Historical info about the volatility of state funding and UVa , and Virginia public colleges in general:
http://www.virginia.edu/restructuring/
http://www.virginia.edu/restructuring/background.html
My point is that it is extremely misleading and incomplete to just focus on state spending as a percentage of university budget. You have to look at what’s happening to ALL their revenue streams rather than just one.
Here’s a more fair way to look at it.
In 1976, all the states spent $10.58 per $1,000 of state income on higher ed. That was the all time peak. In 2011, it was $6.30 per $1,000. So 2011 is not as high as the peak. But still a TON of money being spent by the states.
During that time, federal dollars flowing to State U’s increased dramatically. So State U’s are still HUGELY supported by tax revenue. But there has been a big rotation from state dollars to federal dollars. State Us used to run primarily on state money. Now they run primarily on federal money – federal higher ed expenditures now exceed state expenditures. That’s why focusing on the state spending as a percentage of budget is incomplete and misleading.
You can certainly argue that it would be better if your State U was run more by the State and less by the Feds. Or more Fed and less State. But the fact is that the overall taxpayer dollars flowing to your State U are still quite large. But you’ll never hear a university adminstrator say that his declining state support has mostly been made up for by increased federal support. He only talks about how he is being starved by his deadbeat state.
State universities still get GOBS of government money. They also get more tuition dollars and donor dollars than before. State universities also spend a LOT more than they used to. They are much bigger than they used to be and have much broader missions. Their budgets have never been bigger.
eh1234 - While Va. Tech is competitive, you don’t need a 4.0 for admission. I’d hate to see a Virginia resident pass up an opportunity to attend at in-state rates, and instead attend a university that is the same quality but twice the price. I’d also look at JMU and GMU. Va. has one of the best set of choices for public universities in the US.
Maybe she just needs to experience a different part of Va. It is an extremely diverse state.
PurpleTitan - I had a college president and a top administrator at a major university each tell me that their housing was a major profit center that was used to make up for tuition discounts. If you look closely at a college budget, you may find transfers from non-academic accounts. Some major food service companies also pay large upfront fees for the long-term rights to the food contracts at universities.
(UVa also makes a fortune off its health care system, which is used to subsidize the academics.)
@Charliesch, I don’t believe you are a Virginia resident. Virginia Tech is indeed very competitive these days for instate kids. Not at the level of UVa and Wm & M, but competitive for instate kids nonetheless. Even in 2009, when one of my kids started there , the average admitted GPA was 3.92. It is indeed at the 4.0 level by now, I believe. The high acceptance rates for VT (usually around 68-70 per cent) are misleading, particularly for engineering. There is a self selection process. Virginia kids and their guidance counselors tend to have a good idea of whether or not it is worth it for a kid to apply to a particular instate school… I do agree that GMU and JMU could also be good schools to look at , but it sounded like the daughter had a specific major she was looking at, and perhaps that is why those schools are not being considered. Even GMU and particularly JMU, though, are not shoe ins for instate kids these days.
Well legalizing marijuana and taxing it for higher public education funds is starting to look like a really good idea now.
Reducing the number of undergraduates has been done in the past (though not by 50%!). It’s done with the legislature/regents approval. UF has done it at least twice that I know of, with the objective to “to improve the undergraduate experience”. At least once in the 80’s when I was attending, and another time in the 2000’s when UF reduced it’s undergraduate enrollment numbers from 34,713 (2007) to 33,015 (2009). It’s currently at 32,781.
A lot of factors impact enrollment, but sometimes reducing enrollment (even for a short time) may be the best strategy.
Basically, the funding sources for State Us have become less state revenue and more federal revenue and more student revenue (a good chunk of which comes through federally backed loans) as the enrollments and size of State Us has doubled. That change in revenue source doesn’t mean necessarily that State Us are going out of business or declining.
Recognize also that the Feds have always had a hand in how State Us have been funded. The land grants that established many State Us were federal subsidies after all.
One thing is guaranteed though. No matter how much money the Feds and the states send to State Us, the State Us will spend 100% of that dough. Maybe even more than 100%.
And don’t forget about the GI Bill in the 1940s coinciding with the first great expansion in public higher education. And the National Defense Education Act in the 1950s, when Sputnik threw such a scare into Congress that they started handing out graduate fellowships and forgivable undergraduate student loans like candy in a desperate effort to “catch up” with the Soviet juggernaut, which also coincided with the next great wave of public university expansion as the Baby Boomers began entering college in the 1960s. And Lyndon Johnson’s War on Poverty in the 1960s that promised “Opportunity Grants” to allow low-income kids to attend college, which eventually morphed into Pell grants. And of course, the federal government has heavily subsidized university research in the sciences, engineering, and medicine for decades, again much of it going back to the Cold War. I’m not persuaded that the federal role in funding public higher education is larger now than it was in the 1970s. In nominal dollars, sure, but in real inflation-adjusted dollars? As a percentage of federal discretionary spending? As a percentage of GDP? As a percentage of public university budgets? On a per capita basis? I’m not sure; I’d like to see any illuminating figures anyone has on that.
I have no doubt that relative to state support for public higher education, the federal share is now larger than it was in the 1970s, but that may be primarily because the state role has shrunk. What is clear is that as the state role has shrunk, the role of tuition revenue has expanded dramatically, as has the role of private sources including public university endowments, annual giving by alumni, other private grants, contracts, and gifts, and enterprise funds like intellectual property licensing fees.
“I’d like to see any illuminating figures anyone has on that.”
Here you go.
Increased federal aid largely enables (i) higher tuition and (ii) a lesser state funded portion and (iii) a huge expansion of university enrollments.
http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html
http://www.wsj.com/articles/college-aid-means-higher-tuition-1437345298
The “cost related to student instruction” at public universities are funded almost entirely through two revenue sources: appropriations provided by the state and tuition and fees paid by students. While large universities can receive significant revenue from external sources (donations, federal research grants…), those sources are often restricted to specific purposes and can’t be used for general operating cost. Of course, students can pay tuition/fee’s using Pell Grants, federal loans, etc.
For example, with Michigan’s public universities, from 2000-2001 to 2013-2014 state appropriations has fallen from 48% (as a % of operating revenue), to 21.5%, while student tuition has risen from 44.6% to 71.3% of operating revenue over the same time period.
Bonus fun factoid: The projected number of public high school graduates in Michigan is expected to decline from a peak of 115,183 (2007-08) to 93,710 (2020-21), a decline of about 19%.
But @Gator88NE, if you’re right, then that means we have to count federal financial aid as tuition and not as governmental appropriations, and that means we’d have to admit that government appropriations to public universities have fallen in real terms! :-S
@dfbdfb Ha! It’s all in how you look at it…perspective.
Is government spend up? Yes. Do students and parents have to deal with higher tuition cost? Yes.
By the way, I’m referencing a report put out by the Michigan legislature, ** Fiscal Focus: State Appropriations, Tuition, and Public University Operating Costs **. I’ll need to find a better link to it…but you can google the report.
Over this time period (2000-2014), state appropriations per student was reduced from $6,841 to $4,796, a 29.9% decline (2.7% a year).
Meanwhile tuition per student increased from $6,367 to $15,891, an increase of 149.6% or 7.3% a year. Overall tuition increases have outpaced state appropriations decreases and consumer inflation.
State appropriations, even at today’s reduced levels, still play an important role in keeping tuition rates down. When you see that appropriations are only 4% or some such number, that’s can be a misleading stat. It’s a much higher amount when looking at the “cost related to student instruction”.
Gator – but what was the number of students in 2000 as compared to 2014?
See the NY times article above from Prof Campos. His data is that:
“State appropriations reached a record inflation-adjusted high of $86.6 billion in 2009.”
State appropriations on a per student basis and as a % of university budget have declined because (i) the number of students has exploded, (ii) university budgets have exploded, and (iii) universities have continued to jack up tuition to previously unprecedented levels.
Assume the state sends X dollars to the State U when tuition is Y and the number of students in Z. A few years later, the state sends X dollars when tuition is 2Y and the number of students is 2Z. The state didn’t cut its amount of funding at all. But that appropriation now covers half of what it did before. The State U president claims a big cut in support when actually the decline is 100% due to the cost expansion from the school.
Govt subsidies to higher ed (state and federal) have never been higher. But paying for college (as a state or as a parent) is massively more expensive than it used to be. A university has an unlimited capacity to consume cash.
But, as Prof. Campos points out, little of that cash is going to teachers.
Got my math wrong in my example above. The state dollars are flat but it covers only 25% of the school budget as compared to before and only 50% on a per student basis as compared to before.
The denominator (students, budget, tuition) has changed way more than the numerator (state and other govt subsidies).
Ack! you made me do the math 
With the 15 public universities in Michigan, the number of undergraduates have increased from 187,000+ (2002) to 207,000+ (2013), or about a 10% to 11% increase in enrollment.
If the price differential results from true merit achievement or from proven financial need, that is understandable. However, one public university was accused a few years ago of only offering merit aid to students who had not accepted their offer of admission in the first few months. In that case, there might be two identical students. One accepted the admission offer in the first month, and the other was waiting until April to make a decision. Only the students who were waiting to decide were getting merit offers.
I get your point that state appropriations per student have declined in part because there are more students . . . but so what? It’s a bigger country now—bigger population, bigger economy. As a consequence, states spend more on almost everything: K-12 education, health care, prisons, you name it. By keeping appropriations flat at a time of rising student enrollments, the states are signaling that public higher education is among their lowest priorities. And in some states, including Michigan, the legislature has done more than keep appropriations flat, they have actually reduced appropriations to public universities rather sharply on a total dollar basis, not just on a per student basis. Either way, most states are bleeding public universities dry. (I say “most” because there are a few outliers that have actually increased appropriations, but that just suggests it’s misleading to look at total state spending for all states and conclude everything’s swell, because it’s not). The universities have no choice but to raise tuition.
Yes, federal Pell grants, federal work/study money, and federal student loans help students pay for some part of that tuition, but only part, and you can’t count all of that federal spending as a subsidy to public universities. For one thing, about 30% of college students are in private schools, including both not-for-profit and for-profit privates, and apart from a handful of elite privates with generous need-based FA policies, private colleges and universities tend to have high percentages of students borrowing and high average student debt loads, so it might well be the case that more than 30% of federal student loan money is going to students at private colleges and universities. But beyond that, you can’t count federal student loans as a direct subsidy to colleges and universities anyway; it’s not free money, the students need to pay it back (with interest), all the loan does is to give student borrowers the option of spreading the cost of college over a longer payment period. Ultimately that’s money that’s coming out of the students’ hide, not the taxpayers’, except to the extent that some borrowers default or have some or all of their debt waived under various loan forgiveness programs.
Moreover, public universities don’t get those funds on an equal per-student basis. According to the federal College Scorecard, only 37% of University of Michigan students take out federal loans, with a median total debt at graduation of $22,000. At Western Michigan University, 68% of students receive federal loans, with a median total debt at graduation of $27,000. So on a per-student basis, Western Michigan is getting roughly twice as much federal loan money as the University of Michigan, despite higher tuition at Michigan than at Western. Why the disparity? In part it’s just that the University of Michigan student body skews more affluent, but more importantly, Michigan invests very substantial amounts of its own resources to meet full need for in-state students, while Western Michigan doesn’t have the resources to allow it do so. Like most public universities, Western Michigan operates on a shoestring, so for most WMU students federal Pell grants, federal work/study, and federal student loans are pretty much the only FA that’s available. WMU does spend $13 million in institutional funds annually on need-based grant aid for an undergraduate student body of 18,000, but contrast that to the University of Michigan which spends $105 million in institutional funds annually on need-based grant aid for an undergraduate student body of 27,000. That’s a huge disparity. To be sure, federal student loans are part of the FA mix at Michigan, but a much smaller part than at a place like Western Michigan. And as a corollary, federal student loans also represent a much smaller fractional share of the University of Michigan’s total tuition revenue than at a place like Western Michigan. Also note that almost all private colleges and universities in the state of Michigan have both a higher percentage of student borrowers and a higher median student debt load at graduation than the University of Michigan, which means that to the extent you want to count federal student loans as a “subsidy,” the state’s private colleges and universities are being subsidized more heavily than the public flagship.
Even though U-M will meet full need for in-state students, only 16% of the undergraduates are awarded Pell Grants.As an in-state low SES student, U-M’s a great deal, if you can get admitted. Those low SES students that can’t get into U-M, have to enroll in schools like WMU that are not as generous in need-based aid.
Then again, UVA is even worse than U-M, when it comes to enrolling low SES students (13%).
From the college’s perspective, federal loans are free money. The school doesn’t have to pay back the loan.
When you limit the % of low SES students, you can expect to have a lower % of student borrowers and a lower median student debt load. The biggest factors that limited low SES student enrollment at U-M? A large % of OOS students (only 55% of undergraduates are in-state) and high admission standards.
Beyond that, probably about half of the instate students are from Oakland and Washtenaw counties. And possibly as much as 2/3 from Oakland, Washtenaw, and Kent counties. These are basically the wealthy parts of Michigan.