The State Higher Education Finance (SHEF) report examines
the trends, context, and consequences of state higher education funding
decisions in FY 2018.
CONTACT:
Annahita Jimmerson
ajimmerson@sheeo.org
(303)541-1602
BOULDER, Colorado — Despite the American economic outlook having improved considerably, state funding for higher education has only halfway recovered in the ten years since the Great Recession, a new report released today by the State Higher Education Executive Officers Association (SHEEO) finds. The 2018 State Higher Education Finance (SHEF) report — an annual, nonpartisan analysis of educational appropriations, tuition revenue, and enrollment trends in all 50 states — also explores how students and families came to shoulder more responsibility for supporting public higher education as states attempted to rebound from the 2008 financial crisis.
This year’s
SHEF report marks the culmination of a ten-year data set since the Great
Recession and offers a comprehensive look at how states navigated complex funding
environments and undertook efforts, where possible, to restore public
investments in higher education as they recovered from a significant economic
downturn.
“State leaders
had to make tough decisions about how to finance their public systems of higher
education as their economies weathered the Great Recession,” said Robert E.
Anderson, president of SHEEO. “Many states used higher education as a balance
wheel so they could preserve funding in other areas. But tighter purse strings
also compelled state leaders to adopt new, innovative ways of thinking about
higher education funding. This year’s SHEF report calls for us to consider the
decisions states made on the path to recovery with an understanding that there
is still significant work to be done to develop equitable higher education
finance policies that produce the talent states need to compete in the 21st
century economy.”
In addition to
providing a decade-long snapshot of states’ levels of investment in public
higher education in the wake of the Great Recession, this year’s SHEF report
also details year-over-year changes in measures such as state and local support
for higher education, educational appropriations, net tuition revenue, total
educational revenue and full-time equivalent enrollment (FTE). Report
highlights include:
- Higher education funding is stabilizing:
Nationally, state and
local per-student support for higher education increased at roughly the rate of
inflation from 2017 to 2018. This minimal growth follows a five-year period of
annual funding increases greater than 2 percent, indicating that state
appropriation recovery from the Great Recession has stabilized, albeit at a
much lower level.
- A new norm for the student share of
higher education funding has arrived:
For the first time since the Great Recession, net tuition revenue remained flat
in 2018, indicating that the growing reliance on net tuition as a revenue
source — the student share — might be leveling. While tuition revenue measures
more than just rate increases, flat tuition revenue may be a sign of the
impacts of increasing pressure and attention on college affordability. However,
the student share has increased significantly since before the Great Recession.
“This
substantial shift of responsibility represents a significant change for
American higher education,” said Anderson. “As the nation’s economy continues
to stabilize, it’s clear that a heavy reliance on tuition revenue has become
the new norm for how state higher education systems are funded.”
- There’s good news when it comes to
financial aid: Unlike
the rest of state higher education funding, states have increased their public
financial aid consistently over time. In 2018, state financial aid saw the
largest increase since the Great Recession. Financial aid now represents nearly
10 percent of all appropriations, and encouragingly, evidence shows that states
largely protect this source of support during economic downturns.
- The decline in full-time enrollment
shows signs of slowing down:
Due largely to a recovering economy, fewer students continued to enroll in
higher education than did so during the peak Recession years. However, there
was little year-over-year change in this measure from 2017 to 2018, which —
like trends in state and local appropriations and net tuition revenue —
suggests stabilization in national enrollment levels.
“While these
findings are crucial to understanding the broad strokes of national finance
trends in higher education, it’s important to note that national trends mask
considerable variation across the states,” said Sophia Laderman, senior policy
analyst at SHEEO and an author of the 2018 SHEF report. “Although state funding
for higher education has only halfway recovered nationally on a per-student
level, some states have fully restored appropriations to prior levels, while
others have increased tuition to fully offset the reduction in state funding,
and a number have not recovered at all.”
“Each year, the
SHEF report is a valuable resource to the entire higher education community,”
said Glen D. Johnson, chancellor of the Oklahoma State System of Higher
Education and chair of SHEEO’s Executive Committee. “This year’s report is no
exception, as it provides important context about the financial landscape of
our states and postsecondary institutions over the last 20 years. It is our
hope that the SHEF report can assist state policy leaders as they make what we
know to be difficult funding decisions.”
The 2018 SHEF report also features a series of case studies that explore higher education finance topics including state cost and budget drivers that influence the funding of higher education, and an ongoing look at state funding challenges in Illinois. Those interested in data for an individual state are encouraged to access the electronic version of the report, which includes numerous supplementary state-by-state data tables and interactive data visualizations, at SHEEO.org/shef.
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About the State Higher Education
Executive Officers Association (SHEEO)
The State
Higher Education Executive Officers is the national association of the chief
executives of statewide governing, policy, and coordinating boards of
postsecondary education. Founded in 1954, SHEEO serves its members as an
advocate for state policy leadership, a liaison between states and the federal
government, a vehicle for learning from and collaborating with peers, a manager
of multistate teams to initiate new programs, and as a source of information
and analysis on educational and public policy issues. SHEEO seeks to advance
public policies and educational practices to achieve more widespread access to
and completion of higher education, more discoveries through research, and more
applications of knowledge that improve the quality of human lives and enhance
the public good.
