Working on mathematical models for a living, if the number at the end comes out as "That can't be right..." odds are its a problem with the model, not the syste

Working on mathematical models for a living, if the number at the end comes out as "That can't be right..." odds are its a problem with the model, not the system it's modeling. You've made a lot of simplifications, both on the income and expenses end of your envelope math that I very much doubt are correct. Universities, even small ones, are fairly large, complex organizations that are extremely capital intensive. This is complicated by the fact that many of the institutions we're talking about are private, so we don't have many numbers. But to the major point of moving toward teaching, and away from research, we can look at the balance sheet of a large state university system: For 2012, the UNC system took in $320,535,000 in student fees and $725,846,000 in grants and contracts. While UNC is a fairly good deal for it's students (if you're in-state) its hardly free, and grant income outpaces student fees by a healthy margin.