Are You Paying Colleges Too Much?

MEAN2b:  Do a break-even analysis on a college class.  The typical college professor teaches seven classes and we’ll pay the “mythical professor” $50,000/yr or $60,000 or $80,000/yr [do all three scenarios].  Based on your tuition and average credits, develop a spread sheet that calculates break-evens at various size-levels.  Assume there is no other fixed cost than the professor’s salary [even though there is in the real world].  Then assess the findings of your model.  How do colleges “make money?”

After figuring out how many students were required to break even for a professor’s salary I was surprised at the little number of students it took. I don’t think that this research validated an accurate break even analysis. The above chart shows that the university is making a great deal of money off tuition when, in reality, a university has daily costs they must consider. The university has many other costs besides a professors salary that they have to budget. The more students in a class allow the university to make more money but the primary source of revenue is most commonly not tuition. Private schools don’t have the luxury of getting state funding like public schools which required private schools to rely on private funding and break even for professors’ salaries with the cost of tuition. By adding more students to a class the professor would, in reality, be making far beyond what the break even anaylsis suggests. Bethel relies primary of alumni and outside sources for their main source of revenue which also alters the estimated numbers. This MEAN assignment helped me to realize why private school tuition is much more costly then public school tuition and how, when I am rich and powerful, should donate lots of millions of dollars to Bethel.

For students who read this in 2032, you will be carrying on a conversation in the Tiffany Grounds that was named after me when I donated multi-millions to the expansion of Royal Grounds.    


Blessings,
Tiffany