State Funding Trends & Their Implications for Higher Education

College Search & Selection
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<p>Many on CC have long warned that the funding trends in statehouses across the USA bode ill for the nation's public universities as fewer dollars are being stretched to cover an ever-expanding universe of students. While college attendance patterns are sharply higher, state funding has not kept pace with the likely result being comparatively weaker college environments for undergraduate students. </p>

<p>I recently came across the report below and therein found many interesting and important charts and tables. Ones that particularly caught my eye and encapsulated the problems highlighted the change in state funding when measured on Full-time Enrollment (FTE) terms. Over the past five years, this number has declined by 7.7% for all states combined. For some of the major states often remarked here on CC, the results were:</p>

<p>Educational Appropriations per FTE percent change by state, Fiscal 2002-2007 (Table 5)</p>

<p>-24.9% Michigan
-21.1% New Jersey
-19.5% Illinois
-19.2% Pennsylvania
-18.3% Ohio
-14.3% Virginia
-13.4% Wisconsin
-13.1% Maryland
-12.7% California
-8.1% Massachusetts</p>

<p>-7.7% ALL USA</p>

<p>-6.7% Florida
-5.6% Georgia
-4.2% North Carolina
+2.4% Texas
+4.0% New York
+7.3% Indiana</p>

<p>Generally, these funding trends follow the basic population and economic demographic shifts that we have been seeing over the past decade plus, ie, that the Sunbelt states are the beneficiaries and thus have more money available to commit to higher education. One big outlier to this is New York which has done very well with a 4% boost in its FTE spending. </p>

<p>I think that the micro effect on an individual college varies significantly, but these trends are evidence of headwinds/tailwinds and should be noted in forecasting the future fortunes of America's public universities. At a minimum, public universities need to ramp up their fundraising to replace these dollars as relying on the politicians to solve the problem is likely a losing strategy. </p>

<p><a href="http://www.sheeo.org/finance/shef_fy07.pdf%5B/url%5D"&gt;http://www.sheeo.org/finance/shef_fy07.pdf&lt;/a&gt;&lt;/p>

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<p>I think few in higher education believe the trends will alter; I wouldn't worry about anyone at a major university relying on politicians to solve the problem. However, I do think state leaders are going to have to address some of the pressures that have been squeezing education funding. In Michigan, for example, we have to re-evaluate what drives us to spend so much on corrections. it's a staggering amount. </p>

<p>The table also helps show why tuition has increased so much at some publics.</p>

<p>The really interesting story is a state like CO, which already had very low support per FTE. Then they were cut a further 26% (more than anyone else) over the prior 5 years.</p>