University of Richmond charges $57,470 to every undergraduate student who attends classes and lives on campus. Including personal expenses and textbook charges, the total cost of attendance reaches nearly $60,000. So where does the money go?
Richmond has around $250 million each year to spend on salaries, university utilities, supplies and maintenance, said David Hale, vice president for business and finance and treasurer of the university. About fifty percent of that $250 million comes from student charges and the remaining 50 percent comes from endowment and other miscellaneous resources.
“Of this $250 million, we spend about 60 percent on salaries and compensation, 30 percent on operations and 10 percent on taking care of facilities,” Hale said.
Along with basic expenses, Richmond gives a large sum of financial aid to its students, particularly undergraduate students.
For the 2013-2014 school year, along with salaries, utilities and supplies, Richmond has also provided over $70 million in financial aid to traditional undergraduate students, said Nanci Tessier, vice president for enrollment management.
The money that provides for financial aid comes from both student charges and the endowment. “About 45 percent is from student charges,” Hale said. “Probably about 30 percent of financial aid is specifically supported by the endowment.”
The rest of student charges contribute to the budget to pay for staff salaries, maintenance and supplies, Hale said.
Although students’ tuition charges contribute to financial aid, the number of students receiving financial aid each year does not affect cost of attendance, Tessier said. If fewer students received financial aid, student tuition charges would not change because of the significant contribution from the endowment.
“We are in a unique position as the University of Richmond has an extraordinary $2.3 billion endowment,” Hale said. “The University spends about 4.5-5 percent of the endowment each year, so about $95 million depending on market value.”
As a result of the large endowment, money can be allocated from this fund to help with the tuition of all students. “A significant portion of the cost of every student’s education is provided for by the endowment, even if the student is not receiving financial aid from the University of Richmond,” Tessier said.
Although the university has a significant endowment, this is not considered profit, Hale said. “The University of Richmond is a not-for-profit organization. We’re chartered by the Commonwealth of Virginia to pursue our tax-exempt mission, which is education. Our goal is to have our annual resources to meet our annual expenditures,” Hale said.
Because Richmond has a not-for-profit status, there is no specific owner of the university. “The university is overseen by a board of trustees, and if something ever happened to the university, we would have to distribute our assets to other non-profits,” Hale said. “No one has a financial stake in the university.”
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