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What Does Your College Tuition Actually Pay For?

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OneClass Blog
11 Aug 2020
11 min read

What exactly are you getting for your college tuition? The answer isn't always clear because your tuition bill is just one large number. There's no clear breakdown for how much is used to keep the lights on or what's being spent on professors’ salaries. The experience is similar to getting a single total after a shopping trip rather than an itemized receipt.

Even as a college degree is a strong factor for future success, students are still curious about what's in that large tuition bill. We dug into the data to understand how exactly colleges are spending your tuition money.

what does your college tuition actually pay for

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Where Are Your Tuition Dollars Going?

The breakdown of costs at each college will look slightly different. However, to get a general understanding of what tuition is paying for, we used figures from the U.S. Department of Education about public colleges and universities. The most recent data was from the 2017-18 school year. 

Using the detailed budgets, we then divided the data into items that relate directly to the student experience versus everything else. For example, student-related expenditures include classrooms, instructors, and dining halls. Examples of other expenses are conferences, research and taxes. 

For every $100 you spend in tuition, $61.46 goes directly to the costs of your education. The largest expenditure is salaries, which is a common big-ticket item for businesses. Many industries spend 15 to 30 percent of gross revenue on payroll.

  • Salaries: $15.81

Faculty, staff, student employees

  • Other Instruction Expenses: $11.47

Academic costs, buildings, facilities

  • Auxiliary Enterprises: $9.61

Food services, residence halls, student health, faculty housing

  • Academic Support: $8.26

Libraries, teaching clinics, museums, academic administration

  • Institutional Support: $8.15

Admin, IT, logistics

  • Student Services: $4.75

Admissions, registrar, student activities

  • Grants to Students: $3.41

Student aid amount excluding discounts such as reduced tuition

On the other hand, $38.54 of every $100 in tuition goes to pay for everything else. This financial category does include hospitals and research, which can be a part of the education for medical students or graduate researchers. However, they are outside of the traditional classroom experience, so we allocated them to this second category. 

  • Hospitals: $15.58

College-run hospitals, including health care expenses, admin, physical plant

Note: This figure is strictly expenses and is not the net financial figure after hospital revenue.

  • Research: $11.66

Projects, research centers

  • Other: $6.25

Taxes, liabilities, depreciation

  • Public Service: $4.52

Community service, conferences

  • Independent Operations: $0.53

Varied by institution, but one example is federally funded research

The issue of college costs isn't a new concern. When faced with significant student debt, many students are prompted to think critically about the value of their tuition. However, details about tuition costs are especially concerning to today's college students who face a fall semester during which on-campus classes could be limited or eliminated. 

A recent survey found that 93 percent of U.S. college students feel that if college goes online this fall, tuition should be lowered. These students wonder why they should be paying for campus amenities like computer labs and gyms if they can't access them. 

A petition to lower tuition at Rutgers University resulted in a 15 percent reduction in campus fees but no change in tuition. The reduction was less than $300, and students are still spending about $1,300 for campus fees.

Why Does Private College Cost So Much More?

There is a clear tuition difference between public and private colleges. During the 2019-20 academic year, the College Board reported that full-time students who are attending an in-state school pay an average of $21,950 per year for tuition, fees, room and board. On the other hand, the same cost at a private college is $49,870. 

This disparity in the cost of attendance can be more relatable when we think of it in terms of cost per class. At a public four-year school, students are paying about $36 per class, but at a private college, the cost per class is $125. 

When comparing public and private schools, there are variances in incline sources. For example, public colleges are more likely to get more government support and private colleges often have large endowments. Putting aside income differences, we wanted to look at college expenses as a portion of average tuition rates. 

Below you can see how differently colleges spend tuition at public colleges versus private colleges. 

The biggest cost differences between public and private colleges are salaries, instructional expenses, institutional support and administration. These categories alone add up to nearly $14,000 more spent for private college than for public college.  

Average Tuition Costs at Four-year Colleges and Universities

PublicPrivate
Salaries and Other Instruction Expenses$5,987.96$15,315.08
Hospitals$3,419.81$6,473.13
Institutional Support$1,788.93$6,363.41
Research$2,559.37$5,296.19
Auxiliary Enterprises$2,109.40$4,308.77
Academic Support$1,813.07$4,293.81
Student Services$1,042.63$4,199.05
Independent Operations$116.34$1,526.02
Other$1,371.88$1,107.114
Public Service$992.14$748.05
Grants to Students$748.50$239.376

How Are Tuition Trends Changing?

In the last decade, the cost of college has increased by more than 25 percent. This increase has been widely known, and the increased sticker price is deeply felt by many students. 

However, the true picture of these rising costs is much more complex. When we look at tuition income as a percentage of operating costs, we see that students are paying a larger share than they did 20 years ago. 

At public colleges, increased student tuition now accounts for nearly half of all operating costs. At the start of the century, students were paying less than one-third of the cost of operating each school.

Tuition As a Percentage of Public Higher Education Revenue

  • 2000    29.2%
  • 2001    29.5%
  • 2002    30.4%
  • 2003    32.5%
  • 2004    35.2%
  • 2005    36.2%
  • 2006    36.5%
  • 2007    36.3%
  • 2008    35.8%
  • 2009    37.7%
  • 2010    40.6%
  • 2011    42.5%
  • 2012    47.0%
  • 2013    47.7%
  • 2014    47.2%
  • 2015    46.9%
  • 2016    46.9%
  • 2017    46.6%
  • 2018    46.6%

During this time of economic uncertainty, the net price of attending a four-year college is under a microscope. An increasing number of students are considering attending a tuition-free community college or focusing on associate degrees that lead to high-paying jobs.

This fall, whether students are attending college in person or online, it can be more important than ever to earn the top grades that establish a path to success. Academic achievement isn't always easy during times of high stress or uncertainty. However, OneClass is helping students stay on task through a directory of shared class notes and study guides. 
When you're able to study more efficiently, your grades will improve. In fact, 90 percent of OneClass users have improved by one letter grade or more. Find out how OneClass is helping today's students make the most of their education through crowdsourced learning tools and study resources.

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