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Where does the MONEY GO?

Only between 27%-33% of their budget from public and private colleges respectively goes to instruction, where does the rest of the money go?

Photo of Patricio Toussaint
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I was always concerned about how do universities spend their money. Doing a research I found out that only between 27%-33% of the money from public and private universities respectively goes to instruction. This means that basically 1/4 of the expenditures goes to teachers. 

I made an interview with the VP of Finance of my college and realized that some of the numbers matched with what I found. The second biggest percentage of expenditure from universities is Institutional Support, this means the general administration and management. Doing research I found that around 14% of the budget goes to administration costs. If there is a university that only teaches online will this % reduce significantly? Surprisingly a 11% of private universities goes to research, this means funding to research institutes, laboratories and individual research. Adding up the last two percentages just mentioned it is pretty close to the percentage that goes to teachers and instructors. If we add 33%, 14% and 11% this adds up to 58% this is a HUGE expenditure impact for universities. Are there any ways to reduce this percentages in order to reduce the costs? 

The information provided from Public Universities changes from Private universities. A 27% goes to Instruction purposes, such as professors and instructors. A 12% goes to research and surprisingly a 11% goes to Hospital Services. This surprised me since a large % of the expenditures from universities goes to expenses at a university affiliated hospital. For this big % does the university has an obligation for this expense? Is there a way the government could help reduce this %?

I think we really need to understand the expenditures of the universities since it is a crucial way in order to reduce their costs, and as a consequence impact the student's cost. 


What is a provocation or insight that might inspire others during this challenge?

Where can Universities be more efficient? How can Universities change their way of doing things into a more creative and innovative way?

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Pay As You Go

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Photo of Bettina Fliegel

Hi Patricio.
University teaching hospitals that are within the public sector are government funded. This funding can come from city, state and federal governments. Students that attend medical schools affiliated with these hospital systems, city and state university medical schools, pay much lower tuition than they do at private university affiliated medical schools.

Public universities are government supported. Decreased state funding is one of the big reasons that costs have gone up at public universities in the US. Whether that can change - ??? Perhaps another approach is to look at the funds that are available and reallocate them in some way so that funds are available to assist students in need - increasing funds for need based financial aid.