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How to pay for college continues to be a primary objective of much of the legislation passed across the United States, as seen in our first report in the Higher Education Series. This report will review the basics of higher education revenues and expenses. These lists are not meant to be an exhaustive list of all the intricacies of higher education finance, but instead a general look at the ins and outs of college funding.
Colleges and universities have a complex financing system that includes many factors, but in general include these revenue generating components:
- Government. The federal government provides aid through aid programs to students. Whether those are grants and scholarships, or federal loans. The state also provides funding both through student aid programs and direct funding to the schools through budgeting. Local government entities can also contribute to higher education funding through different taxing mechanisms.
- Endowments. Many colleges and universities have endowment programs that offset or contribute toward operating budgets for schools.
- Supportive Organizations. Private foundations and other nonprofit organizations provide funding through academic program support and student aid programs. Some organizations provide scholarships and grants directly to students which ultimately is paid to the school through tuition.
- Tuition. Direct funding from students and families to the universities paid for education, room board, and fees for services.
- Research Funds. On campuses that complete research, a portion of the research grant funds are given to the university to offset the cost of the research being completed on the campus. This amount is set individually by each university. According to the Association of American Universities, between 67-75% of a research grant goes directly to the researcher to pay for salaries, graduate students, equipment and supplies. The remaining 25-33% goes to the university for infrastructure costs. The National Science Foundation reported the federal government gave $40 billion to public and private universities in research and development in 2017.
- Sale and Services of Auxiliary Enterprises. This includes things like dining, bookstore, printing, concessions, computer sales and services, and conference services.
- Sales and Services of Hospitals. Funds collected through the university hospitals services.
- Sales and Services of Educational Activities. Funds earned through activities like executive education, sales of scientific and literary publications, testing, consulting, and sales of products.
At most schools, tuition and fees do not cover the full cost of an education, and endowments in many cases across the nation are the largest source of revenue for a college. The University of Wisconsin Foundation currently had a 2018 endowment value of $3 billion. That put UW Foundation as the 32nd most valuable college endowment in FY2018. The Medical College of Wisconsin endowment is ranked 118 with $930 million; Marquette University ranked 163 with $669 million. In FY2018, the University of Wisconsin was the only school in Wisconsin ranked in the top 20 for most funds raised through private donations, and it ranked 18th bringing in $274,966,238. The University of Wisconsin also came in 6th on the list for institutions with the highest spending on research and development with $1.2 billion in FY2017.
On the other side of the equation are the expenses necessary for running an institution of higher education. Those costs include:
- Instruction. This includes all costs associated with instruction, including salary and benefits for university instructional employees.
- Research. Federal research dollars only accounted for 53.5% of the money spent on research in FY2017. Of the total $75.3 billion spent on research, institutions spent $18.9 billion.
- Public Service. Activities to provide noninstructional services that benefit individuals and groups external to the institution. This can include conferences, institutes, advisory services, radio and television, and consulting.
- Academic Support. This includes libraries, museums and galleries, educational media services, IT, ancillary support, academic administration, academic personnel development, and course and curriculum development.
- Student Services. Activities that include student services administration, social and cultural development, counseling and career guidance, financial aid administration, student admissions, student records, student health service, and student IT.
- Institutional Support. Expenses for executive management, fiscal operations, general administration, administrative IT, and public relations.
- Scholarships and Fellowships. All tuition discounts, allowances and scholarships.
- Hospital Services. This includes direct patient care, health care supportive services, administration of hospitals, and physical plant operations for hospitals.
Over the past 20 years, and especially during the Great Recession, state and federal funds provided to colleges and universities has diminished, leaving institutions with the requirement to find a way to offset revenue. In many cases across the United States, that has resulted in increased tuition and student fees. At some schools it has resulted in fewer class or degree offerings, and cuts to university programs. According to the Chronicles of Higher Education Almanac of Higher Education 2019-20, “For-profit institutions were by far the most tuition-dependent sector in the 2017 fiscal year, relying on that money for about 90 percent of overall revenue. Four-year private nonprofit institutions relied on tuition and fees for about 30 percent of their revenue, and four-year public institutions for under 22 percent. Public institutions spent more than $107 billion on instruction in the 2017 fiscal year, private nonprofit institutions spent more than $62 billion, and for-profit institutions spent nearly $3.9 billion. Two-year private nonprofit institutions were the only sector in which total expenses exceeded total revenue in the 2017 fiscal year.” Wisconsin schools received $1.6 billion in 2019-20 for higher education operation expenses. Yet, the universities spent $1.5 billion on research and development.
The University of Wisconsin System provided The Wheeler Report with the following tables of tuition at the various UW System schools over the past nine academic years.
Resident Undergraduate Tuition
|*Stout is per credit.|
Nonresident Undergraduate Tuition
|*Stout is per credit.|
The Wisconsin Technical College System tuition rates are: $136.50 per credit for resident, $204.75 for non-resident, or $184.60 per credit for Collegiate Transfer, $276.90 for non-residents.
According to the Almanac, “The average published tuition and fees for four-year public institutions more than tripled from 1988-89 and 2018-19. The average published tuition for four-year private nonprofit and two-year public institutions more than doubled over that period, based on inflation-adjusted dollars. The gap between the average published cost attending a four-year private nonprofit college versus the cost of attending a four-year public college has narrowed. Thirty years ago, published tuition and fees at four-year private nonprofit institutions were five times the cost of published tuition and fees at four-year public institutions. In 2018-19, there were only three and a half times as much.” Furthermore, during the 2018-19 academic year, an estimated 89.9% of first-time, full-time freshmen received institutional grant aid at private nonprofit institutions, which covered nearly 60% of the published tuition and fees. Discounts have grown at private nonprofit colleges by 13.1% for first-time, full-time freshman since 2007. (This is will be discussed in a later report included in this series.)
According to the Wisconsin Association of Independent Colleges and Universities (WAICU), 96% of all undergraduate students at WAICU schools receive financial aid, and 73% of the average undergraduate financial aid packages at WAICU schools are made as grants and scholarships, meaning they do not need to be paid back. WAICU says the average tuition for its 24 schools is $33,034, and the average freshman financial aid package is $28,010, making out-of-pocket tuition $5,024.
The following is a list of Wisconsin’s private, nonprofit colleges and universities published tuition and fees for 2019-20.
- Alverno College: $29,456
- Bellin College: $21,383
- Beloit College: $51,532
- Cardinal Stritch University: $31,798
- Carrol University: $32,850
- Carthage College: $45,100
- Concordia University: $30,286
- Edgewood College: $30,600
- Herzing University: $15,961
- Lakeland University: $29,880
- Lawrence University: $49,122
- Marian University: $27,950
- Marquette University: $43,936
- Medical College of Wisconsin: Depends on the program varies $42,000 – $55,130
- Milwaukee Institute of Art & Design: $38,550
- Milwaukee School of Engineering: $42,162
- Mount Mary university: $31,160
- Nashotah House: Depends on the program varies $100 per course to $500 per credit hour
- Northland College: $37,514
- Ripon College: $45,113
- St. Norbert College: $39,529
- Silver Lake College of the Holy Family: $29,600
- Viterbo University: $28,650
- Wisconsin Lutheran College: $30,850