Education,  Finances

How Do Colleges Spend the Tuition You Pay?

College can definitely be a good and smart investment for many people, but the tuition costs, which have risen dramatically in recent years, can make it difficult. One of the things you might not know is how a college actually spends that tuition, however. When you don’t know a lot about the tuition costs, you might be less likely to consider spending money on colleges. If you’ve ever thought about what your college tuition actually pays for, here’s what you should know.
What Does Your College Tuition Actually Pay For?

Average Tuition Costs Between Public and Private Schools

As you start to look into tuition costs, one thing you’ll definitely notice is that they’re different for public and private schools. In fact, this difference can be extremely significant.

For the 2019-2020 school year, the College Board reported on average tuition costs for both private and public universities. Full-time students at an in-state school reported an average of $21,950 per year for everything, including room, board, and fees, which still adds up to a staggering $87,800 for a four-year degree. However, a private college was over twice as expensive at $49,870 per year — $199,480 for a four-year degree.

Of course, this isn’t exclusively about tuition, as it also includes other elements like room and board, which might be more expensive at a private college. However, the largest discrepancy is actually in salaries and instruction expenses; where public colleges spend an average of $5,987.96 of your yearly tuition costs on salaries, private colleges spend an average of $15,315.08.

$100 of Tuition

One useful way to think about tuition budgeting is to think about it in terms of $100 of your tuition money. When you pay $100 to the college, how does the college use it? Here’s the average breakdown of $100 of your tuition money.
● $15.81 – Salaries
● $15.58 – Hospitals and Healthcare
● $11.66 – Research
● $11.47 – General Instruction Expenses
● $9.61 – Auxiliary Student Enterprises
● $8.26 – Academic Support
● $8.15 – Institutional Support
● $6.25 – Other, Including Taxes and Liabilities
● $4.75 – Student Services
● $4.52 – Public Services
● $3.41 – Grants and Financial Aid
● $0.53 – Independent Operations
These are all important elements of running a school, although some may be more directly related to education and some may be less so. It’s a good thing to keep in mind, at the very least.

Tuition As a Percentage of Income

If you didn’t already know, colleges don’t use tuition as their sole source of income. Public colleges typically have some government grants, while private colleges generally utilize endowments from alumni. Looking at the percentage of a college’s income that comes from tuition is an interesting way to track tuition trends.

For example, when it comes to public universities, the year 2000 saw tuition making up only 29.2% of general revenue. However, by 2018, this number had skyrocketed to 46.6%. Tuition also rose by more than 25% in the last decade, which may have had an impact on that change.


Knowing more about how colleges spend your tuition can sometimes make it easier to choose whether you want to attend college in the first place. Plus, it can make it easier to have conversations about the tuition process. No matter what you want to do with college and tuition, having this information can be beneficial for you at the very least.

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