More than $76 billion in federal aid during the Covid-19 pandemic helped keep many colleges afloat amid a very rough economic time. But which institutions relied on these funds the most?
To answer that question, The Chronicle analyzed more than 1,600 institutions that saw drops in net tuition revenue from 2019 to 2021 to see what impact this influx of federal funding had on their bottom lines.
How colleges spent billions in federal relief.
The influx of federal money relative to tuition revenue, which is typically the fiscal lifeblood of many institutions, was substantial. For example, four-year institutions reported a nearly 60-percent jump in federal funds, from $30 billion in 2019 to $48 billion in 2021. Meanwhile, despite broad concerns about enrollment drops, tuition revenue generally stayed consistent with 2019 figures.
While it’s difficult to say definitively that these increases in federal support were due solely to the Higher Education Emergency Relief Fund, or Heerf, recent history offers some helpful context. Over time, federal funding has tended to stay consistent, which suggests that Heerf was the source of the fluctuation.
The growth in federal support overall between 2019 and 2021 had notable effects on how individual institutions brought in revenue. If we were to look at a group of about 2,500 degree-granting institutions, each with total annual revenue of $10 million or more, in 2019 nearly six out of 10 of them derived less than a tenth of their total revenue from federal grants. In 2021, that number of institutions shrank by nearly a quarter.
Doctoral institutions saw increases in federal-grant funding that far outstripped their losses in tuition revenue. Of the top 20 institutions with the greatest increases in federal funding, 19 were doctoral institutions, like the University of California at Irvine and Duke University. This group saw total increases in federal grants of more than $2.2 billion.
Private master’s and private baccalaureate institutions had much smaller margins between their lost revenue from tuition and increases in federal grants.
On a dollar-for-dollar basis, some institutions that saw their tuition revenue decrease by $500,000 or more were able to make up the difference thanks to the increase they received in federal support.
For about half of the institutions analyzed by The Chronicle, the share of revenue that came from tuition declined by more than 5 percentage points. Of that segment, eight out of 10 saw their share of revenue from federal grants increase. A smaller subset, of about 350, experienced an increase in revenue from federal grants of more than 5 percentage points.
Methodology
This analysis looked at over 1,600 Title IV, degree-granting U.S institutions that reported over $10,000,000 in revenue in 2019 and had net tuition-revenue loss between 2019 and 2021. For-profit institutions were not included.
The federal-grants category in the U.S. Education Department’s Integrated Postsecondary Education Data System, or Ipeds, incorporates more than just the funds that were distributed through Heerf. Some Heerf funds could have been reported in the 2020 fiscal year. The values used in this analysis do not include Heerf funds that were given to students.
Some institutions do not have values for 2019, which may be due to changes in their Ipeds identifiers between years.
Federal funds are reported in Ipeds as the federal-nonoperating grants for GASB-reporting institutions and federal grants and contracts for FASB-reporting institutions.
