To supplement tuition revenue, colleges are looking at everything from high-demand graduate courses to real estate deals

by Francesca Di Meglio

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This is the third part of a multipart series onward the business of college.

At Lasell College in the Boston suburb of Auburndale, there is a retirement community that essentially constitutes a campus within a campus. But the community of 230 who practise there and take courses is more than just any proof in seniors engaging in lifelong learning. For Lasell, the retirees are a source of alternative revenue that will help protect the college’s bottom line from fiscal and demographic trends that are making the college concern added challenging.

Increasingly, colleges and universities, especially publicly funded greatness schools and those by small endowments (BusinessWeek.com, 10/22/07), are turning to alternative revenue streams—including grants, private donations, patents, real estate, and money-making graduate courses—to travel ends meet. Administrators at these schools say it is the only way they can compete with opulent private schools, such as Harvard, that have brand names and hefty endowments (BusinessWeek.com, 11/29/2007).

Even though tuition is high across the board, administrators say they spend more to school undergraduates than they can charge students. "The cost of higher education is increasing so fast. There’s no end I can see," said Neil Theobald, vice-president and chief financial magistrate of Indiana University in Bloomington and Indianapolis, in which place tuition makes up only about a third part of the institute’s revenues and state attend is declining.

Additionally, the so-called echo boom generation—children of the baby boomers—is finishing literary institution, and the coming generation is smaller. Therefore, there power of choosing be fewer potential common students. "We must preserve ourselves as being that age when the competition [for tuition dollars] is going to get rougher," said Lasell College President Michael Alexander.

So where’s the new money coming from? For many colleges, providing additional forms of education is each obvious way to occasion a new revenue tendency. Many schools are developing graduate program—in areas such as management, health care, and breeding—on this account that they are in demand and can be profitable. A instance in point: New England College in Henniker, N.H., which added a masters in management with a health care specialization and an MFA program in poetry, which combines online moil by two 10-day on-campus sessions. "We’re not a wealthy institution. We don’t have a large endowment," said Michele Perkins, New England College’s president. "We are what you’d call tuition sustained by." In 2003, the first year that New England College offered a graduate program, it generated $1 million in revenue. In the 2008-2009 academic year, the graduate programs are projected to bring in $5 million.

Some universities are creating revenue streams of an entirely different sort by going beyond teaching and becoming real estate developers and landlords. Many universities already do this to some extent by owning scholar dormitories and apartments. But some schools are finding that their attribute is valuable and in demand for uses beyond bookish man housing and classroom buildings. For example, Emmanuel College, a Catholic liberal arts school in Boston, leased an acre of put on shore in the Fenway neighborhood to pharmaceutical companionship Merck (MRK), that built a 12-story, 300,000 square-foot private scrutiny facility that opened in 2004. The 75-year ground lease notwithstanding a research facility brought in $50 the masses, said Jack Maguire, who like chairman and founder of higher education consultancy firm Maguire Associates brokered the deal with the literary institution.