May 17, 2014

Where Does All That Money Go?

Where Does All That Money Go?

By Kunal Jasty

College tuition is rising faster than medical costs, inflation, and certainly the income of 99% of Americans. Four years at a private university now costs as much as a new Ferrari, and a student at a public university can expect to graduate $25,000 in debt. But does anyone know where colleges are spending all their money?


Academic Support – Academic administrators, academic deans, libraries.

Instruction – “General academic instruction, occupational and vocational instruction, community education, preparatory and adult basic education, and regular, special, and extension sessions.”

Research – Funding for research institutes, laboratories, and individual research.

Public Service – “Activities established primarily to provide noninstructional services beneficial to individuals and groups external to the institution. Examples are conferences, institutes, general advisory service, reference bureaus.”

Student Services – Admissions, registrars, student activities and organizations, student counseling.

Institutional Support – General administration and management, legal operations, fiscal operations, logistical expenses, public relations.

Operations and Maintenance – Utilities, insurance, maintaining campus buildings and grounds.

Depreciation – Losses in capital assets per year.

Scholarships and Fellowships – Grants, stipends, awards.

Auxiliary Enterprises Expenses – Residence halls, dining services, student health services, athletics, faculty housing.

Hospital Services – All expenses at a university affiliated hospital.

Independent Operations – Expenses “unrelated to the primary missions of the institution (i.e., instruction, research, public service) although they may contribute indirectly to the enhancement of these programs.”

Other expenses – “The amount of money (estimated by the financial aid office) needed by a student to cover expenses such as laundry, transportation, and entertainment.”

Net grant aid to students – The difference in the money a school receives in tuition, fees, room and board, and the amount of scholarships and fellowships it awards.

Source: National Center for Education Statistics IPEDS glossary. Data from NCES.

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  • Dave W.

    Where does the million dollars that College Football Coaches earn on average fit?

    • Brian

      The flagship sports program at almost every major university is a source of revenue, not an expenditure. Typically, the football and/or basketball team bring in enough revenue to support the rest of the athletic program.

      • DS

        This is completely not true at all. The top 10, yes only 10 big name teams make a profit (i.e. big names like Florida Gators). The next 50(ish) teams break even. The rest, which is about 4,000 spots team, all lose money and need funds paid by student tuition to support the teams. Which means at most colleges both the basketball and football teams are actually losing money.

        • #shutdown

          Actually, your facts are horribly wrong. Any team in the big east, sec, big ten, big twelve, and acc bring money in to their programs through basketball and football. Hardly 10 big name teams.
          14m in basketball revenue for a school that is no where near considered a top 10.

          • Andrew

            And on top of this, sports teams have a tremendous impact on local economy. I live in a small college town, and during our football games the towns population triples.

          • Anthony S.

            While i agree with your statement of DS’s facts being wrong “horribly” is not an adjective i would use to describe the degree. The statements DS makes are inherently incorrect but the trend he describes is not necessarily incorrect. Some schools do indeed make a profit on their sports programs, many others may only break even and some will actually lose money.Your statement that ” Any team in the big east, sec, big ten, big twelve, and acc bring money in to their programs through basketball and football” is also incorrect depending on your definition of “bringing money in”. First we must realize that revenue does not equal profit and that the expenses for these sports programs are absolutely immense. For example the self-reported expense of the Florida Atlantic Owls in 2008 was well over $16 million. So yes I would hope schools bring money in through these programs because they are dishing a heck of a lot out which means they are not necessarily bringing in a profit to the school and in some cases drawing money away from the school.

            tl;dr Whether or not a school makes a profit through its sports programs varies wildly from school to school and the size and popularity of the school does not always predict profit or lose.

            Source: – These are self-reported so take them with a LARGE grain of salt. I would suspect some revenue inflation and expense shrinking especially since some schools magically break perfectly even.

          • 8bit

            Dude, revenue is not profit… if Marquette brings in $14MM from their basketball team, and spends $15MM on their basketball team (no idea if that’s correct, this is just a hypothetical) then they’re $1MM is the hole, despite $14MM of revenue.

          • g

            Actually, you don’t know how to read facts. Only a small number of schools make enough money off football and basketball to fund all the teams expenditures. Notice the story you linked said “revenue”, not “profit”.

          • Dave

            #shutdown: Reread the story you linked to. It only talks about revenue, and says nothing about costs, either of the basketball program or athletics as a whole. DS is right: most Div-I athletics programs lose money.

          • Bigger Picture

            They bring in money, but they normally don’t bring in enough money to sustain themselves. Only the biggest schools make profits on their athletic teams. They bring in money, but most don’t bring in more money than they use for traveling and new gear. And football and basketball profits are used to supports smaller sports like baseball, swimming, and soccer. DS is right

          • Bo Broussard

            Whether or not a team brings in money doesn’t mean the COACH deserves MILLIONS OF DOLLARS A YEAR. I went to UT. It is a waste of money. If less money is made or games are not won, is the coach paid less? No. So this flat cost should be as reasonable as possible, aka under $250k a year. That’s plenty to entice a good coach to stay at a university, especially one with good standing like UT.

        • Damien

          It’s more like the top 2000 or so:

        • T Krik

          And that’s about popular sports. I wonder what’s the financial situation in things like soccer or tennis.

    • Fernando Andy Ramirez

      “Instruction” takes care of that

  • evan

    + sports?

    • Brian

      Sports is funded by sports. Usually the football/basketball teams bring in enough to support the entire athletic program.

      • usonium

        That’s usually not the case….

    • mary

      Athletics, under Auxiliary Enterprises Expenses

  • Kunal

    My takeaway from making these charts was that colleges and universities rely on a ton of different sources of revenue, and spend their money in a ton of different places. It’s not simple tuition -> instruction model.

  • Andrew Somerville

    A graph over time would be an order of magnitude more useful than a pie chart.

  • Anon

    Any idea on what a chart for a for-profit college/school would look like? I would be very interested in seeing how it pans out, as many people are split on the notion of for-profit schooling.

  • Reggie Cook

    I’ll tell you where that money goes, to the devil or Scrooge McDuck, while we go bankrupt they’ll buy yatchs, mansions and fancy cars, and us lumps of coal, I’ll never pay for some bogus “financial school” ever!

  • shellaavila112

    My colleagues wanted CA FTB 592 this month and located a great service that has 6 million forms . If people need CA FTB 592 too , here’s

  • Andrew

    So if you want to go to a cheaper college, pick one that isn’t focused on sports.

  • czarnajama

    The division of expenditures shown here is not the way it works. Rather, you need to consider salaries, wages and benefits, and the various operating costs and capital investments. There is no explicit billing of university workers’ time according to whether it goes to instruction, research and the other categories in the third and fourth pie charts. Of course, there is evaluation of how a university worker brings in money, e.g. research grants, contracts, and how much students want that worker’s services, but I contend there is no way to properly account for how much goes into each category of a university’s expenditure, even if there are official guidelines (e.g. a professor’s time being 40/40/20 teaching/research/administration).

    One unmistakable trend over the past fifty years in Canada and the US is an ever increasing size of the slice dedicated to administration (e.g. institutional and academic support in the pie charts). When asked about this, administrators usually blame government regulations requiring ever more reporting.