State Higher Education Finance Report FY 2010

Source: State Higher Education Executive Officers, 2011

The share of total revenue for general operating expenses for higher education originating from net tuition revenue showed an increase from 33.6 percent in 2008 to 36.2 percent in 2010. Tuition revenue collected by independent (private, not‐for‐profit) and for‐profit institutions is not included in this total.

Of the $88.5 billion in state and local support during 2010, about 78 percent was allocated to the general operating expenses of public higher education. Special purpose or restricted state appropriations for research, agricultural extension, and medical education accounted for another 12 percent of the total. The percent of total support allocated for financial aid to students attending public institutions increased from 6.4 percent in 2009 to 7.0 percent in 2010. The remaining three percent supported students attending independent institutions and independent institutions’ operating expenses.

Analysis of the data indicates that constant dollar per student state and local funding for public colleges and universities decreased between 2009 and 2010. State and local support (excluding appropriations for research, agricultural extension, and medical education) per full‐time‐equivalent student was $6,454 in 2010, a $497 constant dollar (or 7 percent) decrease from 2009, and the lowest in the last 25 years. This decrease in per student support, despite relatively stable state support, was driven by an increase in enrollments of more than 6 percent between 2009 and 2010.

Higher education has historically experienced large increases in enrollment during times of economic recession, and this tendency has been accentuated by the growing economic importance of postsecondary education. Nationally, FTE enrollment grew 6 percent between 2009 and 2010, 15 percent between 2005 and 2010, and 35 percent between 2000 and 2010.

Highlights of the SHEF report provided below illustrate the long‐term patterns, shorter‐term changes, and state-level variables affecting the resources available to support higher education between 1985 and 2010. These and other factors that shape higher education funding are examined in more detail in the sections of the full report that follow.

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