4 higher ed alternative revenue ideas that won’t deliver—and what actually will
August 8, 2025, By Paul-Anne Robb, Research Analyst
Declining enrollment numbers, recent funding cuts from federal and state governments, and continually increasing costs have prompted higher education leaders to seek alternative revenue generation strategies. Alternative revenue supports financial sustainability by expanding and diversifying revenue sources, but not every strategy yields successful results.
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What is alternative revenue?
Alternative revenue refers to revenue not sourced from tuition and fees, government allocations, research grants, and donations. These four sources account for more than 80% of revenue for an average institution.
Many university stakeholders suggest alternative revenue ideas that are less viable than they initially appear. In this blog, EAB has identified four commonly suggested pursuits for revenue generation that are unlikely to yield expected results, as they take years to become successful or are costly with little return on investment. A promising alternative is proposed for each suggestion—one that is more practical, replicable, and scalable for the average institution.
1. Launching new online microcredentials
Stakeholders may view new online microcredentials as an easy, low-effort way to generate more revenue. However, launching microcredentials requires careful planning, evaluation, and significant upfront investments. Although offering microcredentials appears promising, additional costs like faculty course development and staff time for processing applications are often overlooked. Many institutions incur costs upwards of $250K from hiring dedicated instructional design staff and creating new offerings.
Though developing new microcredentials may seem lower cost than traditional degree programs, institutions end up investing similar amounts when the costs are totaled. Ultimately, creating microcredentials from the ground up often does not bring in enough revenue to justify the high investment.
Promising alternative: Repackage existing offerings
As employers anticipate workforce declines, many are seeking ways to upskill current talent to align with the market demands of the sector. No microcredential is truly cost-free for an institution; however, colleges and universities that repackage existing offerings and offer microcredentials as non-credit courses for employees (specifically in AI and data science) will help meet in-demand market needs and fill the skills gap between the current and future workforce. Offering repackaged non-credit courses costs an average of $25K, which is over $200K less than building microcredentials from the ground up.
When building courses for employers, institutions should strike a balance between repackaging and customizing content to ensure courses meet each company’s unique needs. Often, institutions receive upfront payments to fund the customized content in courses. Another benefit of mixing repackaged content with custom content is that it requires less investment, increasing revenue potential due to lower upfront costs.
For example, Washington University in St. Louis offers tiered privileges to corporate members, including employee tuition discounts, complimentary seats for select offerings, and lunch-and-learn sessions. When pursuing this strategy, higher ed leaders must articulate how course content will solve business problems to build a level of trust with employer partners.
2. Expanding athletics programs
In addition to contributing to campus culture and school pride, college athletics have the potential to bring in additional revenue through ticket sales, sponsorships, and net tuition revenue. But between conference shifts, name, image, and likeness (NIL) policies, and changes to the transfer process, institutions are facing the most disruptive period in athletics history.
Out of approximately 1,000 NCAA member institutions, only 28 generate more revenue than expenses. At private institutions, institutional support accounts for up to 83% of athletics revenue, while most Division I public institutions generate only 15-25% of revenue from sources outside institutional subsidies. Given these challenges and the current lack of revenue generation, expanding athletic programs often leads to more financial risk than reward.
Promising alternative: Explore corporate sponsorships
While sponsorships within athletics have proven successful, institutions should explore diverse corporate sponsorships in other areas as the athletics landscape shifts. Other sponsorship opportunities include career fairs, hackathons, business incubators, and innovation hubs. These types of sponsorships are a great way to begin cultivating strong and more financially beneficial partnerships with corporate partners.
Coastal Carolina University offers tiered, annual career services sponsorship packages ranging from $1,000 to $10,000. Entry-level tiers provide table space and smaller amenities, whereas the highest tier provides interview rooms, eight sponsorship engagement activities, and recognition at all career services events throughout the year. Bowling Green State University’s Schmidthorst College of Business offers a diverse menu of opportunities for organizations to sponsor student organizations (e.g., National Association of Black Accountants), student teams or competitions, and signature events.
By customizing corporate partnerships to align with both the institution’s mission and the partner’s needs, institutions can create mutually beneficial relationships that advance education, foster community engagement, and invest in the development of the future workforce, all while bringing in extra funds. These sponsorship opportunities also expose students to companies for future career prospects while the companies build a talent pipeline.
3. Increasing parking fees
While parking fees require little upfront investment, they also normally yield little return. Colleges and universities often implement parking fee increases incrementally, typically by just a few percent each year, generating minimal revenue. The University of Michigan implemented a 4% increase for all permit types, with increases ranging from $0.33 to $6.50 per month based on permit type, totaling $3.96 to $78.00 per permit annually.
Additionally, institutions often spend several years without raising parking fees, which lengthens the amount of time it takes to generate additional, reliable revenue through parking fees. In many cases, the revenue generated covers only the costs of specific construction projects or improvements, resulting in a lack of surplus dollars for other purposes.
Promising alternative: Rent campus spaces
Instead of increasing parking fees, revitalize underutilized spaces that are primed for rental, such as sports and recreation facilities. Many institutions charge hourly fees or offer annual memberships for access to facilities across campus. For example, Harrisburg Area Community College offers community members access to pickleball courts for a $225 annual fee. Similarly, the University of Richmond charges $10 an hour for access to recreational spaces at its Weinstein Center.
Institutions also implement membership tiers for larger spaces, such as fitness centers. For example, Brooklyn College offers both six-month and one-year recreational facility memberships to the community with different tiers for individuals, individuals with a partner, children, and senior citizens. Opening facilities to the community not only brings in additional revenue with little upfront costs but can also improve town-and-gown relationships.
4. Increasing research output
Many universities aspire to increase research output in the hopes of strengthening their institution’s visibility and attracting companies interested in purchasing research. However, increasing research and commercializing intellectual property do not guarantee greater revenue.
Oftentimes, the costs of research outpace any revenue generated. Grants and other forms of funding do not fully subsidize labor and other utilities required, and the Council on Governmental Relations reports that institutions already contribute 45 cents for every federal research dollar spent. Institutions that achieve monetary success from research output often do so more through a stroke of good luck than through best-practice strategies.
This phenomenon illustrates the “Gatorade Problem”: top performers who generate research-related income are bolstered by the gains of a hit product, such as the University of Florida’s creation of Gatorade. If revenue isn’t already coming in, investing in more research is unlikely to change that.
Promising alternative: Monetize research space
While research itself doesn’t generate large amounts of revenue for every institution, many colleges and universities can monetize research space to increase revenue. Renting research labs and equipment to outside organizations presents an opportunity for revenue by using already-built space. This strategy also has the added bonus of increasing an institution’s visibility in the community.
The University of California, Berkeley (UC Berkeley) rents research facilities and equipment to external parties, housed at the Berkeley Research Infrastructure Commons, a group of UC Berkeley’s core R&D facilities, startup incubator labs, and other resources. UC Berkeley and external partners enter into a standard agreement that grants permission to use the facilities during weekends and evenings, which avoids classroom disruption.
Institutions that have specialized research facilities can generate revenue by renting space to businesses and organizations for specific purposes. For example, Charles Sturt University in Australia leases land and facilities in its AgriPark, including labs, animal care space, and field sites, to businesses and researchers in the region. Additionally, renting out these spaces can provide students with the opportunity to network or intern with these businesses, further supporting students’ career goals and outcomes.
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Want to establish a sustainable core facilities program?
Learn more about core facilities and making the best use of your research space in EAB’s report.
It’s time to rely on proven revenue strategies
As higher education grapples with financial challenges, stakeholders must continue suggesting ways to secure additional revenue to ensure financial sustainability. When exploring these opportunities, leaders must maintain realistic expectations and ensure alignment with the university’s mission. Redirecting the inspiration and passion for riskier ventures toward more proven pursuits is one of the many strategies senior leaders must leverage to improve the financial footing of their institutions.
For help with selecting revenue tactics that align with your institutional goals and available resources, check out EAB’s compendium of replicable alternative revenue strategies. This resource outlines relative dollar estimates and time to achieve ROI for each tactic, and it provides three tools that will help you evaluate and prioritize alternative revenue opportunities for your institution.
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