It’s been a long time since state governments paid the lion’s share of public higher education costs. In 20 states, tax credits and revenue from state lotteries don’t even pay half the cost. Since 1980, net tuition revenue as a percentage of total public college revenue has doubled from 20.9% three decades ago to 42.1% in 2021, according to the latest higher education financial report. of the State Higher Education Executive Officers Association. Student tuition at New Hampshire’s public four-year colleges, for example, accounts for 75.5% of state college revenue. In Arizona, tuition is 79%. Like most private, nonprofit colleges, public colleges nationwide now find themselves in the precarious position of being largely dependent on the success of their enrollment offices.
Ironically, Covid-19 has brought some relief to public colleges as state officials – seeking to revive the workforce and fuel federal stimulus funds – funnel more money into education. superior. And colleges, alert to students’ growing price sensitivity, held back tuition hikes during the brief pandemic-inspired recession.
States spent 4.5% more money per student on higher education (after adjusting for inflation) in fiscal year 2021 compared to the previous year, injecting $113.2 billion in the sector, according to the report. The spending hike is in stark contrast to past recessions, when publicly funding colleges is usually the first thing to do while states balance their budgets. “[During a recession] normally tuition and fees would go up at the exact time when students and families can least afford it,” said Will Doyle, professor of public policy and higher education at Vanderbilt University.
In all previous recessions since 1980, state education spending per student has declined as a result of the economic downturn, while college enrollment has increased. The 2020 recession broke this cycle.
Public colleges enrolled 323,952 fewer full-time students in fiscal year 2021 — the 10th consecutive year of widespread enrollment declines, the report said. This attrition is concentrated in two-year colleges, where enrollment fell 6.1% between 2020 and 2021, compared to a 0.9% drop in four-year public ones. Only three states — Delaware, Illinois and Utah — saw full-time enrollment increase in 2021.
The increase in per-student funding doesn’t necessarily reflect state officials’ desire to better support public colleges, said Sophia Laderman, associate vice president of SHEEO and co-author of the report. “A drop in enrollment will naturally lead to an increase in education credits per student, which is part of it,” she said.
But the changes to the number of students do not account for the entire increase in funding. Throughout the pandemic, public officials have made education and retraining key parts of their economic recovery plans. Education funding and workforce development were frequent themes in state of the state addresses from governors in 2021, according to analysis by the States Education Commission. Workforce development continued to be a priority for governors last winter, and college affordability also emerged as a popular issue.
This was also true across party lines. Public funding for higher education does not reliably align with state-level policy, Doyle said.
“Georgia spends about the same [per student] like California, and there are completely different policies in the two states. Tennessee spends 50% more than Oregon,” he said.
State and local economies have recovered faster in 2021 than many experts, including Doyle, expected. As a result, a number of states quickly rolled back cuts to higher education funding from the start of the pandemic. With money from federal stimulus bills, states have pledged to invest more money in public higher education programs.
Colorado, Minnesota, New Hampshire, Wyoming, and Washington, DC paid for at least 20% of public funding for higher education in fiscal year 2021 with federal stimulus dollars. In Vermont, a state that has historically provided little government support for its public colleges, state appropriations for higher education increased 44.6% in fiscal year 2021. After adding funding federal stimulus package, support rose 98.6%. Still, students generally pay for public colleges in Vermont. The student share—the percentage of the state higher education public budget funded by tuition fees—accounts for more than three-quarters of Vermont’s higher education revenue.
Recent increases in state support for higher education could be usurped by rising levels of inflation. In that case, colleges could go back to relying heavily on rising net tuition revenue to fund their operations. But it’s getting harder and harder to raise tuition every year, Doyle said.
“Before, there were serious conversations where people said, ‘Tuition fees may go up, and students and families will find a way to pay them. Students can work or they can borrow money, it’s not a big concern,” Doyle said. “You don’t tend to hear that anymore.”