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Report Examines State Funding Cuts

August 23, 2017

A new report from the Center on Budget and Policy Priorities compares state spending on two- and four-year public colleges and universities over a decade, finding funding at the end of the 2017 academic year was nearly $9 billion below its 2008 level, after adjusting for inflation.

On a per student basis, 44 of 49 states analyzed spent less in 2017 than in 2008, found the report, released today. The average state spent $1,448, or 16 percent, less per student.

Falling state spending has consequences, according to the center, a research and policy think tank focused on budget and tax policies that help low-income people. Today’s report draws heavily on data from two other well-known annual reports on higher education finance, the Grapevine survey and the State Higher Education Finance report from the State Higher Education Executive Officers association.

“State spending on higher education is important because state and local governments provide just over half of the money that public colleges use for educational purposes,” said Michael Mitchell, senior policy analyst at the Center on Budget and Policy Priorities and one of the report’s authors. “If that amount goes down, public institutions generally have to raise more funds through tuition, they have to cut their own campus budgets, or some combination of those two things.”

Since 2008, average annual published tuition at four-year public institutions has increased by $2,484, or 35 percent.

The report argues that families have had a difficult time shouldering higher tuition costs. Tuition costs can deter some students from enrolling in higher education, including students of color and low-income students, it said.

Federal aid may have helped some families keep up with rising tuition costs. Between 2008 and 2016, total Pell Grant aid increased by 68 percent. The average grant rose by 23 percent, to $3,034, as the grant’s value has in recent years been indexed to inflation. But low-income students are still saddled with heavy debt, according to the report. It also worries about the effects of proposals by Republicans to cut from the Pell program.

“Unfortunately, there are reasons to be concerned that federal student aid, including Pell Grants, will do less, rather than more, to help low- and moderate-income students afford college going forward,” said Sharon Parrott, senior fellow and senior counselor at the center.

The report concludes by saying that past higher education funding cuts would have been less necessary if policy makers had put in place a more balanced mix of spending cuts and revenue increases during the Great Recession. It calls for states to avoid tax cuts and consider options for raising new revenue in order to boost public higher education and its long-term benefits to the economy.


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