(1) Private sources:

For the development of higher education in America, the following sources have been utilised. The sources of income are meant for running private universities and colleges.

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(a) Endowment:

The State grants permission for establishing private universities and colleges for higher education on the basis of movable and immovable properties attached to them. The institutions have their own endownment and they get private help and donations from time to time. The endownment may be increased when needed but other sources such as tution-fee cannot be increased. Consequently, these institutions reduce their expenditure.

(b) Tution Fee:

Private Universities and colleges charge more fees than the State or public universities and colleges. This tution-fee is annual. Private educational institution fixes these tution-fees after much deliberation.

While fixing the fees, importance is attached to the number of students taking admission, standard of education, financial status of the local people, the reputation of the institution, etc. If in a private institution the tution-fee is raised too high, the student begins to move to other educational institutions.

Therefore, if the enrolment falls, the institution has to reduce its expenditure which results in falling education standards. Higher fee leads to a high standard of education. If the tution fee charged in private institutions is between 1000 to 1500 dollars per year, it is about 800 dollars annually in State educational institutions. In private institutions, in addition to tution-fee, reading-room fee, class-maintenance fee, light, refreshment, meals, conveyance fee, etc. are also charged.

(c) Donation for Immediate Expenditure:

Private institutions receive donations from the public from time to time. These donations are known as gifts. It is in two forms-(l) Investment gift or endowment which is given by the public for increasing the endowment and (2) Indirect gift which is given by the public which may ultimately accumulate to a much bigger amount.

This gift or donation is given to meet immediate expenditure. The amount donated may be from 1 dollar to one million dollars. The American people give these donations when there is a rise in their financial status or at the time of some function or for providing educational facilities to some member of the family.

This voluntary donation may be given for University reading room, library, lecture- theatre, laboratory, etc., or it may also be given without expressing any special reason. This donation is spent by the President and the treasurer of the University who are free to spend that donation.

To­day, memory-donations have become customary. People donate annually in the memory of their dear ones at the time of birth or death and this donation continues indefinitely. Various scholarships, known as memory-scholarships are given from this fund.

This donation is given to private universities by commercial and industrial concerns. These commercial and industrial institutions help the universities in their financial stringency from time to time. These educational institutions extend their co-operation in training and educating the employees of these commercial and industrial concerns.

Although the American private universities are entitled to get State financial help and grants, these universities hesitate in taking that financial help from the State lest the State control should restrict their autonomy.

Even then, they continue to get State help indirectly in various forms. No tax is levied on endownments and donations. During 1992 annual income of about 1500 dollars, collected from endowments and memory scholarship was exempted from income tax. Guardians spending about 1200 dollars annually on the education of their wards are exempted from paying income-tax. The student, after his education, when he begins to earn, also pays annual donations as a matter of duty to the institution.

(2) Sources of Income of the State Educational Institutions:

Universities and colleges run by the State receive their income from the funds of the municipal boards and public income-tax. Most of the universities are run by the State Governments. Nominal fee is charged in these universities from resident students.

Although the States have provided various sources of income to these universities, still sometimes they face shortage of funds which is supplemented by donations, gifts and fees. These gifts and fees are charged more from those students who come from other States to take admission in State-run educational institutions.

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