The impacts of COVID-19 on public higher education revenues and enrollment are unknown and potentially severe. Amidst this uncertainty, the State Higher Education Finance (SHEF) report offers a comprehensive look at where states stand as they enter this complex funding environment.
BOULDER, Colorado —
In fiscal year 2019, state
and local support for higher education topped $100 billion for the first time
in history. At the same time, public higher education finance has never been more
precarious. Institutions face increased costs, loss of tuition revenue, and
unknown enrollment for the coming academic year. Meanwhile, reductions in state
budgets firmly indicate sweeping cuts are coming for higher education.
increase in per-student education appropriations marks the likely end of a
seven-year recovery in higher education funding
On a per-student basis, education
appropriations (a measure of state and local funding for general operations and
financial aid at public institutions) increased $195 above inflation in the
last year. While states’ efforts to increase funding for higher education
should not be discounted, many public institutions are still without the
necessary funding to appropriately weather the coming economic decline.
Despite seven years of
moderate increases in per-student funding for higher education, only seven
states have fully recovered from funding declines during the last recession. Nationally,
education appropriations remained 8.7% below pre-recession levels in 2008, and
states have only recovered about two-thirds (63.5%) of the total decline seen
during the Great Recession.
This year, with generous funding from the Bill & Melinda Gates Foundation, the State Higher Education Executive Officers Association (SHEEO) is launching a brand new, fully interactive, SHEF website. The new SHEF website currently features an animated overview of higher education finance, customizable visualizations, and data downloads throughout the interactive report and issue briefs, with even more interactive tools to be released in the coming months.
“States have many budget
priorities, and often higher education is the first place to be cut,” said
Robert E. Anderson, president of SHEEO. “Public higher education is entering a
period of economic uncertainty in an unstable position. Without adequate state
funding, and with huge uncertainty surrounding fall enrollment and tuition
revenues, public institutions will lack the resources they need to properly serve
their students in the coming year.”
“We do not know what will
happen in the coming months, but it is vital that we continue to support higher
education,” said Carlos E. Santiago, commissioner of higher education for Massachusetts
and chair of SHEEO’s executive committee. “SHEF provides important context
about the financial landscape of public higher education heading into the
current crisis and is a valuable resource to assist state policy leaders in making
what we know will be very difficult funding decisions.”
Additional findings from
the 2019 SHEF report include:
remained largely stable for the third year in a row: 2019 is
the eighth straight year of full-time equivalent (FTE) enrollment declines
following substantial enrollment increases during the Great Recession. However,
these annual enrollment declines have been less than 0.5% for the last three
years. There were just under 11 million FTE enrolled students in 2019.
aid accounts for an ever-growing portion of state and local funding: State
public financial aid (a part of education appropriations) increased 4.0%,
reaching an all-time high of $808 per FTE. State aid has increased 34.1% since
the start of the Great Recession.
- Thanks to
increases in financial aid, net tuition revenue declined for the first time in
over a decade: Following rapid increases in net tuition revenue in every state
during the Great Recession, net tuition revenue declined by $6 per FTE in 2019.
education revenues reached $15,000 per student for the first time: Total
revenues for public institutions increased 1.3%, reaching an all-time high of $15,018.
This trend does not hold for all institutions or states. Many institutions have
been unable to increase tuition revenue to offset historical declines in state
funding, and 16 states have not surpassed pre-recession total education
time, the student share has increased in all states: The share
of total revenues that come from student tuition dollars has increased from
20.9% in 1980 to 46% today. Student share generally rises during economic
recessions and levels off during recoveries. In the coming recession, student
share will likely surpass 50%.
If the last two recessions
are any indication, funding for public higher education will decline more than
any other budget area over the next few years. Over time, recessions have led
to deeper declines and shallower recoveries in state funding. In 2019, public
institutions received, on average, $1,800 less in per-student funding than
prior to the tech bust in 2001.
“There are great
differences across states and between types of institutions, and many public
institutions have already increased efficiencies and raised tuition revenues as
much as possible,” said Sophia Laderman, senior policy analyst at SHEEO and
primary author of the report. “Those colleges are often the same ones that rely
the most on state funding and serve students with the greatest financial need. While
funding cuts may be necessary, it is essential that state leaders are cognizant
of each institution’s dependence on state funding and access to alternative
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. The full SHEF report paints a more complete picture of differences in public higher education finance across states.
Explore the SHEF website to read
the full report and customize the adjustable data visualizations. The SHEF
website also includes issue briefs that focus on state recovery from the Great
Recession, regional differences in higher education finance, and changing
trends in the allocation of state financial aid.
State Higher Education Executive Officers Association (SHEEO)
State Higher Education Executive Officers Association serves the chief
executives of statewide governing, policy, and coordinating boards of
postsecondary education and their staffs. Founded in 1954, SHEEO promotes an
environment that values higher education and its role in ensuring the equitable
education of all Americans, regardless of race/ethnicity, gender, or
socioeconomic factors. Together with its members, SHEEO aims to achieve this
vision by equipping state higher education executive officers and their staffs
with the tools to effectively advance the value of higher education, promoting
public policies and academic practices that enable all Americans to achieve
success in the 21st century, and serving as an advocate for state higher