FY24 brought increases in state financial aid, large declines in tuition revenue
The latest State Higher Education Finance (SHEF) report finds that in 2024, public higher education appropriations per full-time equivalent (FTE) increased 0.8% beyond inflation,
surpassing pre-COVID-19 pandemic funding levels in 2019 by 17.9%. The SHEF report also finds that public FTE enrollment increased for the first time after 12 consecutive years of declines. Yet fiscal year 2024 marks the largest decline in tuition revenue per FTE since the start of the SHEF dataset in 1980.
After a short recession in 2020 due to the COVID-19 pandemic, historical patterns following economic recessions reversed. Instead of the typical decrease in state funding following a recession, education appropriations increased for the 12th straight year, rising $1,774 per FTE from pre-COVID-19 levels. Additionally, inflation-adjusted education appropriations per FTE were greater than pre-recession funding levels in 2008 by 9.0%, or $969 per FTE. The increase in education appropriations per FTE over time can be attributed to three notable trends: increasing state commitments to higher education funding, a sharp decline in FTE enrollment, and generous federal stimulus funding.
Additional findings from this year’s report include:
- After 12 straight years of declines, public FTE enrollment increased, reaching 10.4 million in 2024, up 2.9% since 2023. Despite this increase, FTE enrollment was still down 10.8% from an enrollment peak in 2011. Nationally, public institutions have lost all the additional FTE enrollment gained following the Great Recession.
- State and local government funding for higher education totaled $139.1 billion in fiscal year 2024, including more than $624.1 million (0.4%) in federal stimulus funding. Inflation-adjusted federal stimulus funding for higher education declined 63.3% from fiscal year 2023.
- Education appropriations per FTE decreased 3.3% at two-year institutions and increased 1.8% at four-year institutions. Without federal stimulus funding directed by states to higher education, inflation-adjusted education appropriations still would have increased 1.8% from 2023. Although national-level education appropriations have consistently grown since 2019, 22 states continue funding higher education at a lower level than prior to the Great Recession.
- State public financial aid per FTE increased 4.8% from 2023 to 2024 and reached an all-time high of $1,155 per FTE enrolled student. These funds made up 9.9% of all education appropriations. Financial aid per FTE increased in 31 states in the last year.
- Inflation-adjusted net tuition revenue decreased 3.7% in 2024 and has declined 8.1% in the last five years. Public institutions received $7,510 per FTE in net tuition and fee revenue in 2024. Public institutions in 40 states and Washington, D.C., collected less tuition revenue than they did five years ago. Decreases in net tuition revenue are largely due to increases in state financial aid and minimal tuition rate growth (lower than the rate of inflation). Despite recent declines, since 1980, net tuition revenue per FTE has increased in every state and has increased by more than 100% in 41 states.
- Total education revenue decreased 1.0% from 2023 to 2024, reaching $19,092 per FTE. This marks only the second decline since 2013, the other being a 0.2% decrease from 2022 to 2023. Excluding federal stimulus funding, and if enrollment had held constant, total education revenue per FTE would have decreased 5.5% from 2023, but increased 0.5% from 2019.
- For the first time since 2010, the U.S. average student share dropped below 40%, decreasing to 39.3% in 2024. Thirty-two states saw declines, but student tuition and fees funding public higher education still comprised more than 50% of total revenues in 19 states. Continued increases in education appropriations and declines in net tuition revenue have reduced the proportion of total revenue financed by students.
As these findings demonstrate, fiscal year 2024 showed only small growth in education appropriations and the first increase in FTE enrollment since 2011. The continued decline in net tuition revenue puts greater pressure on states to continue investing in public higher education in the coming years. As federal stimulus funds run out, some states may face difficult budgetary decisions.
“We are encouraged by the recent increase in enrollment and the impactful increase in state financial aid investments. With uncertainty on the horizon for federal and state budgets alike, we know states will be under greater pressure to fund higher education,” said SHEEO President Robert E. Anderson. “While each state is facing its own unique circumstances, we hope lawmakers will continue to view public higher education as an investment in their state’s future workforce.”
The SHEF report broadly addresses the wide variation in how states fund public higher education. However, state-specific context is incredibly important when discussing higher education finance trends. “The trends detailed in the SHEF report reflect national and state averages, but there are almost always outliers in every trend. Even within states, there can be wide variation in the enrollment and revenue patterns at each institution,” said Kelsey Kunkle, Senior Policy Analyst at SHEEO and co-author of the report. “Nationally, 2024 showed slow growth, reinforcing the need for long-term, sustained investments as states explore new or different ways to address college affordability, educational quality, and inequality in educational attainment.”
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 interactive data visualizations, including individual state profiles. Look for more data from SHEF to be added to the website in the coming months.