Why hasn’t state funding of higher education returned to pre-recession levels?

Budgeting – whether in a home or in statehouses across the country – is where critical value judgments are made. Where limited resources are invested, and where they aren’t, reflects our values and our ability to juggle multiple, and often competing, priorities to achieve our goals. When it comes to state funding for higher education, America continues to fall short. Unfortunately, we have arrived at a dangerous tipping point as students, and their families, have been forced to pick up a greater and greater share of the costs.

We know that higher education is one of the soundest investments that a state, or an individual, can make. For states, adequately funding their systems of higher education will not only set them on a path to economic prosperity, it will also help them meet their charge of serving the public good. Fortunately, there are a variety of revenues sources — including tuition dollars, tax dollars, loans, scholarships, and grant aid — that states can use to strike the right balance.

Despite American’s economic outlook having improved considerably, four out of five states still don’t support higher education to the extent they did before the Great Recession. The State Higher Education Executive Officers Association (SHEEO) recently released its annual State Higher Education Finance (SHEF) report which shows that states cut funding by almost $2,200 per student during the Great Recession, and today’s average student still sees almost $1,000 less in state funding than a student in 2008.

To make up for this sharp decline, tuition at most public colleges and universities has risen dramatically, and in more than half of all states, students and families are expected to shoulder the majority of the costs for higher education.

The differences are starker when examined at the state level. Fewer than one in five states have restored higher education funding to pre-recession levels, These states face two choices: allow for larger increases in tuition that students and their families must pay, or cut overall institutional resources, resulting in fewer student supports and opportunities. Neither option is desirable, and we need to look to new approaches and alternatives.

The good news is that, nationally, this most recent year has seen per student tuition revenue flatten for the first time since the Great Recession—a sign that states and institutions are beginning to respond to increased calls for affordability. Additionally, the lack of an increase in tuition revenue is partly because many states have made significant investments in their state financial aid programs which helps to reduce the tuition paid by students. Financial aid has increased 30 percent since the start of the Great Recession, and now represents almost 10 percent of all state funding for higher education across the nation. Increases to state grants to offset tuition costs for students with the greatest economic need are particularly noteworthy.

We must continue this momentum and find ways to get resources in the hands of those students who desire and deserve to go to college but are limited by financial need. These students are precisely who we must better educate to create a more equitable populace and further our state economies. Meeting the financial needs of these students is important, and so too is ensuring that the institutions where they are enrolled have the resources to adequately educate and serve them. We must do both. Fortunately, state higher education executive officers and their staffs in these states are focused on closing equity gaps and better serving traditionally underserved students.

Although we are on the road to recovery, the progress we’ve made is not enough. This fiscal landscape presents daunting challenges as we try to provide quality educational opportunities that result in meaningful work for all our students. The conversation should not stop with funding but must be expanded to holistically consider how to best serve today’s students moving forward. We can do this by strategically increasing investments in evidence-based policy solutions and prioritizing the students who most need these supports and the institutions who serve them. I believe that our state and national leaders can and will take the necessary steps to help assure a prosperous future for all.

Rob Anderson, Ph.D. is president of the State Higher Education Executive Officers Association.