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<p>Financial aid is not counted as an expense item in college financial reports. There is no financial aid included in the “per student spending” figures above. </p>
<p>Financial aid is accounted for as a discount or reduction in “per student charges” in all of the figures above. That’s why, for example, Swat’s average “per student charges” above are $26.5K rather than $42K per year. “Per Student Charges” are the total of revenues from tuition, room/board, and fees minus financial aid discounts, i.e. the total dollars actually received from the bills sent to students for the year.</p>
<p>Years ago, financial aid was treated as an expense item. Colleges would count the full sticker price as their revenues and then treat financial aid as an expense. But, accounting practices changed because financial aid is dollars that the college never actually received. Accountants balked because the revenues being declared were imaginary. Thus, it is currently treated as a reduction in revenues.</p>
<p>The “per student spending” is the annual operating budget divided by enrollment. It does not include capital spending (i.e. the cost of a new building), however it may include annual interest payments on money borrowed to build a new science center. It also does not include fees and costs associated with managing the endowment investments.</p>