Revenue differences between public and private universities

Financing Higher Education: Discussion Questions

What are the major differences between private and public universities with regards to revenue streams? Revenue streams in public universities come from various different areas, and they are generally based on indicators that show how the university is performing, but the problem is that there are often too many indicators (Layzell, 1998, p. 105). According to Alexander, (n.d., p. 219), the use of vouchers and student aid grants are also a serious concern when it comes to revenue. Schools that are not performing well need more money, and when students go elsewhere these low-performing schools are further harmed.

Vouchers are generally fine for private schools, but they can be disastrous for public schools and how many students they are able to attract and keep -- which is directly related to how much money they are generally given through Federal student loans (Hearn, n.d., p. 153; Breneman & Finney, n.d., p. 162). Both Hauptman (n.d., p.119) and Hauptman and Crop (n.d., p.128) both indicate that private schools, which are not regulated in the same way that public schools are, generally have more revenue because they do not have to rely on the state or federal funding as their primary revenue-generating source. These tuitions have increased their tuition fees, as have many public universities.