While enrollment is down at the nation’s public colleges, state funding for higher ed is up — and students have been footing less of the bill for their education over the last four years.
State and local support for higher ed increased nearly 5 percent in the 2022 fiscal year, according to the latest State Higher Education Finance report, published on Thursday by the State Higher Education Executive Officers Association. States allocated more money for higher education both in the form of financial aid, which increased 2 percent, and general public operations, which increased 7 percent. (The report adjusted those proportions for inflation.)
The SHEF report, released annually since 2003, is a data set detailing state and local funding for both two- and four-year higher-education institutions, as well as tuition revenue and enrollment. The association measures state support and net tuition revenue per student by considering enrollment on the basis of full-time-equivalent students, or FTE.
The growth in higher-ed funding since the pandemic-related economic downturn of 2020 bucks a historical trend, according to the report. Recessions traditionally lead to lower state support for public higher education, which prompts colleges to raise tuition and other costs for students.
In the 2022 fiscal year, the “student share” — which the association defines as the percentage of total revenue that comes from tuition for each full-time student — decreased in 32 states and Washington, D.C. In Connecticut, Kansas, Louisiana, and New Jersey, the student share has fallen below 50 percent of total revenue in each of the last five years.
The report’s authors, Kelsey Kunkle and Sophia Laderman, attributed that trend to three factors: the national enrollment decline, increasing commitments at the state-government level to higher-education funding, and some federal stimulus money given to states for higher education during the pandemic.
Still, Kunkle told The Chronicle, students’ tuition and fees continue to make up far more of public colleges’ revenue — nearly 42 percent — than in 1980, when that share was just 21 percent.
Robert Kelchen, a professor in the department of educational leadership and policy studies at University of Tennessee at Knoxville who studies higher-education finance with a focus on state funding, said the report is significant because states and colleges often use it as a barometer with which to compare one another.
“There have been states and universities that use this to try to advocate for more funding,” he said. “And then there are some states that try to match their peers.”
Here are three other key takeaways from this year’s report.
Some states are reinvesting in higher ed, but others are still cutting.
States’ higher-ed funding over all has recovered to levels not seen since before the 2008 recession. In 28 states, however, the funding remains lower than it was before 2008. From 2008 to 2018, public-college funding dropped 9.1 percent.
Finances have generally begun to recover from pandemic pressures, Kunkle said. “State budgets were hurting in 2021, but they’ve gotten a bit better,” she said.
State financial aid, which accounted for nearly 10 percent of all higher-ed appropriations, was at a high of $990 per full-time student in 2022.
The state with the largest funding increase was Nevada, with a 27-percent jump — in part due to money in the federal appropriations bill that passed Congress in March 2022. It contained $22 million for Nevada public colleges.
The largest decrease, at more than 28 percent, was in Wyoming, whose Legislature cut $31.3 million in June 2021 from the University of Wyoming, the largest higher-ed institution in the state and the only public four-year college.
Nationally, public-college revenue per full-time student — from both state appropriations and net tuition revenue — totaled $17,393, another record high. But the trend doesn’t hold in most of the country; only 11 states hit record highs.
Federal pandemic relief provided one last windfall.
State and local funding for higher education totaled $120.7 billion in the 2022 fiscal year, with $2.5 billion — or about 2 percent — coming from federal stimulus money. In the future, colleges won’t be able to count on that support: Pandemic-relief funding has nearly run out.
Thirty-nine states used some stimulus funding for higher education in 2022, according to the report.
The money both covered general state costs from the pandemic, preventing higher education from taking a hit from spending in other budget areas, and raised operating appropriations for higher education.
Some states ... are already feeling a fiscal cliff now that federal stimulus is waning.
In Vermont, more than 42 percent of state appropriations for higher education came from federal stimulus money. In the previous year, both Vermont and Colorado used federal stimulus dollars for around half of their higher-education appropriations, but this year Colorado returned to regular state funding.
“We’re really trying to hit home that it’s really important for states to prioritize and continue committing to funding higher education,” Kunkle said. “Because right now we do have some states that are already feeling a fiscal cliff now that federal stimulus is waning.”
Enrollment challenges will be a long-term problem for public higher ed.
From 2021 to 2022, public-college enrollment declined 2.5 percent, the second-largest decrease since 1980. The year before, public higher ed experienced a 3-percent drop.
The report emphasizes that the bleeding is worse at community colleges. Net tuition revenue declined 7 percent at two-year institutions, compared with a fraction of 1 percent at four-year institutions in the last year.
