ULS Lecture - How Does the Financing of a University Work?

The fact that I can not get financoal aid or scholarship from school made me curious about how CMU spends money and operates school programs. For that reason, Deborah Moon's lecture about how the financing of a University(CMU) work was very interesting topic for me. Firstly, Ms. Moon explained that increases in tution directly leads to the increase in the financial aids that CMU can offer for the needed studetns. Also, she inroduced CMU's unique system of collecting tution, 'Step Increase'. Step increase means that when CMU decides to increase the tuition rates, the rate of increase for the lower classmen is always higher than the rate of increase for the upperclassmen, regarding the social contract between school and the upperclassmen. Ms. Moon did not explicitly explain what those social contracts are, but I was suprised the fact that lower classmen have to pay higher tuition than the upperclassmen do. Another interesting fact was that the government funding that CMU recieves (Department of Defence) takes extremely important role in supporting entire school. Government funding is common for other Universities as well, mainly from Department of Education, etc. However, the funding that the Universities can receive from the Departments except Department of Defence has certain limit which does not allow flexibility. In contrast, the funding from the Department of Defence can be flexible based on the Universities' need. Therefore, it was interesting that CMU can get flexible and enough supports from the government agencies. However, the fact that support from endowment is extremely low bit depressing. Although CMU is one of the greatest schools in the nation, the fact that CMU can not depend too much on endowment like other Universities (IVY League Universities) made me think that CMU would need more advertising to increase awareness among alumni.