Where Does College and University Funding Come From? Where Does It Go?

Abstract

It’s important to understand the finances of colleges and universities, budgeting, and sources and uses of funding. Costs at colleges and universities are increasing for a variety of reasons. Some costs involve facilities intended to attract talent, both in terms of faculty and students. Many costs involve people who do not teach, such as administrators. These individuals are doing work that is either required (government compliance) or expected (student mental health or career counseling). So, it is a stretch to sustain the argument that rising costs in higher education are singularly a function of unnecessary layers of administration. Many universities are using innovative approaches to cut costs and improve revenue streams to their institutions.