United States has some of the best institutions of higher learning in the world. Examples of such institutions include Harvard University, Yale University, Princeton University, University of Pennsylvania and Massachusetts Institute of Technology. Harvard University is famous for its business school. Yale University is famous for its school of law. Colleges and universities in United States have been facing challenges. High inflation costs have increased the expenditure of most universities (Heller 92). In addition, the quality of education in some institutions is poor. Inadequate state funding and high tuition fees, inadequate donor funds, misappropriation of funds and poor budgeting have contributed to the poor performance of institutions of higher learning in the United States.

Inadequate state funding

Inadequate state funding is one of the main challenges that affect colleges and universities in the United States. Universities in the United States are funded by the state budget. The state allocates a certain percentage of its budget to help in financing the normal operations of certain institution of higher learning. Examples of these operations include paying the salaries and wages of teachers, purchasing instructional materials and renovating the lecture halls used for conducting lectures. Recently, states have been offering inadequate financing to the institutions of higher learning (Heller, 104). High inflation rates have caused an increase in the expenditure of states. Since states have a lot of expenditure to cater for, they are forced to allocate certain portion of their budget to cater for all the expenditure. Institutions of higher learning may therefore receive less financing due to budget constraints. In addition, the cost of healthcare has increased in most states. The increase in medical costs is attributed to the poor eating habits that consumers are adopting. It forces states to allocate many funds to Medicaid program. This reduces the amount of available funds that states can use to support institutions of higher learning.

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High tuition fees

High tuition fees in United States have also contributed to low funding in the colleges and universities in United States. Since most states reduced the amount of public funds that they offer to support institutions of higher learning, colleges and universities have raised their tuition fees in an attempt of raising enough funds. According to the Department of Education in United Sates, tuition fees have risen by 42 percent (Ladipo, Sanchez and Sopher 39). Most low and middle class families cannot afford the high tuition fees. This has reduced significantly the number of students seeking education from the institutions of higher learning. Institutions of higher learning are therefore not able to raise enough funds to be used in purchasing the equipment used to conduct lectures. High tuition fees have forced state universities to accept students from other states so that they can support university programs. It reduces the number of spaces that are available to the state students.

Financial problems

Higher education systems in United States are also facing financial problems since donors are giving inadequate funds to these institutions. The board members of most universities in United States are claiming that university alumni are shying away from supporting their institutions. This is because the high cost of living has caused most investors to lack enough funds to support the schools that they received their education from. In addition, donor funds from businesses to support school projects have also reduced. Most businesses prefer showing corporate social responsibility by caring for the environment instead of giving donations to school. Most environmentalists are putting pressure on corporations to go green in order to reduce the risk of the world suffering from global warming. Due to this, corporations lack enough funds to give as school donations. However, in December 13, 2011 a donor known as James H. Simons donated $ 150 million to help in building new laboratories that would support research projects in this institution. According to the Chronicles of Higher Education, this amount was the sixth largest donation that has ever been made in any public university in America (Heller 152).

Misappropriation of funds

Misappropriation of funds is also causing higher education centers in the United Sates to perform poorly. Some of university funds that are supposed to support development projects in university are used for other purposes rather than the purpose that they were intended. Cases exist where university funds are used to finance unauthorized bonuses for top officials in board of management of an institution of higher learning (Ladipo, Sanchez and Sopher 74). This money could have been used to buy stationery material to support learning activities in public universities. On September 6 2012, two former employees of North Carolina Central University were charged for misappropriation of university funds. One of the employees known as Coleman was accused for diverting approximately $ 1 million from their University Consortium to a checking account. The fund from the University Consortium was established to help in fighting for the rights of the minority groups. According to research, minority groups do not receive the same level of education compared to the other people in the society. Misappropriation of funds that were meant to empower them would mean that they do not receive equal educational opportunities just like the other people in the society.

Poor budgeting

Poor budgeting in institutions of higher education has also contributed to funding problems in most universities and colleges in United States. Most budgets that public institutions prepare do not account for the uncertainties that may face institutions as they progress in their academic years. An example of such uncertainties includes high inflation that may increase the cost of living. When the rates of inflation are high, most students may not have enough disposable income to pay for their tuition fees. Universities will therefore lack enough funds to support their normal activities. Universities need to look for alternative sources of finances in case they are faced with financial difficulties. However, most universities operate under a fixed budget and they therefore fail to get additional funds in case they incur financial difficulties (Ladipo, Sanchez and Sopher 54). In some cases, protests and mass demonstrations occur in universities. University students may protest when they feel that the administration does not put their personal rights into consideration. During protests, university property may be destroyed. Universities should include an allowance for contingent liabilities in their budgets in order to avoid facing financial constraints after such issues occur.


Inadequate state funding and high tuition fees have contributed to poor performance of institutions of higher learning in the United States. States have reduced the amount of funds that they offer to most universities. Rise in state expenditure has reduced the amount of available funds that can be used to support education programs. High tuition fees have also caused reduction in funds used to support college programs. Most students cannot afford the high tuition fees. This reduces the amount of money that institutions of higher learning can use to support their operations. Inadequate donor funding has also caused universities to face financial difficulties. University alumni are no longer supporting development programs in the universities that they conducted their studies. Some of the higher officials in universities also misappropriate university funds. This reduces the amount of money available to fund the activities in a university. Universities also have poor budgeting skills. It makes tem o fail allocate money for contingent liabilities.

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