College Funding In Context: Understanding The Difference In Higher Education Appropriations Across The States

Source: David Weerts, Thomas Sanford, Leah Reinert, Dēmos, December 2012

From the summary:
…State appropriations have historically been the most important source of funding for higher education, but over the past two decades that support has waned. Between 1990 and 2010, real appropriations per full time equivalent student (FTE) declined by 26.1 percent, putting funding today at its lowest level since 1990. As real state spending per full time student decreased, institutions made up the difference by raising the price of attendance, shifting costs that were once a social investment onto students and their families instead. Over the same 20 year period, tuition costs have increased by 112 percent at 4-year public universities and by 71 percent at 2-year colleges. In many cases states attempted to mitigate the burgeoning cost of attendance by expanding financial aid programs, but the increasing reliance on merit-based aid means that assistance often fails to reach those low-income households who need it most. As tuition costs grew by 112 percent between 1990 and 2010, the median household income stagnated, growing by just 2.1 percent. With rising tuition and stagnating incomes, students and their families are taking on record levels of debt in order to pay for the opportunity to attend a college or university. In 2011, the total student debt held by American households outstripped credit card debt for the first time, a burden of more than $1 trillion.

Recessions put even more pressure on the higher education system by causing a shortfall in state revenues that tightens budgets and makes state investments more tenuous. These budgetary pressures can affect appropriations for years after the recession ends, and over the past generation the length of time that it has taken higher education funding to return to normalcy following a recession has increased….

…We analyzed patterns in state appropriations for higher education across all 50 states for the 20 year period from 1988 to 2009, looking at a broad array of factors that influence budgetary decisions. This study evaluates the importance of those factors, grouping them into three categories of influence on the outcome of state funding for higher education: economic, political, and cultural….

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