States invest in public higher education in two primary ways: through direct funds to institutions (general operating support) and direct funds to students in the form of state financial aid programs (student grant aid). General operating support is the larger of the two funding categories, totaling $80.8 billion in 2019, while state financial aid allocations totaled $12.3 billion. Such investments inspire critical questions. For example: What happens to student outcomes if a state increases (or decreases) public funding for higher education? What portion of state higher education funding should be allocated to general operating support for institutions (that may mitigate tuition rate increases for all students), and what portion should be allocated to financial aid programs that target low-income students? To what extent do each of these finance strategies impact enrollment, graduation rates, credential completion, and other important outcomes?
With funding from the Joyce Foundation, SHEEO undertook a research project to gain a deeper understanding of the impacts this state investment in higher education has on student outcomes. We examined the historical data and empirical literature on state support for higher education. We found clear evidence that increased financial investments—specifically, increased state general operating and student financial aid—are directly tied to student success in higher education.
These findings suggest that states will not meet their attainment goals or the workforce demands of the modern economy without sustained investment in the public higher education sector. We recommend a number of finance policy solutions that states and the federal government can adopt to support their efforts to reach attainment goals and close equity gaps in degree attainment and college completion.
Preview Findings in the Executive Summary
Data Downloads:
- Database of research literature on the effects of general operating appropriations
- Database of research literature on the effects of financial aid
Webinar Series
As part of this project, SHEEO organized an eight-week webinar series entitled Public Investment in Higher Education: Research, Strategies, and Policy Implications. Every Thursday from February 11, 2021, through April 1, 2021, SHEEO hosted a webinar where researchers presented new original research related to public investment in higher education. Each session featured several papers and a discussant who reflected on the papers and their implications for policy and research.
Paper:
- Kristen Cummings, doctoral student/intern, University of Michigan/SHEEO
- Sophia Laderman, senior policy analyst, SHEEO
- Jason Lee, senior policy analyst, SHEEO
- David Tandberg, senior vice president of policy research and strategic initiatives, SHEEO
- Dustin Weeden, senior policy analyst, SHEEO
Discussants:
Nicholas Hillman, associate professor, University of Wisconsin-Madison
Carlos E. Santiago, commissioner, Massachusetts Department of Higher Education
Webinar Recording, February 11
Paper 1:
State Funding Volatility and the Growth of Online Programs at Public Four-Year Institutions
- Alisa Fryar, associate professor, University of Oklahoma
- Kevin McClure, assistant professor, University of North Carolina Wilmington
Paper 2:
Funding Virginia Community Colleges During a Recessionary Period: Impact of Utilizing an Outcomes-Based Funding Model
- Cathleen Cogdill, associate dean & professor, Northern Virginia Community College
Paper 3:
Equity in Appropriations: A Framework for Harm Reduction During Economic Downturns
- Mike Abrahamson, policy manager, Partnership for College Completion
- Kyle Westbrook, founding executive director, Partnership for College Completion
Discussant:
Angela Bell, vice chancellor of research and policy analysis, University System of Georgia
Webinar Recording, February 18
Paper 1:
The Effect of State and Local Appropriations on College Graduation Rates for Diverse Students
- Aaron Horn, associate vice president of research, Midwestern Higher Education Compact
- Olena Horner, research associate, assistant director of SERU survey design, SERU Research Consortium
- David Tandberg, senior vice president of policy research and strategic initiatives, SHEEO
- Robert Toutkoushian, professor, University of Georgia
- Shaun Williams-Wyche, associate director of research and data analysis, Midwestern Higher Education Compact
Paper 2:
How Public Funding Shapes Access at Access-Oriented State Comprehensive Universities Across South Carolina
- Colby King, assistant professor, University of South Carolina Upstate
- Christopher Robinson, senior data & research analyst, South Carolina Commission on Higher Education
Discussant:
Aaron Thompson, president, Kentucky Council on Postsecondary Education
Webinar Recording, February 25
Paper 1:
Equity and Allocation of Financial Aid for New Jersey
- Drew Anderson, associate economist/professor, The RAND Corporation/Pardee RAND Graduate School
- Melanie Zaber, associate economist, The RAND Corporation
Paper 2:
Race, Income, and Institutional Heterogeneity in the Effects of State Merit Aid Loss
- Kristen Cummings, doctoral student, University of Michigan
- KC Deane, doctoral candidate, University of Michigan
- Amanda Klafehn, senior director, Tennessee Higher Education Commission
Discussant:
Dominique J. Baker, assistant professor, Southern Methodist University
Webinar Recording, March 4
Paper 1:
Considering a Standard Approach to Institutional Adequacy
- Brian Prescott, vice president, NCHEMS
Paper 2:
Are State Financial Supports Lost in the Iron Triangle? A Longitudinal Analysis of Quality, Access and Affordability of Higher Education
- Jeongeun Kim, assistant professor, Arizona State University
Paper 3:
SNAP Participation Among College Students: Unclaimed Benefits and the Role of State Investment
- Peter Granville, senior policy associate, The Century Foundation
- Jen Mishory, senior fellow and senior policy advisor, The Century Foundation
Discussant:
Ben Cannon, executive director, Oregon Higher Education Coordinating Commission
Webinar Recording, March 11
Paper 1:
An Equity Analysis of Outcomes-Based Funding Policies
- Kayla Elliott, assistant director for higher education policy, The Education Trust
- Lawrence Haynes, higher education policy analyst, The Education Trust
- Tiffany Jones, deputy director of measurement, learning and evaluation, Bill & Melinda Gates Foundation
Paper 2:
Incentivizing Equity? The Effects of Performance-Based Funding Equity Provisions on Reducing Disparities in College Persistence and Completion
- Monnica Chan, doctoral candidate, Harvard Graduate School of Education
- Zachary Mabel, associate policy research scientist, College Board
- Preeya Pandya Mbekeani, associate program officer, Spencer Foundation
Paper 3:
From Desegregation to Today: Conceptualizing an Equitable Framework for Public Funding for HBCUs
- Sosanya Jones, assistant professor, Howard University
- Brittany Mosby, director of HBCU Success, Tennessee Higher Education Commission
Discussant:
Denisa Gandara, assistant professor, Southern Methodist University
Webinar Recording, March 18
Paper 1:
Examining Free College in Tennessee: A Student-Level Analysis
- Kate Callahan, chief research officer, Research for Action
- Daniel Kent, research analyst, Research for Action
- Lindsey Liu, senior research analyst, Research for Action
Paper 2:
The Irish Experience with No Tuition Fees – A Case Study
- Jason Delisle, resident fellow, American Enterprise Institute
- Art Hauptman, public policy consultant
Paper 3:
Free College and Academic Standards: Implications of 30-Credit-Completion-Requirement for Lower Income Students
- Takeshi Yanagiura, University of Tskuba, Division of Research in Higher Education
Discussant:
Steven Gentile, chief policy officer, Tennessee Higher Education Commission
Webinar Recording, March 25
Paper 1:
Shaping Preferences for State Support for Higher Education: The Roles of the Median Voter, Income Inequality, and Social Mobility
- Jennifer Delaney, associate professor, University of Illinois at Urbana-Champaign
Paper 2:
What is the Effect of Political Party on State Education Finance?
- Mark Chin, doctoral candidate, Harvard University
- Lena Shi, doctoral student, Harvard University
Paper 3:
Where the Balance-Wheel Hypothesis Falls Short: Examining State Policymakers’ Decisions to Fund Higher Education Amidst an Impending Recession
- Meredith Billings, assistant professor, Sam Houston State University
- Denisa Gandara, assistant professor, Southern Methodist University
- Lindsey Hammond, postdoctoral career & technical education research fellow, NC State University
- Paul Rubin, assistant professor, The University of Utah
Discussant:
Will Doyle, professor, Vanderbilt University
Webinar Recording, April 1