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The relationship students have with colleges and universities is a mutually beneficial one. Colleges provide students with an education and a foundation upon which they can start a career, and colleges receive money in return. Sure, these schools may feel a sense of satisfaction knowing they are playing a part in the successes of all those individuals, but if benevolence was the only motivation, college costs would be lower and there would be no “for-profit” schools.
Where do colleges get all of their money from? According to a publication by Open Source radio, only around 20% to 40% of funding for public and private schools comes from tuition and fees. This is a surprising statistic, considering tuition costs have climbed sky high in recent years. The National Center for Education Statistics reports the average cost of tuition and fees at all schools at $10,683 for the 2012 through 2013 school year. This amount does not include room and board, for which the average cost at all schools is an additional $9,552. Some reports indicate that a higher portion of public college and university funding is sourced from tuition. US News reports that tuition accounts for around 47% of public education revenue.
Colleges also receive money from states, government grants and contracts, research, hospital revenue, and other sources. Then, in addition to those funds, several schools also have big money coming in from sports programs. During the 2011 through 2012 school year, Business Insider estimates that Texas athletics earned $163.3 million in revenue.
Sound like a lot of money? It may sound like a lot less when you compare it to the huge amounts of money some of these schools earn in the form of in endowments. A 2014 report by the National Association of College and University Business Officers and Commonfund Institute lists the endowment funds for around 850 schools. The amounts range from as little as $714,00 to as much as $32.3 billion. These funds are often given to schools by various different entities and schools also generally invest a portion of these funds in hopes of earning a return. Reports indicate that Harvard recently received a $350 million donation from a single investor.
Based on endowments, here are the 10 richest schools:
- Harvard University $32.3 billion
- Yale University $20.8 billion
- University of Texas System $20.4 billion
- Stanford University $18.7 billion
- Princeton University $18.2 billion
- Massachusetts Institute of Technology $11 billion
- Texas A&M University System and Foundations $8.7 billion
- University of Michigan $8.4 billion
- Columbia University $8.2 billion
- Northwestern University $7.9 billion
Source: Erika Rawes, sources cited within
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