The average price of private college tuition in the US for the 2009-10 school year (not including room and board) was $26,273.
Let’s say that the typical college student takes 15 hours of coursework per semester, and that the typical semester is 16 weeks long, with 2 semesters per school year. The price each student pays for in-class time = $26,273/15/16/2 = $55 per hour. Let’s suppose that, for every hour spent in class, the professor spends 2 hours outside of class preparing, marking papers, etc. So now it’s $55/3 = $18/hour that each student pays for his/her share of the professor’s time for teaching that class.
Dr. Jones is teaching a 4-hour class with 25 students enrolled. For that class Dr. Jones brings in $55 x 4 x 25 = $5,500 per week for 12 hours’ work. If Dr. Jones teaches 3 courses per semester, he will bring in ($5,500 per week) x (16 weeks) x (3 classes per semester) x (2 semesters) = $528,000 per year. In doing so he will have put in 12 x 16 x 3 x 2 = 1152 hours of work. That’s a billable rate of $458 per hour.
A reasonable estimate is that, on average, professors (including assistants, associates, and part-timers) in US private colleges make about $55,000 plus benefits = $65,000 per year.
Divide this $65K annual pay by the 1152 teaching hours worked, and the teacher makes $56.42 per hour. That’s 56.42/458 = 12.3% of the billable hourly rate. If the private college students paid their professors at this rate, the annual tuition cost would be $26,273 x .123 = $3,237 per year. Of course the teachers and students would have to find someplace for the classes to meet, clean the place up after they’re done, figure out how to function without the administrators, etc.