States Are Still Funding Higher Education Below Pre-Recession Levels

Source: Center on Budget and Policy Priorities

PDF of this report (27pp.)

Most states have begun in the past year to restore some of the cuts they made to higher education funding after the recession hit.  Eight states, though, are still cutting, and in almost all states — including those that are have boosted their support — higher education funding remains well below pre-recession levels.  The large funding cuts have led to both steep tuition increases and spending cuts that may diminish the quality of education available to students at a time when a highly educated workforce is more crucial than ever to the nation’s economic future.

After adjusting for inflation:

• Forty-eight states — all except Alaska and North Dakota — are spending less per student than they did before the recession.[1]
• States cut funding deeply after the recession.  The average state is spending $2,026 or 23 percent less per student than before the recession.
• Per-student funding in Arizona, Louisiana, and South Carolina is down by more than 40 percent since the start of the recession (Louisiana is among the eight states that continued to cut funding over the last year).
• Wyoming, West Virginia, Louisiana, Wisconsin, and North Carolina cut funding the most over the last year.  Of these, all but Wyoming have cut per student funding by more than 20 percent since the recession hit.
• In the last year, 42 states increased funding per student, by an average of $449 or 7.2 percent.[2]

Deep state funding cuts have major consequences for public colleges and universities.  States (and to a lesser extent localities) provide 53 percent of the revenue that can be used to support instruction at these schools.[3]  When this funding is cut, colleges and universities generally must either cut educational or other services, raise tuition to cover the gap, or both.

Indeed, since the recession, higher education institutions have:

• Increased tuition.  Public colleges and universities across the country have increased tuition to compensate for declining state funding and rising costs.  Annual published tuition at four-year public colleges has risen by $1,936, or 28 percent, since the 2007-08 school year, after adjusting for inflation.[4]  In Arizona, published tuition at four-year schools is up more than 80 percent, while in two other states — Florida and Georgia — published tuition is up more than 66 percent. 
• These sharp increases in tuition have accelerated longer-term trends of reducing college affordability and shifting costs from states to students.  Over the last 20 years, the price of attending a four-year public college or university has grown significantly faster than the median income.[5]  Federal student aid and tax credits have risen, but on average they have fallen short of covering the tuition increases.
• Cut spending, often in ways that may diminish access and quality and jeopardize outcomes.  Tuition increases have compensated for only part of the revenue loss resulting from state funding cuts.  Public colleges and universities have cut faculty positions, eliminated course offerings, closed campuses, shut computer labs, and reduced library services, among other cuts.  For example, since 2008, the University of North Carolina at Chapel Hill has eliminated 493 positions, cut 16,000 course seats, increased class sizes, cut its centrally supported computer labs from seven to three, and eliminated two distance education centers.[6]