The staggering cost of a college education perplexes many people who often wonder: Why does a 4-year degree from a top private school cost about $300,000 (or about $70,000-$75,000 annually)? The answer is not as complicated as some people would lead you to believe.
In the most simplistic terms the answer is because you are supporting a huge education machine where, in the case of Yale, more than half of the total expenses ($2.2 billion of the $3.4 billion in expenses – not including depreciation) are compensation-related costs for the 28,739 employees in 2016 (an average of $75,000 each). The next largest expense categories were for grants (primarily to domestic individuals for undergrad scholarships) which totaled $437 million, Fees for Services (primarily management related with no detail provided) of $186 million, office-related expenses (occupancy, IT, office and insurance) of $182 million, $170 million in supplies, and $145 million of other expenses (no detail provided). Read more