State Cuts to Higher Education Threaten Access and Equity

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A decade since the Great Recession hit, state spending on public colleges and universities remains well below historical levels. Overall state funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level, after adjusting for inflation. (See Figure 1.) In the most difficult years after the recession, colleges responded to significant funding cuts by increasing tuition, reducing faculty, limiting course offerings, and in some cases closing campuses. Overall state funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level. Funding has rebounded slightly since then, but costs remain high and services in some places have not returned.

The promise to past generations of students in America has been that if you work hard and strive, public colleges and universities will serve as an avenue to greater economic opportunity and upward mobility. For today’s students — a cohort more racially and economically diverse than any before it — that promise is fading.

Rising tuition threatens affordability and access leaving students and their families –– including those whose annual wages have stagnated or fallen over recent decades — either saddled with onerous debt or unable to afford college altogether. This is especially true for students of color (who have historically faced large barriers to attending college), low-income students, and students from non-traditional backgrounds. Higher costs jeopardize not only the prospects of those individual students but also the outlook for whole communities and states, which are increasingly reliant on highly educated workforces to grow and thrive.

To build a prosperous economy — one in which the benefits of higher education are broadly shared and felt by every community regardless of race or class — lawmakers will need to invest in high-quality, affordable, and accessible public higher education by increasing funding for public two- and four-year colleges and by pursuing policies that allow more students to pursue affordable postsecondary education. By doing so, they can help build a stronger middle class and develop the entrepreneurs and skilled workers a strong state economy needs.

Of the 49 states (all except Illinois)[1] analyzed over the full 2008-2018 period, after adjusting for inflation:[2]

    45 spent less per student in the 2018 school year than in 2008. The only states spending more than in 2008 were California, Hawaii, North Dakota, and Wyoming.
    States cut funding deeply after the recession hit. The average state spent $1,502, or 16 percent, less per student in 2018 than in 2008.
    Per-student funding in nine states — Alabama, Arizona, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Pennsylvania, and South Carolina — fell by more than 30 percent over this period.
    In 31 states, per-student funding fell between the 2017 and 2018 school years. In 15 of these states, funding also fell the previous year.
    In 18 states, per-student funding rose between the 2017 and 2018 school years.
    Overall, per-student funding essentially remained flat between 2017 and 2018.[3]

Deep state funding cuts have had major consequences for public colleges and universities. States (and, to a lesser extent, localities) provide just over half of the costs of teaching and instruction at these schools.[4] Over the last decade, higher education institutions have:

    Raised tuition. Annual published tuition at four-year public colleges has risen by $2,651, or 36 percent, since the 2008 school year.[5] In Louisiana, published tuition at four-year schools has doubled, while in six other states — Alabama, Arizona, California, Colorado, Georgia, and Hawaii — published tuition is up more than 60 percent.

    These sharp tuition increases have accelerated longer-term trends of college becoming less affordable and costs shifting 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. Although federal student aid has risen, on average it has fallen short of covering the increases in tuition and other college expenses.

    Reduced academic opportunities and student services. Tuition increases have compensated for only part of the revenue loss resulting from state funding cuts. Over the past several years, public colleges and universities have cut faculty positions, eliminated course offerings, closed campuses, and reduced student services, among other cuts.

A large and growing share of future jobs will require college-educated workers.[6] Sufficient public investment in higher education to keep quality high and tuition affordable, and to provide financial aid to students who need it most, would help states develop the skilled and diverse workforce they will need to compete for these jobs.

Sufficient public investment can only occur, however, if policymakers make sound tax and budget decisions. To make college more affordable and increase access to higher education, many states need to consider new revenue to fully make up for years of cuts.