Report: State Funding for Higher Ed Only Halfway Recovered from the Great Recession

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The losses of the Great Recession continue to haunt higher education. Despite five years of increases, state funding for higher education has only halfway reached pre-recession levels of funding. And as of 2017, public institutions in more than half of all US states are more reliant on tuition dollars than on public appropriations.

The newly released 2018 State Higher Education Finance (SHEF) report by the State Higher Education Executive Officers Association (SHEEO) finds that:

  • Educational appropriations per full-time equivalent enrollment (FTE) remained mostly flat after inflation, with a 0.2 percent increase to $7,853 per student in 2018, roughly $1,000 below their pre-recession level. This is some of the smallest changes ever in per-student revenues for higher education.
  • Public higher education is more dependent on tuition revenue than educational appropriations in over half of all states. Twenty-two states saw declines in per-student appropriations in fiscal year 2018. Despite this, state financial aid for students at public institutions has increased for four straight years.
  • Full-time equivalent enrollment (FTE) from 2017 to 2018 declined in 35 states and Washington DC. Since the economy has been recovering from the recession, the pace of enrollment in higher education has slowed.

With a decline in state appropriations, which caused a growing reliance on net tuition as a revenue source, public colleges are increasingly subject to market forces that de-emphasize access and prioritize private funding.

In the wake of the bribery scandal, the need for improved state support for higher education has become increasingly obvious to ensure that public expectations for access to postsecondary education are met. The effective privatization of public higher education virtually ensures that concerns about the systemic influence of wealth will be exacerbated.

More state-level funding is needed to address college affordability and restore appropriations to pre-recession levels.

Read more in-depth details about the data and state level trends in the full report.

Gustavo Lara is NACAC’s project coordinator of educational content and policy. You can reach him at glara@nacacnet.org.

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