What is the cost of a scholarship/grant-in-aid?

[kardplayer]

Does anyone have facts on what the actual cost to a school of funding a scholarship is?

Most of the costs of a school are fixed - professors, buildings, staff, etc., so adding students doesn't make it more expensive run the school.

[*****]

Does anyone have facts on what the actual cost to a school of funding a scholarship is?

Most of the costs of a school are fixed - professors, buildings, staff, etc., so adding students doesn't make it more expensive run the school.From the link I gave you a couple times (did you finally read it?):

Q: What is the minimum dollar amount needed to establish a new athletic scholarship?

A: $50,000, which can be paid over a period of up to five years. It may come from multiple donors or sources, but the total to each athletic endowment, called an "Efund", must be $50,000 in order to activate. Scholarships are created with a simple one-page document called an endowed fund agreement, which is signed by the originator of the scholarship as well as the Athletic Director and VP of Investments/Treasurer. Contact your gift officer for a sample endowed fund agreement.

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That's one school's amount.

[*****]

Q: What is the minimum dollar amount needed to establish a new athletic scholarship?...Maybe that doesn't answer your question ... sorry.

[kardplayer]

From the link I gave you a couple times (did you finally read it?):

Q: What is the minimum dollar amount needed to establish a new athletic scholarship?

A: $50,000, which can be paid over a period of up to five years. It may come from multiple donors or sources, but the total to each athletic endowment, called an "Efund", must be $50,000 in order to activate. Scholarships are created with a simple one-page document called an endowed fund agreement, which is signed by the originator of the scholarship as well as the Athletic Director and VP of Investments/Treasurer. Contact your gift officer for a sample endowed fund agreement.

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That's one school's amount.

That's what they charge their alumni/donors, not necessarily what it costs. Also, that's a one time cost that funds the scholarship "forever", as I assume they are using the investment money from the gift to pay the scholarship.

If they are assuming a 5% return on their investment and no level of cost increase over time, that means that the cost of a student that attends Rice on an athletic scholarship is about $2,500 - a pittance frankly. Since there is going to be some inflation, the actual current cost is probably far less. Even if you bump the return to 8%, we're talking about $4,000.

The other thing this tells me is that a one time $1mm investment funds 20 scholarships...

[kardplayer]

Ralph - I didn't see your 2nd reply before I submitted my reply...

[Maverick]

Each school is required by NCAA rules to generate a cost of attendance figure for in-state and out of state students. This includes room, board, tuition, fees, and figure of $200 for books (the reality of that figure is the school can pay actual costs for required texts and a limited list of other items). Based on this cost of attendance figure, anything less than a full scholarship is then assigned a percentage value. Based on these values a team's limit as well as an individual's limit are monitored. Note that this scholarship is actual called a grant-in-aid and is not limited to funds from athletics but so-called institutional aid and even scholarships a kid won in HS that have an athletic component as part of the scholarship can be counted. So sometimes the athletic department has to reduce the amount of money it gives a kid so that he or she will not be over the limit if the kid is on a full ride.

[skinny_uncle]

Each school is required by NCAA rules to generate a cost of attendance figure for in-state and out of state students. This includes room, board, tuition, fees, and figure of $200 for books (the reality of that figure is the school can pay actual costs for required texts and a limited list of other items). Based on this cost of attendance figure, anything less than a full scholarship is then assigned a percentage value. Based on these values a team's limit as well as an individual's limit are monitored. Note that this scholarship is actual called a grant-in-aid and is not limited to funds from athletics but so-called institutional aid and even scholarships a kid won in HS that have an athletic component as part of the scholarship can be counted. So sometimes the athletic department has to reduce the amount of money it gives a kid so that he or she will not be over the limit if the kid is on a full ride.
$200 for books sounds optimistic from my experience with my daughter who is a student.

[65 Pard]

It seems to me that the incremental cost of adding a couple more students to a student body of thousands is nothing more than room and board and books.....No additional help needs be hired.

That being said, the actual cost per student at most private colleges is much less than the published tuition. Those paying the full published price are subsidizing those who are awarded scholarships...another reflection of the redistribution of weath mentality prevalent in this country.

[Pard4Life]

$200 for books sounds optimistic from my experience with my daughter who is a student.

True, I agree... but that's before I learned to use amazon, adebooks.com, and half.com (?)... I've saved about 40-60% on my projected net book buy totals. Sometimes I've bought books listed $50.00 in the store for $20.00 online.. and once, a meteorology book listed for $90.00 used several times over for $5!!!

Publishers are the criminals nobody recognizes. :nod:

[colgate13]

The NCAA max for books as part of a scholarship is $400 OR a school can buy a students books outright. It is confusing stuff, but if a kid is on full scholarship they are most likely getting their books paid in full too. If they are on a partial, then the partial amount that the scholarship is based on is tuition, fees, room, board and $400 for books.

Leave it to the NCAA to make it easy to understand.

[skinny_uncle]

True, I agree... but that's before I learned to use amazon, adebooks.com, and half.com (?)... I've saved about 40-60% on my projected net book buy totals. Sometimes I've bought books listed $50.00 in the store for $20.00 online.. and once, a meteorology book listed for $90.00 used several times over for $5!!!

Publishers are the criminals nobody recognizes. :nod:
I don't think it is only the publishers. The school runs a bookstore which I saw charging $90 for a well-used math text. And this was at a JUCO. I'm sure they did not pay anywhere near that when they bought it back from some desparate student.

[blukeys]

The NCAA max for books as part of a scholarship is $400 OR a school can buy a students books outright. It is confusing stuff, but if a kid is on full scholarship they are most likely getting their books paid in full too. If they are on a partial, then the partial amount that the scholarship is based on is tuition, fees, room, board and $400 for books.

Leave it to the NCAA to make it easy to understand.


I will try to get back to the original subjuect and 13's book example demonstrates the difficulty of trying to get a real handle around the school's true cost of providing a scholarship. While $400 would appear to be the school's cost of providing books to a scholarship athlete, this is not truly so. College bookstores are run by the college and they never pay the retail price for a book. If a student pays $400 for the books the bookstore more than likely makes $266.00. 300% triplenet costing is common in most retail operations (electronics and computers are prime exceptions.)

The question really needs to be addressed by a cost accountant. College tuition covers a wide variety of fixed costs and most of these fixed costs probably account for the 60 to 80% of the cost of running a University. The fixed costs include but are not limited to:

1. Faculty and staff salaries and benefits
2. New Construction
3. Physical Plant Maintenance
4. Utilities
5. Insurance
6. Legal retainers
7. Advertising and Promotion


Adding 50, 60, or 200 scholarship athletes to these schools does nothing to effect the school's fixed costs in the categories mentioned above (I have not mentioned dorm rooms). And fixed costs are what most businesses concern themselves with covering.

There are variable costs that are truly impacted by scholarship athletes. These areas include but are not limited to:

1. Food
2. Perhaps, Rooms includes the amenities that come with the room
3. Books

When one looks at the variable costs of providing a scholarship it is easy to see why Oklahoma at one time was willing to finance 130+ scollies for their football program.


In the area of Food and Books one can come to a decent approximation of costs. Most food service professionals can cost out an average per capita 3 meal day. From that you must also deduct the lack of income that comes from a student purchase of a meal plan (Yes colleges profit from food service)

Thanks to 13's contribution we know the school's liability is limited to $400 for each scholarship athlete. In most cases it is less than $400.

There are a couple of gray areas. Do scholarship athletes impact classroom size or faculty size? I have seen no study that suggests this. The places where this might happen would be at the smaller liberal arts colleges such as Wofford and Colgate. In Delaware's football programs the academic majors of all of the players are listed and typically the majors are spread widely throughout the university. In short, scholarship athltetes add at most one or two students to any one class.

The other gray area for a cost accountant would be Rooms. If a school is experiencing a shortage for housing then the cost of providing a room for an athlete would be the cost of providing the room. (Construction costs + Financing Costs + plus Maintenace costs divided by the potential long term use of the room.)

If a school has surplus room space then all bets are off and only some small variable costs can be included in the formula.

In the end even smaller schools benefit from the scholarships/ grants given for athletes. Successful athletic teams give positive name exposure that cannot be purchased with well placed ads in USA Today. The relatively small cost of covering key but not overwhelmingly expensive variable costs is a tradeoff most schools have concluded is to their benifit. On Paper most football programs lose money. If ALL of the positive factors were included vis a vis a true costing out of the variable costs to the school I don't think the football picture would appear as bleak as it does.

College Administrators can appear to be idiots. But typically when it comes to dollar and cents decisions they know on which side of the bread the butter is on.

[UAalum72]

College Administrators can appear to be idiots. But typically when it comes to dollar and cents decisions they know on which side of the bread the butter is on.
And how to spin the figures to get the result they want. A few months ago on the Pioneer Football League forum, some Torero fans were quoting U of San Diego admins who said it took $1 million to endow every athletic scholarship (7% earnings to pay $40,000 college cost plus cover inflation), and to add football schollies would require adding women's as well, so it would take over $130 million additional endowment to upgrade USD's program to full scholarship. Too bad that thread isn't in their archives any more, and I tried to point out that USD's current endowment is $150M yet they still fund scholarships in 19 sports, but it shows what kind of numbers somebody can come up with to support a predetermined outcome.

[blukeys]

And how to spin the figures to get the result they want. A few months ago on the Pioneer Football League forum, some Torero fans were quoting U of San Diego admins who said it took $1 million to endow every athletic scholarship (7% earnings to pay $40,000 college cost plus cover inflation), and to add football schollies would require adding women's as well, so it would take over $130 million additional endowment to upgrade USD's program to full scholarship. Too bad that thread isn't in their archives any more, and I tried to point out that USD's current endowment is $150M yet they still fund scholarships in 19 sports, but it shows what kind of numbers somebody can come up with to support a predetermined outcome.


Mark Twain covered this ground years ago. "There are three kinds of lies. Lies, Damned Lies, and Statistics. It has always amazed me that Colgate can afford to sponsor football but George Mason U. with an Undergrad enrollment of 16.000+ can't. One can always make or not make the case depending on their prejudice. The Scholarship issue is where it is not reasonable to make the case.