Funding Down, Tuition Up
State Cuts to Higher Education Threaten Quality and Affordability at Public Colleges
End Notes
[1] Chelsea Arbury assisted with gathering data for this report.
[2] This paper uses CPI-U-RS inflation adjustments to measure real changes in costs. Over the past year CPI-U-RS increased by 0.12 percent. We use the CPI-U-RS for the calendar year that begins the fiscal/academic year. Unless noted, all figures in this paper are adjusted for inflation.
[3] CBPP calculation using the “Grapevine” higher education appropriations data from Illinois State University, enrollment data from the State Higher Education Executive Officers Association, and the Consumer Price Index, published by the Bureau of Labor Statistics. Since enrollment data is available only through the 2014-15 school year, enrollment for the 2015-16 school year is estimated using data from past years. Kentucky funding data is provided by the Kentucky Center for Economic Policy. Pennsylvania funding data is provided by the Pennsylvania Budget and Policy Center. In the 2013-15 biennial budget, Wisconsin state lawmakers changed the funding model for Wisconsin’s Technical College System, shifting support from the local property tax to state General Purpose Revenue. This change reflects a shift of roughly $406 million in annual support from the local to state levels in Wisconsin but did not result in an overall increase in support for Wisconsin’s higher education institutions. Excluding this shift, per-student funding fell by $1,634, or 25.2 percent, over 2008-2016.
[4] State Higher Education Executive Officers Association, “State Higher Education Finance: FY2015,” April 2016, p. 18, http://www.sheeo.org/sites/default/files/SHEEO_SHEF_FY2015.pdf.
[5] Calculated from College Board, “Trends in College Pricing 2015: Average Tuition and Fee and Room and Board Charges, 1971-72 to 2015-16 (Enrollment-Weighted),” Table 2, http://trends.collegeboard.org/college-pricing.
[6] Calculated from “Trends in College Pricing 2015,” Table 2, and the Census Bureau’s “Income, Poverty and Health Insurance Coverage in the United States: 2013,” September 2014, Table A-2, http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf.
[7] Anthony P. Carnevale, Nicole Smith, and Jeff Strohl, “Recovery: Job Growth and Education Requirements through 2020,” Georgetown University Center on Education and the Workforce, June 2013, https://georgetown.app.box.com/s/tll0zkxt0puz45hu21g6.
[8] CBPP calculation using Census Bureau and Bureau of Labor Statistics data, http://www.census.gov/govs/qtax/.
[9] State Higher Education Executive Officers Association, April 2016.
[10] CBPP calculation using the “Grapevine” higher education appropriations data from Illinois State University, enrollment and combined state and local funding data from the State Higher Education Executive Officers Association, and the Consumer Price Index, published by the Bureau of Labor Statistics. Since enrollment data is only available through the 2014-15 school year, we have estimated enrollment for the 2015-16 school year using data from past years. The Illinois system of higher education operated without state appropriations for much of the 2015-16 school year. In April, Illinois lawmakers provided just under $600 million for state colleges and universities for fiscal year 2016. In June, the legislature approved an additional $1 billion in higher education funding that could be used for expenses in fiscal year 2016 and the first half of fiscal year 2017. In order to calculate the amount dispersed for 2016 we have spread the additional $1 billion in funding across the 18-month time period with two-thirds of the funding applied to 2016 and the remaining third to fiscal year 2017, such that the final fiscal year 2016 appropriation totals $1.255 billion.
[11] Between fiscal years 2015 and 2016 Iowa experienced a $1 increase in per-student funding after adjusting for inflation.
[12] This is skewed heavily by the drastic reduction in state support in Illinois, where funding fell by more than 37 percent between 2015 and 2016 or roughly $1,750 per student. The median decline in state funding in these 12 states was 2.4 percent and $173 per student.
[13] CBPP analysis of Census quarterly state and local tax revenue, http://www.census.gov/govs/qtax/.
[14] State Higher Education Executive Officers Association, April 2016. Note: while full-time-equivalent enrollment at public two- and four-year institutions is up since fiscal year 2008, between fiscal years 2014 and 2015 it remained relatively flat after a slight decline in 2013.
[15] See, for example, “National Postsecondary Enrollment Trends: Before, During and After the Great Recession,” National Student Clearinghouse Research Center, July 2011, p. 6, http://pas.indiana.edu/pdf/National%20Postsecondary%20Enrollment%20Trends.pdf. A survey conducted by the American Association of Community Colleges indicated that increases in Fall 2009 enrollment at community colleges were, in part, due to workforce training opportunities; see Christopher M. Mullin, “Community College Enrollment Surge: An Analysis of Estimated Fall 2009 Headcount Enrollments at Community Colleges,” AACC, December 2009, http://files.eric.ed.gov/fulltext/ED511056.pdf.
[16] National Center for Education Statistics, Enrollment in public elementary and secondary schools, by level and grade: Selected years, fall 1980 through fall 2024, Table 203.10, http://nces.ed.gov/programs/digest/d14/tables/dt14_203.10.asp.
[17] CBPP analysis of data from U.S. Department of Justice, Bureau of Justice Statistics.
[18] Costs reported above include both published tuition and fees. Average tuition and fee prices are weighted by full-time enrollment.
[19] As noted earlier, this and other figures in this report have been adjusted for inflation.
[20] CBPP analysis using College Board “Trends in College Pricing 2015,” http://trends.collegeboard.org/sites/default/files/trends-college-pricing-web-final-508-2.pdf. See appendix for fiscal year 2015-16 change in average tuition at public four-year colleges.
[21] CBPP analysis using College Board “Trends in College Pricing 2015,” http://trends.collegeboard.org/sites/default/files/trends-college-pricing-web-final-508-2.pdf. Note: in non-inflation-adjusted terms, average tuition is up $3,219 over this time period.
[22] Ibid.
[23] CBPP calculations data from State Higher Education Executive Officers.
[24] For a more detailed account of university cuts see: Michael Mitchell, Vincent Palacios, and Michael Leachman, “States Are Still Funding Higher Education Below Pre-Recession Levels,” Center on Budget and Policy Priorities, May 1, 2014, https://www.cbpp.org/cms/?fa=view&id=4135.
[25] Jeff Richardson, “University of Alaska Fairbanks announces program cuts,” Fairbanks Daily News-Miner, April 22, 2015, http://www.newsminer.com/news/local_news/university-of-alaska-fairbanks-announces-program-cuts/article_a2da5062-e946-11e4-8de1-bf06696e789a.html.
[26] Sebastian Laguna, “320 jobs cut at UA due to updated budget,” The Daily Wildcat, October 1, 2015, http://www.wildcat.arizona.edu/article/2015/10/320-jobs-cut-at-ua-due-to-updated-budget.
[27] Mark Urycki, “University of Akron and Others Look to Cut Costs,” WCPN, July 10, 2015, http://www.ideastream.org/stateimpact/2015/07/10/university-of-akron-and-others-look-to-cut-costs.
[28] Meg Jones, “University of Wisconsin Regents enact budget reflecting state cuts,” Milwaukee Journal Sentinel, July 9, 2015, http://www.jsonline.com/news/education/university-of-wisconsin-regents-enact-budget-reflecting-state-cuts-b99534871z1-312964111.html.
[29] CBPP analysis of employment data from the National Center for Education Statistics and enrollment data from the State Higher Education Executive Officers Association.
[30] State Higher Education Executive Officers Association, “State Higher Education Finance: FY2013,” 2014, p. 22, Figure 4, http://www.sheeo.org/sites/default/files/publications/SHEF_FY13_04252014.pdf.
[31] State Higher Education Executive Officers Association, April 2016; government funding includes dollars from both state and local funding sources.
[32] See, for example, Steven W. Hemelt and Dave E. Marcotte, “The Impact of Tuition Increases on Enrollment at Public Colleges and Universities,” Educational Evaluation and Policy Analysis, September 2011; Donald E. Heller, “Student Price Response in Higher Education: An Update to Leslie and Brinkman,” The Journal of Higher Education, Vol. 68, No. 6 (November-December 1997), pp. 624-659.
[33] Drew Allen and Gregory C. Wolniak, “Exploring the Effects of Tuition Increases on Racial/Ethnic Diversity at Public Colleges and Universities,” New York University, 2015, p. 30, http://www.aera.net/Portals/38/Newsroom%20-%20Recent%20Research/Exploring%20the%20Effects%20of%20Tuition%20Increases%20on%20Racial-Ethnic%20Diversity%20at.pdf.
[34] Stella Flores and Justin Shepard, “Pricing Out the Disadvantaged? The Effect of Tuition Deregulation in Texas Public Four-Year Institutions,” The ANNALS of the American Academy of Political and Social Science, 2014, Vol.655, pp. 99-122.
[35] National Center for Education Statistics, “Total fall enrollment in degree-granting postsecondary institutions, by level and control of institution and race/ethnicity of student: Selected years, 1976 through 2013,” Table 306.20, http://nces.ed.gov/programs/digest/d14/tables/dt14_306.20.asp.
[36] Thomas J. Kane, “Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?” National Bureau of Economic Research, 1995, http://www.nber.org/papers/w5164.pdf?new_window=1.
[37] Eric P. Bettinger et al., “The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment,” National Bureau of Economic Research, 2009, http://www.nber.org/papers/w15361.pdf. For details on the disparity in access to counseling for low-income students see “Course, Counselor, and Teacher Gaps: Addressing the College Readiness Challenge in High-Poverty High Schools,” Center for Law and Social Policy, June 2015, http://www.clasp.org/resources-and-publications/publication-1/CollegeReadinessPaperFINALJune.pdf.
[38] College Board, “Education Pays: 2013,” http://trends.collegeboard.org/sites/default/files/education-pays-2013-full-report-022714.pdf.
[39] In a 2008 piece, Georgetown University scholar Anthony Carnevale pointed out that “among the most highly qualified students (the top testing 25 percent), the kids from the top socioeconomic group go to four-year colleges at almost twice the rate of equally qualified kids from the bottom socioeconomic quartile.” Anthony P. Carnevale, “A Real Analysis of Real Education,” Liberal Education, Fall 2008, p. 57.
[40] Christopher Avery and Caroline M. Hoxby, “The Missing ‘One Offs’: The Hidden Supply of High-Achieving, Low-Income Students,” National Bureau for Economic Research, Working Paper 18586, 2012, http://www.brookings.edu/~/media/projects/bpea/spring-2013/2013a_hoxby.pdf.
[41]Patrick T. Terenzini, Alberto F. Cabrera, and Elena M. Bernal, “Swimming Against the Tide,” College Board, 2001, http://www.collegeboard.com/research/pdf/rdreport200_3918.pdf.
[42] Eleanor W. Dillon and Jeffrey A. Smith, “The Determinants of Mismatch Between Students and Colleges,” National Bureau of Economic Research, August 2013, http://www.nber.org/papers/w19286. Additionally, other studies have found that undermatching is more likely to occur for students of color. In 2009 Bowen, Chingos, and McPherson found that undermatching was more prevalent for black students — especially black women — relative to comparable white students.
[43] Stacey Dale and Alan Krueger, “Estimating the Return to College Selectivity Over the Career Using Administrative Earning Data.” Mathematica Policy Research and Princeton University, February 2011, http://www.mathematica-mpr.com/publications/PDFs/education/returntocollege.pdf.
[44] College Board, “Trends in Student Aid 2015,” October 2015, Figure 25, http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf.
[45] CBPP calculation using “Trends in College Pricing 2015,” October 2015, Table 7, http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf.
[46] College Board, “Trends in Student Aid 2015,” October 2015, Figure 28A, http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf.
[47] College Board, “Net Tuition and Fees, Net Room and Board and Other Costs, and Total Grant Aid in 2011 Dollars by Family Income, Full-Time Dependent Students at Public Institutions, 1999-2000, 2003-04, 2007-08, and 2011-12,” October 2014, http://trends.collegeboard.org/sites/default/files/trends-college-pricing-web-final-508-2.pdf.
[48] College Board, “Trends in Student Aid, 2015: Median Debt Levels of 2007-08 Bachelor’s Degree Recipients by Income Level,” October 2015, 2014_14b, http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf Low-income dependent students are defined as students from families earning less than $30,000 annually, while high-income students come from families earning more than $106,000.
[49] Mark Huelsman, “The Debt Divide: The Racial and Class Bias Behind the ‘New Normal” of Student Borrowing,” May 2015, http://www.demos.org/sites/default/files/publications/Mark-Debt%20divide%20Final%20(SF).pdf. Hispanic or Latino students generally borrow at levels equal to the national average. African American students are also more likely to take on student debt to finance education at two-year colleges.
[50] College Board “Trends in Student Aid,” Figure 15, http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf.
[51] Federal Reserve Bank of New York “Quarterly Report on Household Debt and Credit,” February 2016, https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2015Q4.pdf.
[52]Adam Looney and Constantine Yannelis, “A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults,” Brookings Institution, BPEA Conference Draft, September 10, 2015, http://www.brookings.edu/~/media/projects/bpea/fall-2015_embargoed/conferencedraft_looneyyannelis_studentloandefaults.pdf.
[53] Michael Greenstone and Adam Looney, “Regardless of the Cost, College Still Matters,” The Hamilton Project, October 5, 2012, http://www.brookings.edu/blogs/jobs/posts/2012/10/05-jobs-greenstone-looney.
[54] See for example Hill et al., “The Value of Higher Education: Individual and Societal Benefits,” October 2005, http://www.asu.edu/president/p3/Reports/EdValue.pdf and College Board, “Education Pays 2013,” October 2013, http://trends.collegeboard.org/sites/default/files/education-pays-2013-full-report-022714.pdf for summaries of social benefits of higher levels of educational attainment.
[55] Enrico Moretti, “Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-Sectional Data,” Journal of Econometrics, Vol. 121, 2004, pp. 175-212.
[56] See Anthony P. Carnevale, Nicole Smith, and Jeff Strohl, “Recovery: Job Growth and Education Requirements through 2020,” Georgetown University Center on Education and the Workforce, June 2013, https://georgetown.app.box.com/s/tll0zkxt0puz45hu21g6.
[57] Ibid.
[58] Beth Akers, “Higher education debt is worth it, but isn’t risk free,” Brookings Institution, January 12, 2016, http://www.brookings.edu/research/opinions/2016/01/12-higher-education-debt-akers.
[59] For impacts of debt on homeownership, see Jennifer M. Shand, “The Impact of Early-Life Debt on the Homeownership Rates of Young Households: An Empirical Investigation,” November 2007, http://www.fdic.gov/bank/analytical/cfr/2008/jan/CFR_SS_2008Shand.pdf. For the relationship between debt and graduation, see for example, Rachel E. Dwyer, Laura McCloud, and Randy Hodson, “Debt and Graduation from American Universities,” Social Forces, June 15, 2012, http://sf.oxfordjournals.org/content/90/4/1133. For information on graduate enrollment, see for example Lindsey E. Malcolm and Alicia C. Dowd, “The Impact of Undergraduate Debt on the Graduate School Enrollment of STEM Baccalaureates,” The Review of Higher Education, Volume 35, Number 2, Winter 2012, pp. 265-305.
[60] Brent W. Ambrose, Larry Cordell, and Shuwei Ma, “The Impact of Student Loan Debt on Small Business Formation,” March 29, 2014, http://dx.doi.org/10.2139/ssrn.2417676.
[61] Michael Leachman et al., “Most States Have Cut School Funding, and Some Continue Cutting,” Center on Budget and Policy Priorities, January 25, 2016, https://www.cbpp.org/research/state-budget-and-tax/most-states-have-cut-school-funding-and-some-continue-cutting.
[62] Elizabeth McNichol, “It’s Time for States to Invest in Infrastructure,” Center on Budget and Policy Priorities, February 23, 2016, https://www.cbpp.org/research/state-budget-and-tax/its-time-for-states-to-invest-in-infrastructure.
[63] CBPP calculations, data from the National Association of State Budget Officers.
[64] Nicholas Johnson and Michael Leachman, “Four Big Threats to State Finances Could Undermine Future U.S. Prosperity,” Center on Budget and Policy Priorities, February 14, 2013, https://www.cbpp.org/research/four-big-threats-to-state-finances-could-undermine-future-us-prosperity.
[65] See for example: Erica Williams, “Short-Sighted Tax Cuts Hurting Energy States,” Center on Budget and Policy Priorities, February 29, 2016, https://www.cbpp.org/blog/short-sighted-tax-cuts-hurting-energy-states.
[66] For details see: “Widespread Effect of Making Deep Cuts to the University of Wisconsin System,” Wisconsin Budget Project,” May 20, 2015, http://www.wisconsinbudgetproject.org/the-widespread-effects-of-making-deep-cuts-to-the-university-of-wisconsin-system.
[67] Tamarine Cornelius, “A Summary of Tax and Revenue Changes in the Wisconsin Budget,” Wisconsin Budget Project, July 14, 2015, http://www.wisconsinbudgetproject.org/a-summary-of-tax-and-revenue-changes-in-the-wisconsin-budget; see also “Costs Adds Up for Tax Cuts Included in the Budget,” July 16, 2015, http://www.wisconsinbudgetproject.org/cost-adds-up-for-tax-cuts-included-in-the-budget.
[68] “Tax Law Changes Since January 2011,” Legislative Fiscal Bureau memo, April 30, 2014, https://docs.legis.wisconsin.gov/misc/lfb/misc/135_tax_law_changes_since_january_2011_4_30_14.pdf.