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Expenditures

Question:
How much do colleges and universities spend on students?

Response:

In 2015–16, postsecondary institutions in the United States spent $559 billion (in current dollars). Total expenses were $355 billion at public institutions, $189 billion at private nonprofit institutions, and $16 billion at private for-profit institutions. Some data may not be comparable across institutions by control categories (i.e., public, private nonprofit, and private for-profit) because of differences in accounting standards. Comparisons by institutional level (i.e., between 2-year and 4-year institutions) may also be limited because of different institutional missions. The instructional missions of 2-year institutions generally focus on student instruction and related activities that include providing a range of career-oriented programs at the certificate and associate’s degree levels, and preparing students for transfer to 4-year institutions. Four-year institutions tend to have a broad range of instructional programs at the undergraduate level, leading to bachelor’s degrees. Many 4-year institutions offer graduate-level programs as well. Research activities, on-campus student housing, teaching hospitals, and auxiliary enterprises can also have a substantial impact on the financial structure of 4-year institutions. In this Fast Fact, expenses are grouped into the following broad categories: instruction, research, public service, academic support, student services, institutional support, scholarships and fellowships, auxiliary enterprises, hospitals, independent operations, and other.1

Instruction, including faculty salaries and benefits, was the largest single expense category at public and private nonprofit postsecondary institutions in 2015–16, accounting for 30 percent of total expenses at public institutions and 32 percent of total expenses at private nonprofit institutions. At private for-profit institutions, the largest single expense category was the combined category of student services, academic support, and institutional support, which includes expenses associated with noninstructional activities, such as admissions, student activities, libraries, and administrative and executive activities. At private for-profit institutions, these expenses accounted for 63 percent of total spending. By comparison, student services, academic support, and institutional support made up 24 percent of total expenses at public institutions and 30 percent of total expenses at private nonprofit institutions.

Combined expenses for research and public service (such as expenses for public broadcasting and community services) constituted 14 percent of total expenses at public institutions, hospital expenses accounted for 13 percent, and auxiliary enterprises (e.g., self-supporting operations, such as residence halls) constituted 9 percent of total expenses in 2015–16. At private nonprofit institutions, combined expenses for research and public service constituted 11 percent of total expenses, as did hospital expenses; auxiliary enterprises constituted 9 percent of total expenses. At private for-profit institutions, combined expenses for research and public service accounted for less than 1 percent of total expenses and auxiliary enterprises accounted for 2 percent of total expenses.


Percentage of total expenses at degree-granting postsecondary institutions, by control of institution and purpose of selected expenses: 2015–16

The data in this figure is described in the surrounding text.

# Rounds to zero.

NOTE: Degree-granting institutions grant associate's or higher degrees and participate in Title IV federal financial aid programs.


In 2015–16, total expenses per full-time-equivalent (FTE) student were higher at private nonprofit 4-year postsecondary institutions ($56,401) than at public 4-year institutions ($44,009) and private for-profit 4-year institutions ($16,208). Expenses per FTE student in this Fast Fact are adjusted for inflation using constant 2016–17 dollars, based on the Consumer Price Index (CPI). For instructional costs, private nonprofit 4-year institutions spent 44 percent more per FTE student ($17,996) than public 4-year institutions ($12,539) and 336 percent more than private for-profit 4-year institutions ($4,127). Similarly, for the combined expenses of student services, academic support, and institutional support, private nonprofit 4-year institutions spent $16,931 per FTE student, which was 79 percent higher than the amount spent at public 4-year institutions ($9,483 per FTE student) and 60 percent higher than the amount spent at private for-profit 4-year institutions ($10,588 per FTE student). Expenses per FTE student for research and public service were much higher at public ($7,306) and private nonprofit 4-year institutions ($6,339) than at private for-profit 4-year institutions ($20). Among 2-year institutions, private nonprofit institutions and public institutions spent more per FTE student on instruction ($6,646 and $6,322, respectively) than did private for-profit institutions ($5,374).

1 For private for-profit institutions, hospital expenses are included in the “other” category.

SOURCE: U.S. Department of Education, National Center for Education Statistics. (2018). The Condition of Education 2018 (NCES 2018-144), Postsecondary Institution Expenses.

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