placing restrictions on failing programs, the department seeks to protect students and taxpayers from colleges at risk of financial collapse.” (The Chronicle of Higher Education)

    Read More »
  • Maintenance Over Management: A Survey of Business Officers

    June 6, 2011

    This survey of important campus administrators including business officers and admissions officers reveals some interesting trends. “[A]bout 60 percent of all respondents to the survey disagreed or strongly disagreed that “my institution can make additional and significant budget cuts without hurting quality.” (Inside Higher Ed)

    Read More »
  • Lost in Translation

    May 23, 2011

    EWA 2012 National Reporting Contest winner. Unscrupulous Chinese firms promise families and college- bound students from the mainland admission to prestigious American universities provided they pay large fees. What they get in return varies, with worst-case scenarios including living miles from the U.S. campus and thousands of dollars of unforeseen bills. Yet because of U.S. colleges’ appetite for the tuition foreign students pay, fixing the problem isn’t easy. (Bloomberg News)

    Read More »
  • Many For-Profit Colleges Are ‘Managing Defaults’ to Mask Problems, Analysis Indicates

    March 13, 2011

    “The 3-year default rates on student loans are 5 times as high as the 2-years rates at some colleges,” according to this research. (The Chronicle of Higher Education)

    Read More »
  • The Business of Higher Education

    February 11, 2011

    EWA 2012 National Reporting Contest winner. The relationships between pharmaceutical companies and academe, the aggressive enrollment tactics at for-profit schools, and applied science competitions to beef up New York City’s tech prowess are just some of the topics covered in this multi-article series on the apparent and hidden costs of running a university.  (The Chronicle of Higher Education)

    Read More »
  • The Best Class Money Can Buy

    November 2005

    “Over the past twenty years, often under cover of the euphemisms with which the industry abounds, enrollment management has transformed admissions and financial aid, and in some cases the entire mission of a college or a university,” notes this classic analysis of a key part of the business of universities. “Borrowing the most sophisticated techniques of business strategy, enrollment managers have installed market-driven competition at the heart of the university.” (The Atlantic)

    Read More »

Reports & Data

Notable research on this topic

  • Federal Student Loan Debt Burden of Noncompleters

    April 9, 2013

    This report focuses on the median federal student debt burden accrued by students who do not complete a postsecondary credential within 6 years of enrolling. (National Center for Education Statistics)

    Read More »
  • State Higher Education Finance 2012

    March 6, 2013

    State and local government financial commitment to higher education has increased substantially over the past twenty-five years. In 1987, state and local governments combined provided $33.3 billion in direct support for general operating expenses of public and independent higher education institutions. This investment increased to $50.3 billion in 1997, $82.7 billion in 2007, and $88.8 billion by 2008 (the high point in national aggregate funding). A recession beginning in 2008 dramatically reduced state revenue and ended the growth in state and local support
    achieved between 2004 and 2008. (SHEEO)

    Read More »
  • Student Debt and the Class of 2011

    October 18, 2012

    We estimate that two-thirds (66%) of college seniors who graduated in 2011 had student loan debt, with an average of $26,600 for those with loans. The five percent increase in average debt at the national level is similar to the average annual increase over the past few years. Also similar to previous years, about one-fifth of graduates’ debt is comprised of private loans. (The Institute for College Access & Success)

    Read More »
  • Debt, Jobs, Diversity and Who Gets In: A Survey of Admissions Directors

    October 3, 2012

    At a time of increasing national concern about debt levels of college students, a plurality of college admissions directors in a new survey by Inside Higher Ed indicated that current average loan volume for undergraduates is reasonable — and 22 percent of all admissions directors and 28 percent of those at private colleges would be comfortable with the average student debt being even higher than it is now. (Inside Higher Ed) 

     

     

    Read More »
  • National Center for Higher Education Management Systems

    Ongoing

    NCHEMS (pronounced “ennchems”) posts state-by-state numbers for revenues, cost per degree, etc.

    Read More »
  • International Comparative Higher Education and Finance Project

    Ongoing

    Through this data project, University of Buffalo researchers are documenting the global shift of the financial burden for college from taxpayers to students.

    Read More »
  • Grapevine

    Ongoing

    Illinois State University and the State Higher Education Executive Officers jointly produce this compilation of state taxpayer support (i.e. subsidies or revenues) for educational systems.

    Read More »
  • National Association of College and University Business Officers

    Annual

    NACUBO publishes an annual survey of that year’s estimated “discount” on sticker price by private colleges that allows you to estimate net prices that families actually pay out of pocket. In conjunction with the Common Fund, NACUBO also publishes an annual estimate of the gain and level of every college’s endowment.

    Read More »
  • Trends in Pricing

    Annual

    The yearly report from the College Board, usually issued each October, is considered one of the most up-to-date summaries of average college net and sticker prices. Be aware, however, that there seems to be a disconnect between the net price numbers and trends published by the federal government and the numbers and trends published by the College Board. So be sure to check both because they sometimes diverge and will lead to opposite conclusions.

    Read More »
  • USA Today Sports’ College Athletics Finances

    Ongoing

    USA Today posts a compilation of NCAA Division 1 college sports budgets for public universities.

    Read More »
  • Executive Compensation

    Ongoing

    The Chronicle of Higher Education collects and publishes data on the compensation of private college presidents and public college presidents. Access to these databases does require a subscription to the site.

    Read More »
  • Guidestar

    Ongoing

    Guidestar offers a free, online repository of all nonprofit institutions’ (including private, non-profit colleges’) tax forms, including the often informative 990, which includes executive compensation, spending on fundraising, grants to non-citizens and other interesting data. The site offers access for free, but registration is required.

    Read More »
  • Delta Cost Project

    Ongoing

    The Delta Cost Project at the American Institutes for Research has become of the main go-to sources for data on how colleges spend their money.

    Read More »
  • National Center for Education Statistics

    Ongoing

    U.S. Department of Education’s National Center for Education Statistics (NCES) is considered the definitive source of education statistics. The Integrated Postsecondary Education Data System, or IPEDS allows you to, for example, discover and compare what colleges spend on instructors administration, research, financial aid, or find the trend data for one particular college. IPEDS also enables you to, for example, compare all colleges’ sticker prices, say, or find the trend data for one particular college.

    For more specific data on financial aid, check the National Postsecondary Student Aid Study, which is a definitive quadrennial study of financial aid trends. The last year studied was 2011-12, but that data was unavailable as of spring 2012.

    The NCES Navigator allows you to quickly and easily look at most of the most important price numbers for a specified college – sticker price and net prices for various income levels over the last several years.

    And Chapter 3 of the Digest of Education Statistics has most of the most important general statistics on price and aid.

    Read More »

Five Questions to Ask

  1. What are you defining as costs and expenses? Make sure you get your editor and your sources to define exactly what they mean when they talk about college “costs” or “expenses.” While some people use the word “cost” to mean the price students pay, others mean the amount the college actually spends on each student, which is often much higher than tuition. (Yale says their cost of educating a student is double tuition, for example.) Colleges quote many different “costs.” For example, cost of instruction is typically lower than a college’s total expenditures, which includes other expenses such as counseling, sports, and research.
  2. What do you mean by price? Make sure you get your editor and your sources to define exactly what they mean when they talk about a college’s “price.” Each college has at least 2 kinds of prices: “sticker” (i.e. published) price, and “net” price, or the price a student pays after grants and scholarships (not loans or work-study) are subtracted. Only about half of all college students pay full sticker price. And the National Association of College and University Business Officers says less than 20 percent of private college students pay those schools’ sticker prices.

    Make sure you know the components of whatever price you use. Some people think price is just tuition, or just tuition and fees, or just “direct costs,” which are generally viewed as tuition, fees, room and board. Some schools quote an “out-of-pocket” price, which is s sticker price minus grants and loans.

    If you want to quote total cost, and you’re having trouble finding it, remind the schools that federal law requires colleges to “make readily available to current and prospective students” a full cost of attendance that includes tuition, fees, room, board, books, travel and a budget for miscellaneous items. (See 34 CFR 668.43.  Unfortunately, the law does not say when, where or how…) If you’re writing a student loan story, try to include an Annual Percentage Rate, not just the interest rate. All consumer loans – except for federal educational loans – are required to add fees and interest rates together to give consumers their true costs. If you’re writing about PLUS loans, use a web APR calculator to add in the 4 percentage point fees to let students and parents know how much that loan is really going to cost them.
  3. Price for whom? Most public research universities (though very few private colleges) now charge “differential tuition” or extra fees for some courses, so that some students pay more than the standard published tuition. (See research by Glen Nelson, currently senior vice president of finance and administration for the Arizona Board of Regents.) At Penn State, for example, upperclassmen pay a higher tuition rate. Many other colleges charge higher tuition for science classes. Some even add extra fees to journalism courses!
  4. Compared to what? You can add more value to your readers if you put higher ed finance information into context. The College Board’s “Trends in Pricing” reports, for example, generally give you the option of looking at prices after subtracting inflation out. “Measuring Up” analyses, for example, very helpfully rate each state’s average public university in-state tuition as a percentage of that state’s median income, which give a good gauge of affordability. News stories about student debt load would be improved by putting debt payments into context. This op-ed by Mark Kantrowitz and Lynn O’Shaughnessy noted that the spring 2012 debate over a possible increase in the Stafford loan interest rates would amount to about $6/month per student. (And it also put the debate into a larger context of budget cuts to financial aid.)
  5. Is that an expense or an investment? As college costs and prices rise, more colleges and economists are focusing on what students and taxpayers are getting for their money. Many colleges have issued reports showing how their activities – such as sports events or research – pay off in the long run because they generate economic development and tax revenues. The Delta Project calculates a cost per graduate for colleges  Collegemeasures.com has looked at the costs and payoffs for degrees at community colleges. Payscale.com publishes its estimate of the return on investment for several hundred colleges. Georgetown University’s Center on Education and the Workforce has recently published analyses showing which degrees return higher incomes to graduates.http://advocacy.collegeboard.org/

Organizations

The Association of College and University Housing Officers – International is the professional organization for employees who manage dormitories and other housing options for colleges. ACUHO-I can be a helpful source for information on the ways colleges might use housing to increase their revenues.

The College Board publishes annual reports on college tuition pricing and student financial aid that are essential resources for reporters writing articles that deal with the business side of colleges and universities.

The Council for Advancement and Support of Education (CASE) is the leading professional organization for those who specialize in helping colleges raise funds through donations.

The Delta Cost Project is a research organization that examines how colleges and universities collect and spend the revenues upon which they depend. Their research can be critical to most articles that deal with the financial aspects of colleges.

The National Association of College and University Business Officers is the primary professional organization for those higher education administrators who deal the financial aspects of operating a college. NACUBO produces a number of reports each year that can be helpful to reporters.

The National Association of College Stores can be useful on questions of whether campus bookstores generate profits for universities and other ways these businesses affect a college.

The National Council of University Research Administrators deals with the financial side of how colleges and universities manage the research grants that can be a critical component of the institution’s revenue.

The State Higher Education Executive Officers organization surveys its members on a regular basis regarding various financial trends in higher education. These SHEEO reports can be the foundation for a variety of higher ed finance stories.

Suggest a Change

If you’d like to suggest an addition or change to this section, send an email to EWA Project Director Kenneth Terrell.

Key Coverage

Budget Disparity Growing Among NCAA Division 1 Schools

While most higher education reporters tend to steer clear of the sports side of universities, there can be compelling finance stories in this part of campus life. “Major-college athletics departments increased the amount of money they generate by nearly $190 million in 2011, but they increased their spending by more than $267 million,” this article reports. So, how do colleges cover that difference in costs? 

Key Coverage

Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans

How’s this for a startling opening sentence: “Joshua Mandelman made $454,000 in a single year as a student-loan debt collector — more than twice the pay of the U.S. secretary of education.” The article offers a revealing look at “guaranty agencies,” a little-covered part of the higher education beat that can contribute significantly to costs. 

Key Coverage

Football Fails Profit Test as Students Pay $1,000

Rutgers adds $1,000 in fees to student bills to cover costs of football program. “Rutgers funneled $28.5 million from the university budget and student fees into sports, the most among 54 U.S. public universities in the biggest football conferences, based on data compiled by Bloomberg.” The site also posts the list for these schools. 

Key Coverage

Federal Regulations Are Not Making College More Expensive

Higher education expert Kevin Carey attempts to debunk a belief often touted by policymakers, administrators and critics. He concludes that “The worst thing about this whole conversation is that that there’s a much stronger argument to be made that rising college prices are a function of too little federal regulation, not too much.”  

Key Coverage

Executive Compensation at Private Colleges

Each year, The Chronicle of Higher Education publishes lists based on its analyses of how much the presidents of public and private colleges are paid. The list for public colleges also is accessible through this link. 

Key Coverage

180 Private Colleges Fail Education Dept.’s Latest Financial Responsibility Test

Every couple of years, the federal government issues an analysis of the financial strength of colleges. “Financial-responsibility scores, which are derived from the audited financial statements that colleges submit annually to the department, are supposed to offer a broad measure of colleges’ financial health. By placing restrictions on failing programs, the department seeks to protect students and taxpayers from colleges at risk of financial collapse.” 

Key Coverage

Maintenance Over Management: A Survey of Business Officers

This survey of important campus administrators including business officers and admissions officers reveals some interesting trends. “[A]bout 60 percent of all respondents to the survey disagreed or strongly disagreed that “my institution can make additional and significant budget cuts without hurting quality.” 

Key Coverage

Lost in Translation

EWA 2012 National Reporting Contest winner. Unscrupulous Chinese firms promise families and college- bound students from the mainland admission to prestigious American universities provided they pay large fees. What they get in return varies, with worst-case scenarios including living miles from the U.S. campus and thousands of dollars of unforeseen bills. Yet because of U.S. colleges’ appetite for the tuition foreign students pay, fixing the problem isn’t easy.

Key Coverage

The Business of Higher Education

EWA 2012 National Reporting Contest winner. The relationships between pharmaceutical companies and academe, the aggressive enrollment tactics at for-profit schools, and applied science competitions to beef up New York City’s tech prowess are just some of the topics covered in this multi-article series on the apparent and hidden costs of running a university.  

Key Coverage

The Best Class Money Can Buy

“Over the past twenty years, often under cover of the euphemisms with which the industry abounds, enrollment management has transformed admissions and financial aid, and in some cases the entire mission of a college or a university,” notes this classic analysis of a key part of the business of universities. “Borrowing the most sophisticated techniques of business strategy, enrollment managers have installed market-driven competition at the heart of the university.”