Per-student state and local funding for higher education has fallen 12.5 percent over the last five years, reaching its lowest point in the 25 years of the study.
The “public” component of public higher education is rapidly eroding, with public colleges now getting more than 43 percent of their revenues from student tuition as opposed to state and local taxpayers, compared to less than 30 percent as recently as a decade ago.
The figures come from a new report out March 16 offering the latest snapshot of who pays the bill for America’s public colleges and universities, which educate roughly 70 percent of students. SHEEO, a group representing state higher education officials, finds that amid surging demand for college, per-student state and local funding for higher education has fallen 12.5 percent over the last five years and reached its lowest point in the 25 years of the study.
Though figures varied widely by state, on average state and local governments provided public colleges and universities with $6,290 per student in 2011. In 2008, the comparable figure, accounting for inflation, was $7,488.
In fact, total state spending on higher education has been fairly stable over the last three years, between $87 billion and $89 billion, and even increased slightly in 2011, thanks in part to federal stimulus funds that provided 31 states with $2.8 billion for higher education last year. Some observers contend that should have been enough during tough times and colleges should have done more to improve productivity.
But every state has more students in college than five years ago. Nationally, enrollment is up more than one-third over the last decade and 8 percent since 2009, so there is less to spend per student, leading to waiting lists for classes and other cutbacks across higher education.
Spread more thinly, public colleges have relied increasingly on tuition, which provided them record revenue of $4,773 per student in 2011. But the SHEEO figures show public colleges have lost more from state funding cuts than they’ve gained in tuition. Overall, colleges’ total revenues per student, counting both state funds and tuition, are down almost 6 percent since 2008.
The increased tuition revenue isn’t necessarily all coming out of students’ pockets. Increases in federal financial aid such as Pell Grants have helped more students pay at least part of those tuition bills, though borrowing is up, too. After factoring in financial aid, the average net price families pay for tuition and fees at public colleges is just under $2,500 a year, according to the latest College Board figures, or only about $170 more than five years ago.
Still, the figures do confirm both a philosophical and financial shift accelerated by the economic downturn and accompanying state budget crises. State support for public higher education has always rested on the premise that it provides a public benefit which taxpayers should support.
They still do, and on average nationally, still chip in more of each student’s bill than the students pay themselves. But with a record 43 percent of educational revenue now coming from students—nearly double the percentage in the mid-1980s—a symbolically important crossover point, where students on average pay more than half the true cost of their education, may now be just a few years away.
The SHEEO figures show that in 20 states, public colleges already get more per student from students themselves than from state and local governments. In Virginia, for instance, a decade ago public colleges collected $3,758 per student in tuition in 2011 dollars, and state and local governments kicked in more than $2 for every $1 collected from students. By 2011, tuition revenue was up $6,430 per student and public funds just $5,225 per student—one-third less than a decade before.
A decade ago in Michigan, meanwhile, public colleges got more than $9,000 (also in 2011 dollars) per student, and collected around $6,000 in tuition per student. Last year the state provided barely $5,000, and students kicked in nearly $9,500 each on average.
“Students and their families who also have financial pressures are still making the sacrifice to come to higher education,” said SHEEO president Paul Lingenfelter. “But you have to worry about people who should be improving their employability who are not participating because of the cost.”
He added: “Certainly there’s a lot of pressure on institutions to stop raising tuition. But it’s very hard to offer students a quality education and also keep absorbing more students if there are inadequate revenues to support that.”
Some states are starting to replenish higher education budgets this year, but others are imposing more cuts. SHEEO says despite an apparent economic recovery, the next few years may be even more challenging now that the last of the federal stimulus were spent by last fall. Though fiscal 2012 figures aren’t included in this report, preliminary data collected by Illinois State University showed state appropriations for higher education down more than 7 percent.