Financing of higher education is consists of two major components: revenue sources such tuition and fees; governmental support; endowment income and private fundraising and cost drivers or expenditures by functional or program area or by object of expenditure. Based on data collected by the US National Center for Education Statistics for 2012-13 the composition of cost drivers can vary by type of degree granting postsecondary institution
Public Institutions for example spend 27 % on instruction; 13 % on research; 20 % on student services, academic and institutional support. Privately Supported institutions spend 33 % on instruction; 12 % on research; 30 % on student services, academic and institutional support.
The Center is currently engaged in a study of cost drivers and the impact of alternative funding strategies in higher education. The study will analyze trends in costs at various types of institutions using both national data and institutional case studies. The role of alternative funding strategies to support these costs will also be explored.