How do colleges and universities spend their money? To most, it's a black box. The public looks at tuitions, states look at appropriations, trustees look at the endowment, and department managers look at their budgets. How colleges actually spend their money is barely understood by the general public and even many policy makers. In the current economic environment, opacity about college spending has to give way to greater transparency about spending, and an understanding of the relationship between spending and performance. "Trends in College Spending: Where Does the Money Come From? Where Does It Go?" provides a look inside the black box of higher education finance, highlighting financial trends in operating budgets at public and private nonprofit higher education institutions. Using data that all higher education institutions report annually to the U.S. Department of Education, this report updates earlier work by the Delta Cost Project, focusing on the period from 2002 to 2006, the latest year in which spending information is available. The fiscal data presented in this report include operating revenues and expenditures per full-time equivalent (FTE) student and adjusted for inflation using the Consumer Price Index (CPI); all data are presented in 2006 dollars. Understanding spending requires knowledge of the interaction between enrollment patterns, revenues, spending, and results. This report moves sequentially through each of these, to show: (1) Enrollment patterns; (2) Revenue trends; (3) Spending for education; and (4) Spending increases. Data appendix is included. (Contains 19 figures and 6 footnotes.) [Funding for this paper was provided by Making Opportunity Affordable, an initiative of Lumina Foundation for Education. For "Trends in College Spending: Where Does the Money Come from? Where Does It Go? Executive Summary," see ED539419.]