College Finance & Operations

America spends nearly $700 billion a year on higher education, including paying instructors, funding research, keeping the facilities running and much more. At public universities, the biggest chunk of this comes from taxpayers, who deserve accountability for their money. So do students and their families, who fork over tuition and fees, and a fast-growing additional amount for room and board. At private, nonprofit institutions, the proportions are reversed, with more money coming from students than from taxpayers. Endowment investment returns are another important funding source for higher education institutions.

For context, government spending on higher education exceeds federal subsidies to any other industry, including fossil fuel and farming. On top of that, higher education institutions collectively owe a quarter of a trillion dollars’ worth of debt and have been borrowing more than $40 billion a year more.

These are big, big numbers. To show their impact, keep in mind that American families are increasingly struggling to afford tuition and fees that rose 25 percent faster than inflation in the last decade.

This makes investigating how colleges and universities spend this money one of the most important watchdog tasks for any education reporter. Readers, viewers and listeners want to know: Why do these costs keep rising so much faster than median family incomes? Are particular universities and colleges  spending responsibly and safeguarding their assets for the future? Is one school or another in financial trouble and in danger of closing?

Telling these crucial stories doesn’t necessarily require special expertise in finance or high-level math skills —  just the same thorough research techniques and healthy journalistic skepticism as covering anything else.

After all, colleges and universities are just like any other human institutions, run by people whose motivations range from idealism to self-interest. Many try to hide embarrassing financial information or even corruption; large, public universities, for example, often hide high salaries paid to endowment managers by spinning off private foundations not subject to public-records laws.

This Topics page will walk you through tools and techniques that can help you scale those walls to help your readers understand the $700 billion question of how colleges and universities manage — or mismanage — themselves.

Updated May 2021