Discuss the similarities and differences in costs (expenditures) between for-profit and not-for-profit institutions.
Topic: Costs and Expenditures in Higher Education
Discuss the similarities and differences in costs (expenditures) between for-profit and not-for-profit institutions. Why does running a college or university cost so much? What are some potential solutions to lower the cost without raising tuition excessively? For the Christian budget officer, what biblical principles shed light on how to manage finances and plan effectively? In your replies, suggest additional biblical principles that can guide Christians who work in finance offices at colleges and universities.
Reply 1:
Both for profit and not-for-profit higher education institutions strive to provide students with a high-quality education. How they go about this is quite different. One difference between nonprofit and for-profit institution expenditures is that for-profit colleges typically omit general education courses (Weidman et al., 2014). Their main goal is to fast-track students on a specific career path, so they only require courses tailored to the chosen occupation. Being very cost-conscious, for-profits are not concerned with spending money on a student’s social experience. Share-holders and investors expect a profit, so some for-profit institutions merely rent a space in an office building and offer all their courses online (Non-Profit vs. For-Profit Colleges, 2018). These universities cannot afford any deficits, and programs and departments that do not turn a profit are quickly cut. If finances get tight, for-profits will not hesitate to raise tuition.
While share-holders are the primary focus of for-profit universities, nonprofit institutions aim to please students first. From dormitories to job fairs, non-profit institutions seek to provide a well-balanced, personal experience. Students typically have access to a variety of support services and have ample options to join clubs and sororities. Nonprofits allocate plenty of resources to make their campuses attractive to applicants.
Running a college or university is very expensive. The most money (89%) is spent on operational costs including “instruction, administration, research, libraries, dormitories, cafeterias, and other student or faculty services” (Higher Education Expenditures, 2018). The remaining 11% is used for equipment, maintenance, and construction (Higher Education Expenditures, 2018). Potential solutions for lowering costs of higher education fall primarily on the state. Baum (2018) says that because the cost of living, college tuition, and available financial aid vary from state to state, college affordability depends on where you live. Some states have created a “free-tuition” program for low-income students, but often the cost is transferred to those who didn’t qualify for financial help. She suggests that many students suffer more from daily living expenses than tuition because they are unable to work full-time jobs while also being enrolled as full-time students. This is where higher state grants could help tremendously.
A Christian budget officer can look to Luke 14:28-30 (ESV) to manage finances and plan effectively. It states, “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ The Lord gives wisdom to all who ask (James 1:5). Through prayer and the Holy Spirit, a budget officer (and any professional) can make sound decisions for the public that will prosper them.
Reference
Baum, S. (2018, December 27). States can lead the way in making college affordable. Retrieved from https://www.urban.org/
Higher Education Expenditures. (2018, April 20). Retrieved from https://www.urban.org/
Non-Profit vs. For-Profit Colleges. (2018, January 05). Retrieved from https://www.
Weidman, J. C., Yeager, J. L., Cohen, L., DeAngelo, L., DeLuca, K., Gunzenhauser, M., . . . Sutin, S. (2014). Economics and finance of higher education. Boston, MA: Pearson Learning Solutions.
Reply 2: Grant
In recent years there has been an unprecedented rise in the cost of higher education. With state budgets facing cuts from the federal level, students are now forced to absorb the additional cost associated with funding their education. This practice has become known as, from state to student due to the fact that the states are passing the cost down to the student. One explanation is that in the 21st century rather than state governments absorbing the cost, the students are now burdened with the responsibility to cover costs. On the upside colleges have seen a surge in enrollment from 1980 to 2012 going from 53% to 94% (Jackson, 2015). With more students enrolling, then comes the necessity to increase cost in two ways; colleges hire more administrative staff and state and federal expenditures per students are lowered. When state and federal cuts are made, then the burden is placed on the student and their families.
Student loan debt for those pursuing in higher education has eliminated the opportunity for the lower and middle-class and is forcing them to readjust their plans and goals. High tuition means fewer families can gain the training and education they need to grow and prosper in their communities. Traditionally under-served students, as well as families from deeper into the middle class, find it a struggle to afford a college education (Mulherm, Richards, & Wu, 2015). The states are struggling with substantial budget shortfalls, a consequence of the lagging economy of 2008. A major difference with private versus public institutions is the funding sources. In private education, they have large donors that provide substantial gifts to schools of their choice. In addition, many private institutions have large endowments that the school has at their disposal to use for such things as; research, expansion opportunities and various campus operational cost. The public institutions receive their finances through state and federal funding as many of them were founded by state governments. Another difference between private and public colleges is their size and the number of degrees they typically offer. Private colleges tend to be much smaller than public universities and may have only a few thousand students. Public universities and colleges can be big and some are huge. One example of a large public university is Ohio State University, home to over 50,000 students (Jackson, 2015).
References
Jackson, A. (2015). how quickly higher education cost have skyrocketed since 1980. Business Insider.
Answer preview Discuss the similarities and differences in costs (expenditures) between for-profit and not-for-profit institutions.
APA
994 words