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By Disinvesting in Higher Education, States Contributing to Affordability Crisis

October 4, 2018 at 10:15 AM

A decade since the Great Recession, state spending on public colleges and universities remains well below historical levels, contributing to dramatic cost increases for students and families, our major new report explains. That’s left many students with little choice but to assume onerous debt or give up on higher education altogether. The problem is especially serious for students from low-income families and for black and Hispanic students, who have historically faced large barriers to attending college.

Nationally, state funding for public two- and four-year colleges in the 2018 school year (that is, the school year ending in 2018) was more than $7 billion below its 2008 level, after adjusting for inflation. States have reinvested in higher education in the past few years, but not enough to make up for the cuts they imposed after the recession hit, even as state revenues have returned to pre-recession levels.

After adjusting for inflation:

  • Of the 49 states analyzed (all except Illinois), 45 spent less per student in the 2018 school year than in 2008. The only states spending more were California, Hawaii, North Dakota, and Wyoming. (See graph.)
  • The average state spent $1,502 (16 percent) less per student in 2018 than in 2008.
  • Per-student funding in nine states fell by more than 30 percent over this period: Alabama, Arizona, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Pennsylvania, and South Carolina.

As states have cut higher education, the price of attending public colleges has risen significantly faster than family incomes.

  • Annual published tuition at four-year public colleges has risen by $2,651 (36 percent) since the 2008 school year. In 20 states, it’s risen by more than 40 percent; in seven states, it’s risen by more than 60 percent.
  • Average in-state tuition and fees at a public four-year institution represented 16.5 percent of median household income in 2017, up from 14 percent in 2008. In eight states, it exceeded 20 percent.
  • Rising college costs place a particularly heavy burden on households of color, which often face additional barriers to employment and to better-paying jobs. In 2017, average in-state tuition and fees accounted for at least 20 percent of the median household income for Hispanic families in 22 states and at least 20 percent of the median household income for black families in 33 states.

With tuition outpacing incomes and financial aid failing to make up the difference, debt burdens for students and their families continue to grow.

The benefit of a college education has never been greater. To help build a stronger middle class and develop the entrepreneurs and skilled workers needed for a strong state economy, states should renew their commitment to high-quality, affordable public higher education. Adequately funding public colleges would help us realize a vision of an America in which everyone — regardless of where they were born, where they live, the color of their skin, or the size of their bank account — has the opportunity to achieve their goals.


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Senior Policy Analyst
Program Director, State Policy Fellowship Program

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