Profit Margins in Education
By Arnold Kling
Based upon the CELS and SHEEO studies, the real cost of undergraduate education could vary from $5,000 to $9,000 per year, depending on institutional characteristics.
The rest of tuition is a markup over cost. He estimates the profit margin as 60 percent. Some of the profits are used to subsidize other students, but most of the profits seem to go to professors and administrators.
I undertook a similar analysis of public school education where I live, and I also found a huge profit margin. This profit margin goes to support a bloated administrative staff, driven by union featherbedding.