Profile of Online Programs in Private Colleges: From College to University with a Click
Academic Leadership - Online Journal,
Vol. 6 No. 1 (2005): Vol-6-Issue-1-January-2005
Private higher education institutions have traditionally relied heavily on tuition revenues for their
operation. Historically, these colleges have realized 80-90% of their operating revenue through tuition
funding, making them reliant on their ability to attract and retain tuition-paying students (Gansemer-Topf
& Schuh, 2006). This means that they are not only more tuition dependent than their public university
counterparts (Summers, 2004), but that they must forecast expenditures and revenues with tremendous
Higher education has not, however, remained stable in terms of their operations and expenditures.
Areas such as energy costs have more than tripled (Blumenstyk, 2006), technology-related
expenditures have moved from luxury items to necessities (Lu, 2003), and campus infrastructure,
including both traditional capital construction and what has become known as the ‘campus arms race’
to beautify campuses have dramatically increased operating costs. To some extent these expenses
are cyclical, meaning that in order to attract and retain students, more resources must be invested into
campus facilities and offerings (both course and co-curricular offerings), thus increasing expenditures
while also bringing more students to campus paying tuition.