New Report Confirms States Continue to Under-Fund Colleges and Universities

New research from the Center on Budget and Policy Priorities (CBPP) ought to worry us: States Are Still Funding Higher Education Below Pre-Recession Levels.  While many states have begun to restore some of the cuts they made to spending for colleges and universities during the recession that began in 2008, 48 states are still spending less on higher education in real dollars than in 2007.  Across the states, spending for state colleges and universities averages $2,026 or 23 percent less per student than in 2008.  Sadly during 2013-2014,  8 states further reduced higher education funding per-pupil: Pennsylvania, Arkansas, Kansas, Wisconsin, North Carolina, Louisiana, West Virginia, and Wyoming.

And to make matters worse, Arizona, Florida, Kansas, Michigan, Missouri, New York, North Carolina, Ohio, Oklahoma, and Wisconsin—which had already made deep cuts to higher education funding—have already made or are seriously  considering further tax cuts this year. “Florida lawmakers, for example, have cut taxes by nearly $400 million in the current 2014 legislative session with another $100 million in cuts still under consideration.  These cuts come at a time when Florida’s higher education funding stands 30 percent below pre-recession levels, and tuition at its public four year colleges has increased by 66 percent over the last five years.”

In its 2014 report, CBPP explains that while states could have reduced the size of spending cuts by raising taxes, most states chose not to.  “Rather than choosing a balanced mix of spending cuts and targeted revenue increases, states relied disproportionately on damaging cuts to close the very large budget shortfalls they faced over the course of the recession.  Between fiscal years 2008 and 2012, states closed 45 percent of their budget gaps (for higher education) through spending cuts and only 16 percent of their budget gaps through taxes and fees (they closed the remainder of their shortfalls with federal aid, reserves, and various other measures).”  Spending cuts have included extensive layoffs of teaching faculty, decisions not to replace retiring professors, and increased reliance on adjunct staff.

Not surprisingly tuition paid by students has increased in the years since 2008—in many cases significantly. Last year CBPP reported that between 2008 and 2013, annual tuition (in inflation adjusted dollars) at  four-year public colleges and universities had increased by $4,275 in Arizona, $4,190 in Washington, $3,923 in California, $3,909 in New Hampshire, $3,147 in Hawaii, $2,973 in Alabama, $2,907 in Rhode Island, $2,905 in Georgia, and the list continues across the states.  CBPP’s 2014 report notes that this year tuition rose more slowly, rising in 38 states by an average $120 or 1.4 percent.

Last year CBPP traced the trend of diminishing state investment in public higher education and accompanying increases in tuition long before the 2008 recession:  “Over the 20-year period between 1991 and 2011… median household income grew by about 3 percent, after adjusting for inflation.  Between the 1990-1991 and the 2012-2013 school years… tuition at four-year public colleges grew by 159 percent in real terms.”  While some growth in financial assistance has helped to offset the impact of the tuition increases, “even after taking those grants and tax benefits into account, the cost of college grew by 58 percent in real terms….”

The NY Times recently reported that Fewer U.S. Graduates Opt for College After High School.  Back in 2009, 70.1 percent of new high school graduates headed for college, but last fall only 65.9 percent of new high school graduates entered college.  As the NY Times acknowledges, many factors contribute to such trends.  In its new report, however, CBPP documents that by 2014 “Collectively, across all institutional sectors, students held $1.08 trillion in student debt—eclipsing both car loans and credit card debt—by the fourth quarter of 2013.”  CBPP concludes:  “Tuition costs are deterring some students from enrolling in college.”