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Noodle Staff
Noodle Expert Member

December 18, 2019

While public higher ed institutions are increasingly relying on tuition, private universities are get more money from the interest on endowments and generous alumni donations.

Private universities are often thought of as rich institutions, in large part because of the expensive costs of attending these schools.

Interestingly, however, there has been a trend showing that private institutions are relying less on their revenues from tuition, and more on interest from endowments and generous alumni donations. Public universities, on the other hand, have become more dependent on their tuition income. It is no surprise then, that we see increases in price for public universities, for both in and out-of-state students.

Nonetheless, both private and public universities rely on other factors to fund all of the diverse projects they take on. A recent study by reports the percent breakdown of schools' revenues (divided into three categories: Public Universities, Private Not-For-Profit Universities, and Private For-Profit Universities).

In general, most of the 4 year on-campus colleges fall into the public or not-for-profit categories and the data on these schools' revenues may be surprising:

-Private schools depend on tuition for about a quarter of the total income while for public schools it accounts for about 17%.

-The key difference between public and private institutions is the government support, or tax dollars, which are given to public universities and account for about 40% of their revenues.

-Private universities make up for this difference by investing their endowments. Return from these invesments accounts for about 30% of their revenues.

Which revenue system seems best to you? (Remember that both private and public colleges were negatively effected by the recession.)