Soaring Tuitions: Are Public Funding Cuts to Blame?

Source: Rajashri Chakrabarti, Maricar Mabutas, and Basit Zafar, Federal Reserve Bank of New York, Liberty Street Economics blog, September 19, 2012

Public colleges and universities play a vital role in training a state’s workforce, yet state support for higher education has been declining for years. As a share of total revenues for America’s public institutions of higher education, state and local appropriations have fallen every year over the past decade, dropping from 70.7 percent in 2000 to 57.1 percent in 2011. At the same time, college enrollment numbers have swelled across the country–public institutions’ rolls grew from 8.6 million full-time students in 2000 to 11.8 million in 2011. Faced with dwindling funding from the states, public institutions of higher education have been forced to find ways to shift their costs or raise revenue on their own. In this post, we analyze the relationship between changes in state and local funding for higher education and changes in public institution tuition.

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