My parents always used to tell me that if I didn’t control my money, my money would control me.
That’s why I’ve made it a point to always emphasize the importance of budgeting, and deciding on costs early, especially whenever clients ask me: How much does it cost to open a college or university? How much money do I really need?
Now, this question might seem simple, but in my years of being asked about this, the answer can be quite complicated. Let’s explore some of the most essential expenses you’ll need to consider.
Starting first - with the campus.
As they say, location, location, location. But a good location comes at a price and those prices are on the rise in the United States.
If you’re going for brick-and-mortar, it isn’t just classrooms you need to build. You need to also consider rooms for administration, faculty, and staff offices; rooms for storing IT hardware and confidential information; workshops, laboratories; and bathrooms of course!
They’re all necessary for starting a university.
You should set aside at least $5000 to $15,000 a month for your campus lease.
Second - faculty.
A school without great teachers is like a car without wheels. You’ll need to have them in place, or else you’ll get nowhere.
So before you obtain your license to open your college or university and start enrolling students, you should have qualified faculty in place.
For this, you might have to set aside $60,000 annually per full-time faculty, and $5000 per course for adjunct faculty.
Teacher salaries will surely be your biggest expense, so make sure to keep that in mind, as the revenue won’t come in until later on.
Third - administration staff
Teachers aren’t the only manpower you’ll need, you’ll also need admin staff. Some of the positions that you will have to fill include a chief academic officer, an admissions director, a student services director, a registrar, a librarian, an HR manager, and an accountant.
It might be best to start with part-time staff for these roles and convert them into a full-time staff in the future as your school grows
For this, you’re looking at an hourly rate of $40 to $150, depending on their skills.
Fourth - equipment and technology.
Another necessary expense is your technical expenses, this includes the hardware and software that you use to deliver your courses.
Learning modules are no longer kept on paper, so you’ll need a way to manage all the student data like projects, exams, and grades and this is where you will need a Learning Management System (or LMS). Building your own LMS can cost you between $25,000 and $100,000 (excluding server costs). You can also use one of the services that provide you with a ready-made LMS solution and you pay per student, the average cost is $5 per student per month. You can also install Moodle or Canvas on your own server and manage it yourself if you have the expertise needed for this, which will save you a lot of money in the long run.
Finally - library resources.
If you want your school to get accredited, know that most accreditors and regulators will check to see if your students have access to reading and research materials, whether through physical or online libraries. These greatly vary in cost, so make sure to set aside some money for this expense.
Starting a University is a fulfilling and lucrative choice. Money does matter when delivering quality education though; so if you want to serve your students the best you can - start with the money. Set aside some time to control your money unless you want your money to control you.
Learn more about the cost of opening a college or university and how to start a university affordably, or “CHEAP!” in the links below.
Be sure to check out our next video "Where in the United States should I open a university?"
As always, feel free to give me a call or Contact Us with any questions you may have. I’ve been helping clients establish universities in the US for over a decade, and I’m looking forward to helping you, too.