Public Investment in Higher Education: Research, Strategies, and Policy Implications

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.

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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.

February 11: Establishing the Value of State Appropriations and Financial Aid

Paper:

Investigating the Impacts of State Higher Education Appropriations and Financial Aid
  • 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
February 18: Funding Decisions in Troubled Economic Times

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

Presentation 

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

Paper

Discussant:

Angela Bell, vice chancellor of research and policy analysis, University System of Georgia

Webinar Recording, February 18
February 25: Funding Strategies and Student Outcomes

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

Presentation

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

Paper

Discussant:

Aaron Thompson, president, Kentucky Council on Postsecondary Education

Webinar Recording, February 25
March 4: Impacts of State Financial Aid

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

Report

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

Presentation

Discussant:

Dominique J. Baker, assistant professor, Southern Methodist University

Webinar Recording, March 4
March 11: Strategic Finance for Higher Education

Paper 1:

Considering a Standard Approach to Institutional Adequacy

  • Brian Prescott, vice president, NCHEMS

Paper

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

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

Paper

Discussant:

Ben Cannon, executive director, Oregon Higher Education Coordinating Commission

Webinar Recording, March 11
March 18: Can Performance-Based Funding Be Equitable?

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

Handbook

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

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

Presentation

Discussant:

Denisa Gandara, assistant professor, Southern Methodist University

Webinar Recording, March 18
March 25: Free College: Factors to Consider

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

Presentation

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

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
April 1: Political Determinants of State Funding

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

Presentation

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

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

Presentation

Discussant:

Will Doyle, professor, Vanderbilt University

Webinar Recording, April 1