In 2006-07, student tuition accounted for 17 percent of the total revenue for public institutions, 26 percent for private not-for-profit institutions, and 88 percent for private for-profit institutions. State appropriations (24 percent) were the largest source of revenue for public institutions.

This indicator compares the revenues and expenses for public, private not-for-profit, and private for-profit postsecondary institutions. While detailed comparisons of financial data cannot be made across these sectors because of differences in accounting and data collection procedures for some categories of items, some general patterns can be observed. In 2006-07, student tuition and fees accounted for 26 percent of the total revenue for private not-for-profit institutions and 88 percent for private for-profit institutions (see table A-46-1). State appropriations (24 percent) were the largest source of revenue for public institutions, while tuition and fees (17 percent) constituted the second largest single revenue category. Private institutions report most federal student financial aid as tuition or auxiliary enterprise revenue (college housing and food services) rather than as direct revenue from the federal government. Public institutions report federal financial grant aid as federal grant revenue, although loans supported through federal programs are reported as tuition or auxiliary enterprise revenue.

In 2006-07, public institutions spent $239 billion ($26,062 per student in 2007-08 dollars) (see table A-46-2). About 28 percent of this amount, $7,332 per student, was spent on instruction. The remaining funds were spent on other activities ranging from research (10 percent) and teaching hospitals (9 percent) to various types of services for students and the public, including public service (4 percent), student services (5 percent), and auxiliary enterprises (8 percent). Items more directly related to the administration of institutions included academic support (7 percent) and institutional support (8 percent). The expenses per student for public institutions were 3 percent higher in 2006-07 than in 2003-04, after adjustment for inflation.

In 2006-07, private not-for-profit institutions spent $125 billion (about $43,619 per student in 2007-08 dollars). About 33 percent of this amount, $14,436 per student, was spent on instruction. The percentages of the budget spent by not-for-profit institutions on some categories of expenses—such as research (11 percent) and hospitals (8 percent)—were similar to the percentages spent by public institutions. For public service, the percentage for not-for-profit institutions (2 percent) was lower than for public institutions (4 percent). About 9 percent of the total spent at not-for-profit institutions was for academic support, and 14 percent was for institutional support. Part of the difference between revenues and expenses for 2006-07 was due to the size of the revenue from investments ($19,578 per student) (see table A-46-1). These revenues may be volatile from year to year, affecting not only the amount of revenue from investments per student, but also the total revenues and the percentage distribution of the sources of revenues. The expenses per student for not-for-profit institutions were 3 percent higher in 2006-07 than in 2003-04, after adjustment for inflation.

In 2006-07, the expenses of private for-profit institutions amounted to $12 billion (about $13,357 per student in 2007-08 dollars) (see table A-46-2). About $3,170 per student, or 24 percent of total expenses, was spent on instruction. About $8,529 per student (64 percent of total expenses) was spent on a major grouping—made up of student services and academic and institutional support—that includes a wide range of administrative costs plus the profit of the institution.

Technical Notes

Academic support includes services that directly support an institution's primary missions of instruction, research, or public service, such as libraries, galleries, audio/visual services, academic computing support, ancillary support, academic administration, personnel development, and course and curriculum development. Institutional support includes general administrative services, executive direction and planning, legal and fiscal operations, and community relations. Student services include expenses associated with admissions; registrar activities; and activities whose primary purpose is to contribute to students' emotional and physical well-being and to their intellectual, cultural, and social development outside the context of the formal instructional program. Examples include student activities, cultural events, student newspapers, intramural athletics, student organizations, supplemental instruction (such as remedial instruction), counseling, financial aid administration, and student records. Revenue from endowments can fluctuate from year to year. For example, see negative revenues for investment return for years 2000-01 and 2001-02 in NCES 2009-020, table 353. For more information on the Integrated Postsecondary Education Data System (IPEDS), see supplemental note 3.