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

I too attended the How Does the Financing of a University Work lecture and learned some interesting facts about Carnegie Mellon's current money and budgetary decisions. Like Tae mentioned the step function was introduced as a model where current students, whom the University staff looks at as having a "social contract with", are expected to shoulder less of a burden of an increase in tuition then the incoming class. Regardless, of these unbalanced costs Ms. Moon showed graphics displaying relatively constant percentages of total revenues generated by individual categorical breakdowns. By this she mentioned that the percentage of total revenue generated per year for the University from tuition remained relatively constant at around 34-36% even though total revenue had almost doubled over the span of 10 years. While financial aid increases relative to the cost of tuition, only 20-30% of undergraduate costs are paid by financial aid, demonstrating that a constant increase of financial aid with tuition still falls far short of many peer institutions. Another interesting fact was the fact that the total cost of educating an undergraduate student at Carnegie Mellon is roughly $65,000 well short of the roughly $50,000 tuition collected by the school, leading to a net loss of $15,000 which the school must recover elsewhere. Ms. Moon also briefly discussed the role of endowments and how they encompass 5% of total revenues, compared to 40% at ivy league schools. She reiterated the point that since endowments are so low the school is less affected by a downturn in the economy, meaning that Carnegie Mellon only has to cut $16 million from their budget vs. $300 million for comparative schools.