Undergraduate program revenues compared

Introducing the new CTAS report on net tuition revenues by program

Due to accounting differences in financial reporting practice, pulling figures from IPEDS will not accurately allow you to understand undergraduate net tuition revenues.  And school financial statements often commingle undergraduate and graduate revenues. To help higher ed easily and quickly compare program sizes by school, CTAS is introducing a new working report providing estimated undergraduate program tuition-generated revenues for almost 3,000 individual programs estimated for 2018/19 and forecast for the upcoming 2021/22 year. The report is organized by state and includes all 2- and 4-year colleges with enrollments above 1,000 full-time equivalent students (FTEs). Besides total revenues, tuition per FTE is also estimated for both 2018/19 and 2021/22, which indicates significant differences in the revenue generating power between schools.

Estimating revenues from higher ed’s largest business segment, undergraduate programs, can be approached in several different ways.  We did so in the most direct way possible: multiplying net tuition by a college’s self-reported full-time equivalent students (FTEs) which factors in part-time students as a fraction of full-time to arrive at a comparable enrollment basis.  Net tuition includes full-list tuition and fees less institutional aid, using enrollment splits between in- and out-of-state US students and international students.  Revenue includes grants from the government, including Pell grants, and student loans.  Online programs, often offered for a lower price, also require a revenue adjustment. Revenues do not include residential housing and board, ancillary fees such as retail sales, and athletic department revenues.  We will take a look at those figures separately in the future.  Net tuition revenue is just part of the pie, but it is the biggest part of the pie.

The report will allow you to easily understand the surface tuition features of a state's undergraduate system. To take an example, the Oklahoma higher ed system is very representative of the US as a whole. The chart below is extracted from the working report and shows a typical pattern:

1) A flagship state school, the University of Oklahoma (OU), with easily the largest revenue of any Oklahoma college.

2) A secondary large state school, Oklahoma State (OSU), with a large revenue base but one that generates somewhat less per student than OU. One of the important drivers here would be of course out-of-state enrollment (Oklahoma enrolls an average of 40% of its entering students from out-of-state, while Oklahoma State manages a very respectable 35%) with higher Cost of Attendance also contributing to the difference.

3) A set of small private schools with high per student revenue. The private University of Tulsa is a informative example. It generates the second highest amount of net tuition revenue per student in the state, admits 41% of applicants and enrolls about 800 freshman each year, roughly evenly split between Oklahoma residents and out-of-staters.

4) A small and not financially-powerful community college network. Oklahoma has a well-developed set of CCs which enroll almost 35,000 FTEs. Despite the fact that their enrollment is almost as large as flagship OU and OSU (combined ~41,000 FTEs), their revenue is about a quarter of those two schools (we project it to be 26% of OU + OSU in 2021/22). This is a glaring pattern repeated in many states. And this is before the significant other revenues that big state 4-years enjoy -- from prominent athletic programs to big residential systems to graduate and health services programs -- which CCs generally do not. The US community college product is gradually being rejected by students and seeing the revenues of various higher ed segments compared side-by-side brings home the financial consequences.

Intended to provide higher ed professionals, researchers and government officials with a more transparent and convenient way to track competitor revenues and overall industry trends, the report will help illuminate the intensely price-sensitive market for undergraduate education.  Because of the complexity of college financial reporting, this report is a “working paper”, a report making progress towards a goal.  There is no doubt that some of the numbers here will need to be corrected, both due to quality issues with historical data and because of future unanticipated economic changes.  To help us do this, we encourage you to provide feedback to workingproject@collegetuitionadvisoryservices.com .  CTAS intends to make its numbers as accurate as possible, so we welcome your input and will work with you to resolve questions.

Find more about this subject and other higher ed topics at our CTAS website.