Administration

State Spending on Higher Education Shows 'Sizable' Increase

April 13, 2015

The buds of a recovery in state and local support for higher education that appeared in 2013 blossomed even more in the 2014 fiscal year, a new report shows. But the effects of the Great Recession still linger, according to the State Higher Education Executive Officers association.

Even with what the group called a "sizable" 5.7 percent increase in spending over the previous year’s figure, the $86.3-billion in overall state and local funding remains below 2008-11 levels in inflation-adjusted dollars.

More than three out of every four of those dollars go to support public colleges and universities. (The rest goes to financial aid, research, agricultural extension, and other purposes.) And at public colleges, too, there were small positive signs. For the first time in years, public colleges’ reliance on tuition revenue dipped slightly — from 47.7 percent to 47.1 percent — on a per-student basis relative to what they received from state and local appropriations.

George Pernsteiner, president of the state officers’ group, called this a recommitment by states to support higher education. The findings are presented in the new "State Higher Education Finance" report.

The shift was due to a combination of increases in spending for higher education in 37 states and an overall dip in enrollment.

Andy Carlson, a senior policy analyst at the officers’ association, said the primary cause for the change in that per-student calculation came from the 4-percent increase in spending going directly to public colleges, although the 1.3-percent decline in full-time-equivalent enrollment was also a factor. Enrollment hit a peak in 2011 but has tapered every year since then.

In dollar terms, educational appropriations rose to an average of $6,552 per full-time equivalent student, an increase of 5.4 percent, while tuition accounted for $5,777, an increase of 2.7 percent.

The report calls the increase in public funding a sign of a "more pronounced economic recovery" than the more modest one recorded in 2013. But it also notes that in context of historic trends, today’s students bear a far greater share of the costs than students of a generation ago. In 1989, net tuition represented 24.5 percent of total educational revenue at public colleges. In fact, 25 states now receive more per-student revenue from net tuition than from appropriations, the report notes. Twenty-eight states are above the national average of 47.1 percent in that proportion; 15 of those are above 60 percent. States also vary widely in the share of educational costs borne by tuition; it’s lowest in Wyoming at 15.1 percent and highest in Vermont at 84.5 percent,

Mr. Carlson, the primary author of the report, noted that even after a second consecutive year of per-student funding increases nationally, appropriations per student are still nearly 19 percent below prerecession levels. But the national data obscure differences in state spending. Only three states have raised funding on a per-student basis since 2008 — Alaska, Illinois, and North Dakota — and the bulk of the increases in Illinois have gone toward meeting unfunded pension obligations.

Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her new book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.