Show Me the Money! A Look at College Revenues
Higher Education is a half-trillion dollar business in the United States. That is big money. To put this in perspective, consider the following:
If you stack a half-trillion worth of $1,000 bills together:
- 1 million dollars = 4 inches high
- 1 billion dollars = 364 feet high
- 500 billion dollars = 32 miles high
- Equates to $4,500 per household in the US.
- If you earn $40,000 a year, it would take you about 13 million years to earn $500 billion.
This is big business. In the graphic below, EPI shows you where the money comes from (or from whence the money flows...).
The revenue collected by public, non-profit institutions dwarfs that of any other sector. Public non-profits brought in $328 billion in 2012-13, compared to $202 billion for private, non-profits, and $25 billion for private, for profit institutions. Some of the major differences between the sectors include:
- Publics pocketed 72 billion in state funds (23 percent of total), while the state funds attracted by the other sectors were negligible.
- Public and private, non-profit institutions collected the same dollar amount of funds from tuition, but different percentages of total. While 21 percent of public institution revenues came from tuition and fee charges (69 billion), one third (33 percent) of private, non-profit funds came from tuition and fee charges (67 billion). Comparatively, 90 percent of private, for-profit revenue came from tuition and fee charges.
- The federal government provided 16 percent of the total revenues to public institutions (52 billion), 12 percent of private, non-profit revenues (24 billion), and 4 percent of private, for-profit revenues (1 billion).
- Next to tuition, investment returns were the highest revenue earner of private, non-profit institutions, compared to 15 percent of public institutions and only 2.5 percent of private, for profit institutions.
- Only public institutions received significant revenue from local institutions (6.6 percent or 22 billion).
SOURCE: Snyder, T.D., de Brey, C., and Dillow, S.A. (2016). Digest of Education Statistics 2014 (NCES 2016-006). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC.Figures 17, 18, and 19.