How Does a College Use Your College Tuition?

Knowing more about how your college might use your college tuition is an important part of making your collegiate decisions. After all, the more you know about your college tuition, the more you’ll be able to decide if paying for it is worth it. Understanding more about how a college spends the tuition you pay will be a great way to make the right decision. Here’s what you need to know about what a college actually spends your tuition on.

What Does Your College Tuition Actually Pay For?

1. Breaking Down $100 of Tuition

First and foremost, you might want to break down $100 of tuition. This can be an effective way to understand tuition costs because it makes it easier to understand.

First off, $61.46 on average of every $100 will go to things a school needs to invest in if it wants to be an academic establishment. This is how those necessary purchases will typically end up looking in your tuition:

  • $15.81 – Salaries
  • $11.47 – General Instruction Expenses
  • $9.61 – Auxiliary Student Enterprises
  • $8.26 – Academic Support
  • $8.15 – Institutional Support
  • $4.75 – Student Services
  • $3.41 – Grants and Financial Aid

The other $38.54 will go toward things that aren’t technically “necessary” for your academic accomplishments. Although these are important for a college or university’s continuing existence and often for students’ growth and success, they’re still not always necessary:

  • $15.58 – Hospitals and Healthcare
  • $11.66 – Research
  • $6.25 – Other, Including Taxes and Liabilities
  • $4.52 – Public Services
  • $0.53 – Independent Operations

2. Understanding Private Versus Public Tuition

Private and public schools both exist for many different reasons. There are many reasons someone might choose to attend a private school or a public school, but one of the main reasons is that a public school is typically much less expensive.

The College Board reported that for the 2019/2020 school year, an in-state public school, including tuition, fees, room, and board, cost $21,950 yearly. Contrast that to the current cost at a private school, which is $49,870 yearly. That’s more than twice the cost of a public school.

Tuition is one of the main reasons that people choose a public school over a private school, and for good reason. Over a four-year period, you could save more than $110,000 just from choosing a public school instead of a private one.

3. Unpacking Tuition as a Percentage of Income

One trend that might shed some light on this topic is tuition as a percentage of public higher education income. To cover operating costs, colleges and universities will utilize plenty of income streams, including government grants, which are largely available for public colleges and universities.

However, over time, colleges have started to rely more and more on tuition. In 2000, tuition only made up around 29.2% of a public college’s revenue stream on average. However, in 2018, that number has skyrocketed to 46.6%. That also corresponds with a more than 25% increase in tuition overall.

Conclusion

Colleges utilize tuition for a variety of reasons, and it’s important to keep in mind that colleges do have an inherent operating cost. However, that doesn’t necessarily mean colleges have to charge the amount they currently do. There are many opinions on college tuition, but with this information, you can at least have a more well-informed opinion.