- Adjusted for inflation, state funding for higher education has fallen by more than $7 billion since 2008, before the Great Recession caused deep cuts in spending on public two- and four-year colleges, according to a new report from the Center on Budget and Policy Priorities (CBPP).
- While state revenues have largely returned to pre-recession levels, higher education funding has been slow to increase. Funding was largely flat from the 2017-18 to 2018-19 academic years, with an average 3.4% increase per student in 18 states and an average 2.6% decline in 31 states.
- Most states are spending considerably less per student, averaging 16%, or $1,502, less in 2018 as compared to 2008, with spending down by more than 30% in nine states. Only four states are spending more: California, Hawaii, Wyoming, and, with the biggest increase, North Dakota, where spending rose 16.1% during the period.
- Tuition increases averaging 36% at four-year public colleges from 2008 to 2018 can be linked to the reduced state funding. They have outpaced median family income, the report notes, taking about 14% of a family's paycheck in 2008 but more than 16% in 2017.
The CBPP report argues that states can do more to make college accessible to the growing number of prospective minority and low-income students. It cites data from the 2015-16 academic year that found nearly one-quarter of financial aid from state colleges and universities was awarded based on merit and regardless of household income. Not only should states increase funding to public colleges and universities that need it most and perform well, the report says, but they should direct it strategically to the students who have the greatest need.
While colleges look for ways to bring in more students from disadvantaged backgrounds and increase attainment while absorbing the budget cuts outlined by the CBPP, several headwinds are contributing to enrollment declines across the board.
As a result, public and private colleges are competing for students by providing more institutional financial support. The University of Illinois announced free tuition and fees for students whose family income falls below the state median, for example. A National Association of College and University Business Officers report earlier this year showed that while the average published price for tuition and fees at private, nonprofit colleges increased 42% from 2008-09 to 2017-18, the institutional grant aid provided to freshman rose 78%. As a result, the net tuition cost per-freshman student increased just 19% during the period.
There are no indications that states are likely to dramatically increase higher education funding in the near future, although the CBPP report was quickly used by groups advocating for more funding in Alabama, North Carolina and Ohio, where left-leaning nonprofit think tank Policy Matters Ohio called the state's investment in higher education over the course of the last decade "piddling." State funding to Ohio colleges and universities fell 18.1% per student from 2008 to 2018, more than the national average decline of roughly 16%.