The Chalk Board: Where Do Colleges Get Their Money?
The late economist Howard Bowen coined "the revenue theory of costs," which states that institutions raise all the money they can and spend all the money they have. With the average cost of a college degree increasing faster than ever before (PDF), we were curious to know where, exactly, colleges and universities get their money. It turns out that revenue hails from many sources and depending upon the school, it typically looks like some combination of tuition and fees, state and local appropriations, endowment income, and federal funds.
Over the last decade, public institutions have grown increasingly reliant on tuition revenue; whereas tuition as a percentage of revenues at private colleges have declined. We examined public, private not-for-profit, and for-profit institutions to compare and contrast how their revenues stacked up. Which of the three models do you think is the most sustainable?
A collaboration between GOOD and Design Language.