With fees now up to £9,353 for an undergraduate degree from the 2025/26 academic year, it’s more important than ever to make sure you’re getting your money’s worth. So, how do universities spend your money?
Updated: 01 Apr 2025
Many universities outline how they distribute money, and teaching and research is often the area that receives the largest amount. It’s common for over half of a university’s income to be spent on teaching and research.
This is by far the biggest expenditure for most institutions. In 2019/20, roughly £17.5 billion went towards direct teaching and research activity.
However, before you go checking your lecturers’ wrists for Rolexes, it’s important to note this isn’t all spent on their salaries. The sum also covers the cost of paying administrative and support staff, course design, exams, research projects and out-of-hours support for students.
If you’re paying for a university experience, the environment you study in matters. No one wants to be sitting in creaky seats or trying to balance unstable desks when taking notes in lectures. Your money also goes into maintaining the upkeep of your university campus. £4.3 billion was spent on this in 2019/20.
Also included is your student accommodation. Money might go towards building brand new halls of residence, as well as maintaining current ones, keeping the hot water flowing and providing wi-fi for a minimal fee.
Running a library is also quite expensive – £3.8 million a year kind of expensive. That’s how much 138 universities in the UK spent on operating libraries in 2019/20.
This money enables many libraries to stay open 24-hours-a-day for at least some of the year – handy for when that all-day study session turns into an all-nighter. Next time we won’t moan so much about paying our late fees.
From student support and careers services to equipment for societies, it takes a lot of funding to keep a university operating. Many unis also offer on-campus health and counselling services, crèches and transport to help staff and students get around bigger sites. Your fees play a big role here as these things all cost money. Paying for these sorts of services cost the universities surveyed in 2019/20 over £3m.
Firstly, universities don’t get all of their money from you – in fact, only about a quarter of their income comes from UK student fees. The rest comes from the higher fees paid by international students, government grants, charitable donations and investments.
Secondly, universities are essentially businesses, and a business on that scale costs a lot to run. Plus, with cuts in government spending on education, unis have to make up the shortfall.
According to a survey reported by the BBC, a massive 80% of students, when questioned, didn’t think their university provided enough information on how fees are used. Many university websites now show a financial breakdown.
We wanted a view from the street, or in this case, the campus, so we spoke to Freja Brunning, a BA Graphic Communication student at the University of Reading. She told us:
“I personally have absolutely no idea where my fees go, I wasn’t made aware before starting and I’m still not sure at all.
“I definitely think uni would be much more appealing to prospective students if the universities broke down where the money was going. I have friends who didn’t go to uni because they felt it wasn’t worth the money and maybe if they had been shown everything it was going on, they might have changed their minds.
“An overview in percentages of what goes to lectures, what goes to facilities etc would be something I, and I think many other students, would be interested in seeing.”
While some institutions could do a lot better at letting prospective students know how their cash is being spent, there’s nothing dodgy going on behind the scenes. Universities really are investing the money in providing you with a top-notch education.
So, should the lack of clarity put you off? Absolutely not! As Freja says:
“While I do think about where the tuition fees go, it was never something that made me question whether I wanted to go to uni or not. Looking back at what I’ve had access to over the last year I think I’ve been very fortunate and received high levels of teaching and facilities. I’ve had a high enough amount of contact hours and one-on-one help when needed.
“I see what I’m doing as an investment, and if it means I’m more likely to get a well-paid career in something I enjoy then it’s worth it in the end.”
Take a look at our ultimate guide to student finance for more information about money at university.