Biggest undergrad programs by revenue

Looking at college Gargantuanism through $ instead of students

Our recently-introduced overview of undergraduate program net tuition revenues gives a different perspective on college rankings, which are typically ranked by enrollment and academic metrics.  Due to accounting differences in financial reporting practice, pulling revenue figures from IPEDS is inaccurate and unwieldy.  And school financial statements often commingle undergraduate, graduate and medical center revenues.  To help higher ed easily and quickly compare undergraduate revenues by school, this new working report estimates net tuition revenues for the 2018/19 reporting year and forecasts it for upcoming 2021/22 academic year using our pricing and enrollment forecasts.  Using the report, we can easily find the biggest programs in the US by revenue.  The biggest school in the US: NYU!  (And it isn’t close.)

The rest of the top 20 consist of large public state schools, three of the big national onlines and some big and prosperous private schools. In fact, four of the top 7 revenue-generators are private non-profits: NYU, USC, Cornell and Boston University.

New York University tuition revenues

New York University

What about the other revenues associated with undergrad programs? This is difficult to provide and compare but, to give a rough idea, we present the table below – showing 2018/19 net tuition along with ancillary revenues from residential housing, athletic department, retail and other revenues — with caveats.  It provides additional color on the size of these organizations, but the two types of revenue are different in character  – some should be partly allocated to graduate programs, are sometimes completely non-educational in nature (such as those from licensing deals) and depend on local housing costs. Understanding how they contribute to the actual academic program’s finances is also complex and hard to understand without intimate knowledge of management accounting practices at individual institutions.   With these caveats, it shows that 6 colleges have undergrad programs that are $1 billion+ businesses: NYU, Boston University, USC, Penn State, Ohio State and Michigan.


(Now you know why Urban Meyer, the former coach of the Ohio State Buckeyes, was estimated to have been paid close to $40 million for his seven seasons in Columbus.)

Organizational and reporting structure have an impact on this ranking. For example, Penn State and Ohio State have extensive branch networks that are integrated administratively and branded centrally but educate students at a network of campuses. Grouped as a unit, these rankings would change. So treat this as a first look at revenue size for a complex set of diverse institutions.

The top 20 by tuition revenue does not map cleanly to the top 20 measured by number of students, as one would expect.  Certain state systems are inward-looking and focussed on educating in-state residents. The two largest states, California and Texas, enroll exceptionally few out-of-state undergrads.  In fact, the Alaska state universities enroll proportionally more out-of-state undergrads than do either California and Texas (let that sink in).  That means that the bulk of students pay lower in-state tuition and reduces revenues at schools like Texas A&M and the big California public universities.  This is also true of Florida, with its four major universities — including the fourth largest US college by enrollment (Central Florida) — none of which crack the top 20 revenues list.

If we instead look at the Top 20 schools by 2018/19 FTEs, we see that only some are among the biggest revenue producers.  The top 10 include 6 schools with a big emphasis on online education (four are obvious but Indiana’s Ivy Tech unified community college system and the Lone Star College network also have significant distance efforts, though geared towards state residents). Others, such as Central Florida, Miami Dade and Texas-Austin, largely enroll in-state students with low tuition.

Prior CTAS posts have emphasized how student body size is becoming more and more a determinant in attracting and enrolling students. Colleges compete along several different parameters besides academics and enrollment; the Top 20 by revenue illustrates another strategy, attaining financial scale. Several of these high revenue schools have smaller enrollments than less financially-successful competitors but are thriving anyway. NYU just reported a record-breaking applicant pool despite sitting in a city ravaged by disease, crime and recession. USC has been mum about 2021 admittance but set a record for application numbers in 2020. These two schools are leveraging their name, educational reputation and locations in glamorous cities to attract students and prestige. As higher ed scales up, tracking this parameter will reveal more about the competitive landscape and how colleges are adapting to its challenges.

University of Southern California tuition revenues

University of Southern California