Former College President Explains the Funding Strategies Behind Universities | WSJ

Colleges and universities need a lot of money to operate—and how they get that money is complicated as wealth disparity in higher education is massive. Five schools—Harvard, Stanford, Yale, Princeton and the University of Texas—make up a quarter of the U.S.’s 839 billion endowment dollars. So how do smaller institutions afford to stay afloat?

Former Northwestern President Morton Schapiro breaks down the finances and shows how university funding has changed in the last few years and what that change means for the future.

Chapters:
0:00 Wealth disparity
0:55 Endowment
3:14 Tuition
5:23 State appropriations
8:01 What’s next?

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#College #Tuition #WSJ

[timogul]

I'd really like to see an equally deep dive into school _costs._ How much do schools spend on teachers, administrators, facilities staffing, real estate, materials, etc.

[jloiben]

I mean most large schools are mainly just hedge funds with a nice little education business on the side

[papa_pt]

Northwestern is so wealthy, hardly depends on tuition, and yet continues to charge crazy tuition and spend only a small % of those billions on the students and faculty

[Hyp]

It's funny how only 16% of students paying full tuition in 2020 vs 29% in 1996 is framed as being a positive outcome, when it's obviously due to the fact that more people could actually afford tuition in 1996. Accounting for inflation Northwestern tuition went up roughly 70% in that time--are college students learning 70% more? I don't think so.

[greg]

To bad you did not have the courage to discuss the ballooning price of excess administration. Cut the administration by eighty percent, getting it back to historic norms, and solve the tuition problem instantly.

[davidnadaud]

Seen from Europe, where the University budgets are almost never above 8 figures, one can't help but think that the US universities offer a pretty poor ratio of academic production per dollar spent. I mean, the the academic level isn't superior to that in Europe, and both what the colleges pay per student and what the students pay per year is far superior (multiples!) from what's spent in Europe.
In a way it's similar to the Health system spend per Patient...

[sriig]

6:53-54...some Georgia state treasurer, I forget who, outright said on record, "out of state kids keep our state schools' lights on"

[willshumway]

The statement about the percentage of students paying the full endowment in the 90s versus now is really misleading as it doesn't take the increase in the tuition cost increase corrected for inflation. People are paying more than they ever have for college, even now

[makeitmakesense]

Wild keeping the country broke and uneducated is wild

[christophscholz]

Medical centers plus grants and contracts is almost 1/2 of the UC system revenue! In other words, almost 1/2 of the revenues comes from graduate programs. Yet this piece only analyzes endowments and tuition. Zooming into this part of the academic industry might be a good follow-up piece?

[samschumacher]

Morty (president in this video) was truly a class act - out on campus, tons of face time with students at all levels. He’d show up to dorms and just chat at scheduled times. Proud to see him speak on this topic.

[x-men-]

Since when university is about money not education?

Finally someone tries to help people understand tuition is just a piece of the puzzle.

[docsays]

They forgot to mention all the frivolous lawsuits they payout each year!

I worked in HR dept for a large public college & in any given moment we had 10-20 active lawsuits. The legal would always payout to avoid going to court.

[vsk]

looking at state funding as a % of total funding paints an incorrect picture since it's impossible to know how much state funding increased or decreased and that relationship with inflation. could be that the total pie increased due to more tuition intake or larger endowments

[somaghosh]

Good topic, many information, thank you WSJ.

[SahilShirazee]

I think you guys missed talking about the lack of expansion of freshman seats in colleges.

[cursorsequence]

Wells college in the Finger Lakes of NY just announced today after 156 year that it will be closing.

[Eoin-B]

Where is the money from patents and papers? Here in Ireland, it's mostly part state and part funded by postgrad output as well as the smaller €2500 per student.

[electricaltimelapsetest]

I got my ged in jail in 2003, 2016 I sobered up and now I'm a journeyman electrician and I make 120k a year in seattle. Not bad.