Who’s Paying the Bills at the Nation’s Top Public Universities?

College Search & Selection
1

<p>For undergraduate education, tuition represents the largest single source of revenue for the vast majority of America’s top public universities. These colleges have other sources of income (state funds, endowment contributions, annual gifts, research activities, etc.), but tuition is the major contributor.</p>

<p>In this demanding financial era when our public schools are seeing their state funding and endowments under great pressure, many schools are considering increasing their OOS enrollment in order to boost their revenue. Why? Because OOS students pay more…sometimes a lot more…than IS students. </p>

<p>I looked at the public schools ranked in the USNWR Top 75 and did a rough calculation of how much of their revenue currently comes from OOS students and how much from IS students. Below are the results:</p>

<p>OOS Revenue , IS Revenue , School ( % of OOS students , OOS T&F , IS T&F )</p>

<p>81% , 19% , U DELAWARE ( 64% , $23,186 , $9,486 )
66% , 34% , U IOWA ( 37% , $22,198 , $6,824 )
65% , 35% , PURDUE ( 39% , $25,118 , $8,638 )
61% , 39% , U MICHIGAN ( 35% , $34,230 , $11,738 )
61% , 39% , INDIANA U ( 34% , $26,160 , $8,613 )
57% , 43% , WILLIAM & MARY ( 32% , $30,592 , $10,800 )
57% , 43% , U WISCONSIN ( 32% , $22,270 , $8,020 )
56% , 44% , GEORGIA TECH ( 27% , $25,716 , $7,506 )
56% , 44% , U VIRGINIA ( 28% , $31,870 , $9,870 )
54% , 46% , VIRGINIA TECH ( 32% , $21,488 , $8,735 )
49% , 51% , CLEMSON ( 29% , $24,998 , $10,688 )
48% , 52% , U MARYLAND ( 24% , $23,990 , $8,053 )
46% , 54% , U N CAROLINA ( 17% , $22,294 , $5,396 )
44% , 56% , U CONNECTICUT ( 23% , $25,486 , $9,886 )
37% , 63% , PENN STATE ( 25% , $25,946 , $14,416 )
34% , 66% , U GEORGIA ( 12% , $22,342 , $6,030 )
32% , 68% , U MINNESOTA ( 26% , $15,542 , $11,542 )
30% , 70% , U WASHINGTON ( 12% , $24,367 , $7,692 )
26% , 74% , U PITTSBURGH ( 17% , $23,852 , $14,154 )
24% , 76% , OHIO STATE ( 11% , $22,278 , $8,706 )
21% , 79% , UC BERKELEY ( 7% , $30,022 , $8,352 )
19% , 81% , UCLA ( 6% , $29,897 , $8,228 )
18% , 82% , U FLORIDA ( 4% , $23,744 , $4,373 )
17% , 83% , MICHIGAN ST ( 8% , $28,270 , $11,935 )
12% , 88% , U TEXAS ( 4% , $30,600 , $8,930 )
12% , 88% , RUTGERS ( 7% , $22,518 , $11,886 )
12% , 88% , U ILLINOIS ( 6% , $25,756 , $11,614 )
12% , 88% , UC S BARBARA ( 4% , $30,724 , $9,055 )
10% , 90% , UC S CRUZ ( 3% , $31,559 , $8,890 )
10% , 90% , UC SAN DIEGO ( 3% , $30,819 , $8,798 )
9% , 91% , UC IRVINE ( 3% , $28,796 , $8,775 )
8% , 92% , TEXAS A&M ( 3% , $22,886 , $8,336 )
6% , 94% , UC DAVIS ( 2% , $31,385 , $9,364 )</p>

2

<p>That is simply not true. Tuition at most state schools is so heavily subsidized its th TAXPAYERS who are paying it. The cost of tuition at a state college is a fraction of the room and board fees. And still yet, they get hundreds of millions in other funds from their state coffers. </p>

<p>What is your source for this allegation that “tuition is the main source of revenue at state colleges?”</p>

3

<p>And since they are state colleges with a state legislated mandate to educate the citizenry of that state, they have no obligation to educate students from out of state or offer them the same terms of payment. College education is not an entitlement, its a privilege. The only entitled education we have is public k-12. </p>

<p>I see nothing wrong with charging OOS students fees that are comparable to private colleges. For every OOS student that is admitted, an in state student is denied a seat.</p>

4

<p>There are lies, damned lies and then statistics.</p>

5

<p>gb,
Take a look at the state budget in your home state or any other state and then look into how much aid these institutions receive from the state. Now compare that with the revenue from Tuition & Fees (I don’t include room and board because the cost for that is the same for all students). I think you will find the exercise enlightening as to what is actually going on with the matter of state funding. </p>

<p>Like it or not, state payments to public institutions are down A TON over the past decade and they’re not coming back, so much so that many partisans of top publics are contemplating a push for privatization. There are no lies here-the state universities are hurting financially, their endowments have been badly hit, their state funding has declined and the financial need of many of their students (IS and OOS) has increased. The only positive revenue trend for them is the federal government which is pushing for more research projects at the nation’s universities. I doubt, however that this has a large positive impact for most undergraduate students. </p>

<p>The matter of charging different rates to OOS and IS students is something that we agree on, but IMO, given the declines in state support, the degree of this difference has gotten out of balance in many states. And the current trend in many financially strapped states is definitely toward admitting more, higher-paying, OOS students.</p>

6

<p>This is simplistic and wildly misleading, on several counts. First, tuition revenue represents only a fraction of total university revenue, but that fraction varies widely from school to school. Some public universities are heavily dependent on tuition revenue. Others are more heavily supported by their state legislatures. Some have large endowments and bring in hundreds of millions of dollars annually in outside research grants, a substantial fraction of which supports the overall university budget through “indirect cost recovery.” Others are not so blessed. To present tuition revenue alone as “how much of their revenue comes from OOS students” is just wildly misleading.</p>

<p>Second, the figures presented by hawkette do not take into account the substantial tuition discounting (need-based and merit financial aid) that goes on at some public universities, and not at others. Some schools spend a lot on FA for OOS students; others little or none.</p>

<p>Third, in some cases the figures hawkette presents are just wrong. At the University of Wisconsin, for example, about half the OOS students are Minnesotans who pay in-state, not OOS tuition, under the two states’ tuition reciprocity agreement. Hawkette lumps the Minnesotans into the OOS category and presents the data as if they were paying OOS rates. Wrong.</p>

<p>Finally, to provide some context, it should be pointed out that none of the OOS tuition rates listed here is as high as the tuition at the typical elite private college or university. OOS tuition at Michigan, the highest if those presented here, is about $5,000 cheaper than at most top private schools. At Wisconsin, OOS tuition is about $17,000 cheaper than at most elite privates. For full-pay students, this represents a substantial cost difference. For students with financial need, you’d need to take each school’s financial aid award into account to get any meaningful comparison, of course. But for the same reason that comparing private to public raw tuition rates won’t give you a meaningful basis for comparison of actual costs, presenting raw data on in-state v. OOS tuition also won’t give you a meaningful comparison.</p>

7

<p>Hawkette, I dont disagree that their overall funding has been hammered by the economic circus tent coming down on us all. I also recognize that their endowments, like that of all colleges (where were the so called professional money managers who were supposed to PREVENT disaster and protect against such calamity? Taking their fees and partying and doing NOTHING of the sort…it was the most massive act of professional malpractice in the history of the United States. Fact) also were hammered. </p>

<p>My point like bclinton’s was that their revenues are NOT primarily from 'tuition." Whether they should or shouldnt go private is another question. </p>

<p>The larger question is what we as a nation do during this continuing crisis. 500 trillion in worthless derivatives. The NYSE and NASDAQ are fools gold, the talking heads are clueless. We are facing calamity. Ross Perot was right, that giant sucking sound you here is your job going overseas. The United States was the major engine of GLOBAL economic activity. We are a very sick patient right now with consumers TAPPED out on debt, their assets DEFLATING rapidly, the home mortgage ATM machine gig is up, and their are facing looming job losses. Its very scary. Meanwhile we have MILLIONS of college graduates with student loans who cant find meaningful work, even working retail in the malls…which also face calamity…and closure. I used to shrug at recessions and say, “this too shall pass.” This time it is different. I have not given up hope, but I am very concerned about where we are going and where people, my kids in particular, will find jobs. With or without a college education. </p>

<p>The Administration bailed out the greedy bankers and the belligerent unions at the clueless car companies who manufactured too many cars. Eventually we will work through the excess inventory in housing and automobiles. But we are still stuck with our debt…and consumers are learning a hard lesson…and thus NOT going to spend money if they have a lick of common sense. </p>

<p>So what are people going to do? Send their kids, whom they love, to college and pay for it how? Not with a second mortgage. That party is over. With PLUS loans? More debt? </p>

<p>We have to get back to making stuff here at home and stop importing so much. That sounds like protectionism, but its really self preservation. For if we dont produce here at home, we wont have the jobs and income to pay for anything. The conundrum were are in is exacerbated by the fact that China owns the highest percentage of US treasury bonds in the world (financing our national deficit). They will one day get weary of seeing those bonds go down in value as the dollar continues to sink…and then what? At best, they stop buying more bonds. At worst, they sell them for some other investment or demand payment. How do we get the dollar to rise in value? It goes in the opposite direction of equity values (economics is a funny thing). So that means the stock market has to come down…a LOT. And more lost revenues from endowments and more asset devaluation. There is no alternative. Eventually we all have to pay the piper.</p>

8

<p>Bc,
“Simplistic and misleading?” Is it? I grant you that this is a rough calculation (as noted in opening post) and does not take into account the relative amounts of need-based and merit aid. However, let’s use your favorite-U Michigan-as an exhibit to see if the initial data is that far off. Here are U Michigan’s revenues (ex hospital):</p>

<p>$791 million from Student tuition & fees
$723 million from Government sponsored programs
$404 million from State funding
$257 million from Endowment gifts
$214 million from Auxiliary units
$137 million from Private Gifts
$131 million from non-Government sponsored programs</p>

<p>As you can see, tuition and fees are the biggest source and almost twice that of state funding. Do you expect this relationship to change in the future with a higher contribution from the state? I don’t. And my reading/observations tell me that this pattern is playing out in state after state in all regions of the country.</p>

<p>In the case of U Michigan, research funding and Endowment gifts constitute major parts of their revenue stream. I hope you would agree that U Michigan’s prowess in generating revenue from such sources is matched by very few public universities. Do you expect these revenue sources to materially change at U Michigan and more broadly at publics across the country? I don’t think so, unless you believe that other publics will markedly improve their share of funding and if you think that their endowments will magically sprout and produce significantly higher levels of funding. </p>

<p>The reality is that, as it relates to undergraduate education, tuition and fees are the main source of revenue for the vast majority of public universities and current financial realities point to this increasing in future years. My guess is that OOS students at a great many of these publics will be asked to shoulder an ever increasing amount of this. </p>

<p>Gb,
I think we share many of the same views and values about the way that we got to this point. I’m only trying to better illuminate the cost that an OOS student is being asked to pay at ABC Public vs the value that he/she is receiving and how this compares to the IS students. To me, given the level and declining nature of most state contributions, the burden seems to be a little heavy on the OOS student/family.</p>

9

<p>I would bet money that tuition and fees represents tuition, books, university general fees and ROOM AND BOARD. “Fees” is an ubiquitous accounting line item for all of the above.</p>

10

<p>Hawkette:</p>

<p>There is no doubt that publics are cutting state aid, just as the private are reducing endowment aid. But your simplistic logic, is well too simplistic, i.e., it just doesn’t work. Take a UC campus, for example. The OOS tuition and fees are set at the supposed full rate to educate an undergrad. (Now, I fully admit that 99% of the Legislators are half-baked and numbers-challenged, but let’s assume that they are somewhat close to their goal.) Then, using round numbers for convenience, </p>

<p>6,000 Davis Frosh @ $50k per student = $300M total to educate, house and feed these all of the 18/19 year-olds.</p>

<p>2% OOS is 120 Frosh times $50k = $6MM.</p>

<p>6MM/300MM = 2% OOS contribution, not 6% as you suggest. </p>

<p>OTOH, BC is correct in that you are missing the significant OOS discounts offered by many publics. The 'Zonas, for example, waive OOS fees to ALL early OOS applicants. And, you miss the fact (which goes in your math’s favor) that the UCs purposely accept 33% Pell grantees which pay essentially zero tuition/fees to attend – all subsidized by the Feds and (dwindling) state taxpayers (from a different state pocket).</p>

11

<p>And yes, the “burden” is going to be heavier on OOS students…and therein lies the admissions games…most state schools have a mandate to admit instate students because of taxpayers, but also want to admit higher paying OOS students to help balance their annual budgets. Its particularly acute at schools like UNC where the mandate is 85% instate, by state law. </p>

<p>Again, there is no entitlement to college…anywhere. Its a privilege. Parents will have to make tough choices with their kids: go instate and save a ton of money, or go OOS and pay up like a private. Even private colleges are on lockdown for hiring freezes and wage/salary freezes and cutting programs that are anemic. </p>

<p>This has a negative social effect. We all lose when colleges have to cut back on programs. HOWEVER, colleges are bastions of waste (and sometimes fraud…soft fraud…people getting paid for doing little or no work at all). They must be more careful stewards with their revenues, by whatever sources they have. And they have to try harder to keep costs down. Billion dollar endowments are obscene in my view. While charitable giving is by necessity a gift of the heart and a private personal and subjective decision…people who give to colleges that are already holding billions is perhaps a poor choice…they would be doing far more good by giving their money to colleges which NEED the endowments more…even if they didnt go there. If I were Bill Gates or Warren Buffett that is what I would do. I would establish scholarships at HUNDREDS of Universities and perhaps tailor them for MIDDLE CLASS families, meaning for kids with SAT’s below 1400 who wont be going to wealthy Ivy League Schools, but who otherwise cant afford a private college education on their own without massive financial aid. Poor kids get 100% funding. Ivy League kids with family incomes below 180k (99% of them) get 100% funding. But the middle class get hammered at every OTHER university.</p>

12

<p>blue,
I probably should have worded my opening post to say that this is the share of Tuition that each group pays. Here is my calculation for UC Davis with same pattern used for all colleges:</p>

<p>Total undergrads: 24,209 (98% IS, 2% OOS) with total tuition pay of $237,355,204</p>

<p>Total IS: 23,725 * $9364 = $222.159,214 (94% of total tuition revenue)
Total OOS: 484 * $31,385 = $15,195,989 (6% of total tuition revenue)</p>

13

<p>sure, hawkette, we understand the numbers, but they are meaningless when the state also adds “tuition dollars” from the state budget. Again, using the UC as an example, a full pay student pays ~$10k in fees, while the state kicks in an additional $22k out of another bucket (state general fund tax dollars). While your math may work, the analysis is meaningless. Moreover, your opening line is just plain wrong:</p>

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<p>Absolutely wrong. Each instate student pays $10k, while the state contributes an additional $22k. Thus, tuition/fees are NOT the largest single source, the California state tax payors are…</p>

14

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<p>hawkette, according to your own figures “tuition and fees” at the University of Michigan represent 29.7% of the University’s non-hospital revenue. So I’d say, absolutely “simplistic and misleading” to present an incomplete statement of tuition revenue-- failing to take into account the very substantial discounting that goes on in the form of need-based & merit aid–as an indication of “who pays the bills,” as you put it. The fact is, students pay only a fraction, less than 30%, of the bills. That OOS students pay a somewhat larger fraction of that 30% than do in-state students who are partially subsidized by $400 million in legislative appropriations will come as no surprise to anyone. But your rhetoric about “who pays the bills” seems calculated to spread disinformation, namely the mistaken impression that OOS students are somehow being ripped off at public institutions. The fact is, like all students at elite privates, OOS students at the top publics are paying only a fraction of the actual cost of their education.</p>

15

<p>re: post #8</p>

<p>hawkette, I don’t know where you got your figures for Michigan’s various budget categories, but the University doesn’t take in anywhere near $791 million from UNDERGRADUATE tuition and fees. If all in-state and OOS undergrads at Michigan paid full tuition, the total in tuition and mandatory fees would be about $510 million. Subtract need-based and merit gift aid awards and the figure is around $376 million, or less than half the figure you misleadingly cite here. </p>

<p>The $791 million has to include tuition and fees for graduate and professional schools—law, medicine, dental, graduate business, graduate engineering, graduate arts & sciences, etc. All rather irrelevant to this discussion.</p>

16

<p>I agree with Hawkette on this one. Those that think it actually costs 32,000 dollars to educate someone at a public university is wrong. Really at least at Berkeley the actual cost to educate an undergraduate is around 7000 give or take but since the state has substantially lowered funding they are needing ways to fund research overhead cost and grad programs. The same occurs at private schools the undergraduates are the ones paying for research and grad students stipends, which while the should probably contribute to the research, to charge 22,000 extra than what it costs to educate seems wrong. Also in the UC system administrative costs are ridiculous and the administration has grown at a rate three times that of undergraduate growth costing around 600 million in bloat. I suggest anyone interested in the UC systems financial woes go to universityprobe.org. Quite an informative site. Another interesting article about the price to attend college here [The</a> True Cause of College-Tuition Inflation? - Freakonomics Blog - NYTimes.com](<a href=“The True Cause of College-Tuition Inflation? - Freakonomics”>The True Cause of College-Tuition Inflation? - Freakonomics)</p>

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<p>Sources, please? And, while you are googling, think about the fact that it costs more than $7k to educate any student in the California K-12 system…</p>

18

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<p>Well, actually, I think I have to disagree with that sentiment and instead agree with some of the other posters here, especially sofla951. The problem has to do with how one strictly defines ‘undergraduate education’, for the fact is, most universities do more than merely educate undergrads. Most of them also engage in research and train PhD students - and indeed that is the primary task of many universities, with undergraduate education being a secondary consideration at best.</p>

<p>Undergraduate education is therefore a joint product that is produced along with a number of other goods, and as any economist would tell you, it is meaningless to talk about the true average production cost of a joint product. For example, it is essentially impossible to calculate the average production cost of bacon, as a pig is used to produce a wide variety of foodstuffs such as ham, pork, chitterlings, rinds, and so forth - and any such imputation of costs to one product or another would be arbitrary. There is certainly no reason why the costs of the whole pig should be imputed to only the customers of bacon, allowing the consumers of pork and ham to eat for free. </p>

<p>Similarly, there is no reason why undergrads should necessarily have the entire costs of the university imputed to them. Let’s face it - most undergrads don’t really care about research, and they certainly don’t care about training new PhD’s. All they care about is the undergraduate education. Yet a university is bundled as a package deal. They can’t pick what they want for the desired price a la carte - it’s an all or nothing affair. To impute the entire costs of the university to them is to let the other consumers of academia - namely the academic researchers and the PhD students - are enjoying a free ride. </p>

<p>{Now, to be fair, the undergrads probably do enjoy some benefit from the research, namely due to the enhanced prestige it brings to the university, but there is little doubt that the lion’s share of the benefit of research is enjoyed by the academic community itself. Let’s face it - the vast majority of academic research papers are read by nobody outside of academia, and by very few people even within academia. Even at the most prestigious journals, a high percentage of papers are never cited even decades after publication, indicating that much published research fails to have an impact even within academia and is essentially wasted effort.} </p>

<p>Besides, think of it this way. If it were really true that undergrads pay only a fraction of their true cost of education, then that begs the question of why exactly do schools expend such great efforts to entice them to come? Why would schools want to deliberately lose money? Wouldn’t they be better off in trying to repel undergrads from coming and, heck, perhaps even shutting down the undergraduate program entirely? After all, if a company is selling a product that truly costs more to produce than the price it can charge, then that company should immediately stop selling that product.</p>

19

<p>^^^No bclintonk is right. hawkette is an expert at disinformation when it comes to dissing public schools.</p>

20

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<p>Yet right now, plenty of OOS, and frankly also foreign national, students are not only attending state universities while not paying so much as a single dime for their education, but actually getting paid by the school, and by extension, the state taxpayers. Not only that, but those students didn’t even have to undergo a more stringent admissions process compared to their in-state rival applicants. </p>

<p>Scandalous? Keep in mind that I am talking about the PhD students, few of whom at the top state schools will actually come from within that state. For example, relatively few PhD students at Berkeley are actually from the state of California; in certain technical disciplines, well over half of them are not even from the United States. Yet Berkeley’s PhD students receive a stipend without regard from whether they came from in-state or not. PhD admissions are blind to in-state status; Berkeley is not going to admit a less qualified Californian over a more qualified OOS or foreign candidate. The same can be said for UCLA, Michigan, and many other top-ranked state schools. </p>

<p>I knew a German guy who went to Berkeley for his PhD. He never paid so much as a dime for any of his education in his entire life. Universities in Germany are (mostly) free, and he lived at home as an undergrad and therefore never had to pay for board. Berkeley gave him the full ride and stipend typical of a PhD student. Nor did he stay in California upon graduation to pay back the costs of his education; as soon as he graduated, he went right back to Germany where he took a faculty position at a German university. Basically, Germany was able to slyly offload the entire costs of his graduate training to the state of California.</p>