In 1969, the Ivy League schools collected an average of $89,200 in revenues per student in today’s dollars. By 2019, the real revenues of Ivy League universities had exploded to $264,800 per student—a nearly threefold increase over 50 years.
You read that correctly— for every one of their students, Ivy League schools collect more than a quarter million dollars in revenue each year.
These are the findings of a new working paper by economists Zachary Bleemer and Jesse Rothstein, who have constructed an impressive longitudinal dataset of universities’ revenues and spending over the past several decades. Bleemer and Rothstein find that universities’ per-student revenues overall have increased: the average four-year institution collected $57,800 per student in 2019, up from $24,300 per student (in today’s dollars) in 1969. State flagship universities’ revenues have more than doubled in real terms, from $38,900 to $83,900 per student.
But the growth in revenues among America’s most elite institutions has been the most spectacular. Ivy League schools now collect over four and a half times as much revenue per student as the typical four-year school.
The authors argue this is a problematic and inequitable arrangement: higher-income students tend to enroll at more elite institutions, where revenues (and resources) are greater. About two-thirds of students at elite private schools hail from families in the top fifth of the income distribution. Lower-income students, by contrast, tend to cluster at institutions with fewer resources.
Such disparities are certainly concerning, but it’s also likely the case that universities which rake in a quarter million dollars per student hit diminishing returns with all that cash. According to the paper’s estimates, Ivy League schools shell out $81,700 per student on administrative expenses alone—a figure comparable to the US median household income. Yale University famously has almost as many administrators as undergraduates. The bloat extends beyond the Ivy League: other private institutions in the top 50 (as determined by selectivity) spend an average of $41,800 per student on administration.
Some of elite colleges’ excess resources may go towards productive ends, but it’s likely that these schools could spend much less and still provide a largely comparable educational experience. America’s well-regarded state flagships and public R1 universities spend less than a third of what top private schools do—and still enjoy very comfortable budgets.
Revenue and spending patterns at elite private colleges might not appear to be a public policy concern. But as my colleague Tao Tan has documented, many of the revenue streams available to universities—even private ones—are subsidized one way or another by the government. Federal student loans facilitate higher tuition prices. Federal research funding contributes over $60 billion annually to universities’ budgets. Tax breaks with price tags in the tens of billions subsidize gifts and endowments. All these federal policies generally push revenues upwards for universities—and probably exacerbate resource gaps between elite and nonelite schools.
It’s time to question whether elite private schools’ quarter-million dollars in revenue per student serves a legitimate public policy goal, and whether the various government subsidies that support these revenue streams truly justify their costs. Policy proposals such as capping indirect costs for federal grants and raising endowment taxes, which would somewhat limit these subsidies, should be on the table. Supporting access to higher education for qualified students may be a legitimate function of government. Ensuring elite colleges can spend like there’s no tomorrow is not.
Facts Only
* In 1969, Ivy League schools collected an average of $89,200 in revenues per student (in today’s dollars).
* By 2019, real revenues for Ivy League universities reached $264,800 per student.
* The average four-year institution collected $57,800 per student in 2019, up from $24,300 per student in 1969 (in today’s dollars).
* State flagship universities' revenues increased from $38,900 to $83,900 per student in real terms.
* Ivy League schools collect more than four and a half times the revenue of the typical four-year school.
* Ivy League schools spend $81,700 per student on administrative expenses alone.
* Other private institutions in the top 50 spend an average of $41,800 per student on administration.
* Federal student loans facilitate higher tuition prices.
* Federal research funding contributes over $60 billion annually to university budgets.
Executive Summary
Ivy League schools' revenues per student increased significantly between 1969 and 2019, growing from $89,200 to $264,800 in today’s dollars, representing a nearly threefold increase. This growth was more pronounced among elite institutions compared to the average four-year university, which grew from $24,300 to $57,800 per student over the same period. The disparity is stark: Ivy League schools now collect over four and a half times the revenue of typical four-year institutions.
The analysis suggests this divergence reflects socio-economic stratification, as higher-income students tend to attend elite private schools where revenues are higher, while lower-income students cluster at institutions with fewer resources. Furthermore, high administrative costs are noted, with Ivy League schools spending $81,700 per student on administration, comparable to the US median household income. The text posits that these revenue patterns are influenced by government subsidies, including federal student loans and research funding, which ultimately exacerbate resource gaps between elite and non-elite institutions.
Full Take
The data reveals a structural divergence where elite private institutions generate disproportionate revenue growth compared to public universities, suggesting that the mechanisms of financial growth in higher education are not purely meritocratic but deeply intertwined with socioeconomic access and federal policy. The observation that administrative costs at elite schools approach median household income raises critical questions about the justification for such expenditure, especially when compared to public flagships which operate on much leaner budgets.
The narrative shifts from describing financial outcomes to critiquing the legitimacy of those outcomes by linking revenue streams directly to government subsidies. This suggests an underlying pattern where external fiscal supports—such as student lending and research grants—act not just as funding mechanisms but as forces that amplify existing inequalities, rewarding institutional structures that already command greater resources. The implication is that the observed disparities in wealth accumulation at elite schools may be less a function of pure educational input and more a consequence of policy frameworks designed to funnel public resources into specific, high-revenue generating sectors.
What are the implicit assumptions regarding the social contract underpinning higher education? If access to high revenues is tied to socio-economic background, does the current system achieve its stated goal of providing equitable access, or does it function instead as a mechanism for wealth concentration? What specific policy levers could decouple institutional success from reliance on public subsidy and reallocate resources toward universal educational goals rather than maximizing per-student revenue?
Sentinel — Human
This text presents complex data, synthesizes expert findings, and builds a coherent argument for policy change, strongly indicating human-driven analytical writing rather than raw AI generation.