Director: Daniel C. Levy

Western New York Private Colleges Rely on Tuition

(Entry by Mary Beth Collier)

PROPHE Summary:

This article discusses a trend among private colleges in Western New York State that is reflective of many other parts of New York and the US as a whole. The majority of private colleges and universities in the state depend primarily on tuition and other student fees for their operation revenues; about half of them report tuition revenue to account for 75% or more of their revenues. Government grants are minimal. Broadly criticized for large annual tuition increases, these institutions argue that because they increasingly subsidize student tuition with institutional grants and other types of financial aid, and that they are actually receiving little more net money. An increasing number of low and moderate-income students have enrolled in these institutions as they find the actual cost of attendance to be competitive with that of public institutions in light of financial aid packages.

For the full story see Business First of Buffalo, December 6, 2004, "Fee, tuition drive budgets of WNY's private colleges," by Tracey Drury.
http://buffalo.bizjournals.com/buffalo/stories/2004/12/06/story3.html

PROPHE Observation:

The trends and concerns expressed by these colleges in Western New York are quite reflective of the economic realities of a broad majority of private colleges in the US. This is particularly true of those founded after WWII that tend to have smaller endowment bases than older institutions, which have larger alumni bases and are more likely to have elite status and the economic strengths that accompany it. Abe Lackman, president of New York's Commission on Independent Colleges and Universities, estimates that most private colleges are funded with about 70 percent of revenues coming from tuition. While these colleges are providing access to more diverse and economically challenged students, they are also supporting institutional enrollment levels through institutional financial aid grants. This type of tuition discounting, combined with inflationary operational costs and limited government funding, leaves many private college and universities in challenging financial circumstances.