Quick and Dirty Education Expense Analysis

For some reason this morning I was thinking alot about Hannah and her upcoming graduation from Berkeley.  I am so proud of the woman she has become.

One memory that came to mind was one of Hannah's high school Economics class assignments. The assignment was to interview her parents about their attitudes about education.  One question she had to ask was 'do you (the parent) value education?'.  My immediate response was to ask her 'what do you think our actions have said about our value of education?'.  Julie and I have definitely put our time and money where our mouth is when it comes to education.  We value it and we've tried to pass that value on to our kids. It has been a sacrifice and investment that has already paid huge dividends.

As Hannah nears graduation I can honestly say that I was happy to help pay UC Berkeley to teach and train her.

Of course, once my brain got started on it.. it began to wonder just what the total cost of her education was.  You see, we pay student fees and housing - but that is only a portion of the revenues that Berkeley receives.

Here's what I learned in my 15 minutes of analysis:

The UC system educates approximately 234,000 undergraduate and graduate students.  Berkeley has just over 36,000 or about 15.4% of the total students in the UC system (there are a total of 10 campuses).

The entire UC system receives $6.3 Billion from CA budget ($26,923 per student) which includes student fees + $3B taken from our general fund.  General fund money comes from property taxes, our sales tithe, income taxes and the various and asundry other sources of state revenues (e.g., tickets).

California also pays out approximately $1.2B in student aid for higher education.  Approximately 1/3rd goes to UC students; or about $400M.  $400M/234,000 students works out to about $1,709/student.

Berkeley, itself, has an endowment of $2.6B.  Those are funds donated to the university for specific and general funding uses.  The endowment pays out roughly 4.75% of its funds each year.  That means funding of around $124M in the most recent year.  That works out to another $3,444 per student.

In summary, just from those sources (there are many others) - Berkeley receives at least $32,076 per student, per year ($26,923 + $1,709 + $3,444).  It seems like all of California is putting their money where their mouth is. Wouldn't you say?

For Berkeley, with 36,000 students, that works out to $1.15B in annual revenue/funding.

You might wonder how many teaching staff Berkeley has.  The answer is around 1,928.  If you assume there is one staff (support) person for every professor (seems high.. but a good starting point) - that means that there are around 3,850 total employees at Berkeley.  Let's say you paid each of those employees a salary of $125,000.  Then add in additional compensation (vacation, sick time, pension, medical benefits) of another 40% of their base pay.  That would make the average employee compensation $175K.  That would produce a total payroll of $674M.  There would still be about $481M for maintaining facilities, paying for utilities and all remaining non-employee expenses.

It makes you wonder what all the protesting is about.