Upper-Tail Drivers, Steady Contributors, and Equalizers: How Individual Revenue Sources Shape Financial Inequality Across Higher Education Institutions

This paper provides the first comprehensive description of how individual funding sources shape financial inequality across higher education institutions. The description employs a new set of revenue measures derived from multiple subcomponents of the Integrated Postsecondary Education Data System finance survey. These measures address limitations pertaining to aggregation and standardization found in previous work. The methods—a decomposition of the Gini index—come from the literature on income inequality. The results detail the contributions of individual revenue sources to overall inequality patterns for the 2004 through 2020 fiscal years. Net tuition revenue from government scholarship programs equalizes per-student revenue while net tuition revenue from students and their families steadily contributes to differences across institutions, especially for total revenue inequality. Government grants (net of student scholarships) and private gift, grant, and investment revenues contribute greatly to upper-tail inequality within the private sector and among public doctoral universities. Government appropriations play a hybrid role, equalizing revenues between the public and private sectors and differentiating revenues within the public sector. Over time, the revenue mix changed the most at public doctoral universities, where private revenue sources increasingly shaped resource differences.