Financing Higher Education: A Crisis in State Funding

Economic recession and stagnated state revenues lead to a future outlook of very little growth, and in many states, major cuts in state appropriations for higher education.

Public colleges and universities respond to decreasing state support by increasing tuition when not restricted by the state legislature. Colleges and universities may also respond by cutting academic programs, staff and faculty and delaying major purchases.The rising cost of higher education places a greater financial burden on the student and parent. Shrinking need-based student aid casts greater shadows on access and affordability for students with the greatest need.

Our intent is to provide perspective, data, headlines and resources on the state of higher education funding across the nation.

National Outlook

Baseline Trends
This chart illustrates a declining percentage of state's budget dollars being spent on higher education over a twenty year period.

The net price (tuition minus grant aid) of the cost of a college education over the past decade has increased more for students attending public institutions than private institutions.

State Funding Crisis

AASCU Tracks State Budgets
The American Association of State Colleges and Universities provides news on state budgets and tuition increases. Visit http://www.aascu.org/state_budget_weekly/default.htm.

Current State and Local Funding
The table below shows total state and local funding for education across the U.S. for Fiscal Year 2002.  See funding level in your state at http://www.coe.ilstu.edu/grapevine/table9.html.

Get details on fiscal year 2001-2002 and fiscal year 2002-2003 state funding appropriations by state for each institution at  http://coe.ilstu.edu/grapevine/Individual.htm.

State Higher Education Funding Relative to Per Capita and Personal Income
The following table shows the average appropriation for higher education relative to per capita and personal income of all states.

Look at how your state compares to the national average. Using the Measuring Up 2002: The State-by-State Report Card for Higher Education web site, additional state comparisons can be made on variables such as projected budget shortfall, average tuition, projected change in population, and student enrollment.

NEA Resources

The following reports from several NEA Almanac of Higher Education publications shed light on the issues of higher education finance:

Update, NEA's Research Center's research briefs, provide leaders with information on current research, trends and issues affecting higher education finance.

• "Access and Choice" January 2003
  This report illustrates how the nation continues to struggle with academic and financial access to a college education. Low-income students face large financial barriers. Increasing tuition costs have offset increases in student aid. Loans are the largest source of student aid for public two and four year institutions.
• "Faculty Salaries, 2002-03" September 2003
  Based on the findings in this report, it's clear that faculty salaries are not driving tuition increases. Over a 30 year period, the average salary (in constant dollars) for all ranks increased 4.6%.

NEA's Legislative Action Center
NEA member activism helps win fiscal relief for states to the tune of $20 billion. Take a look at the funding relief (Word doc) provided to each state under the Collins Amendment.

Most states show cuts to higher education appropriations for fiscal year 2003.

State Cuts to Higher Education in Fiscal Year 2003
Source: Education in Crisis: Update on the State Budget Crunch," prepared by the Democratic Staffs of the House of Representatives Committee on Education and the Workforce and Senate Committee on Health, Education, Labor, and Pensions, October 2002.)

On average, tuition and fees increased by 10% in 2002-2003 for selected public state universities.

In-State Tuition Increases at Selected Universities
Source: USA Today Survey of State Universities

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