We tested 1,600 Americans on their knowledge of higher education finance. Americans were asked how much students, states, and the federal government chips in to cover the costs associated with obtaining a college degree. Here's what they said, and what we know.
Perception vs. Reality: Higher Education Finance
Photo: Aaron Hawkins / Flickr
44 percent of Americans believe states have increased their spending on higher education in the last 10 years.
Overall, state funding decreased (in 2016 dollars) from $91.6 billion in 2006 to $90.5 billion in 2016. And per full-time equivalent, it fell from $9,303 in 2006 to $8,171 in 2016.
Source: State Higher Education Finance: FY 2016 (Boulder, CO: State Higher Education Executive Officers, 2017).
Although tuition has increased for a number of reasons, state disinvestment has certainly had an outsized impact on the amount students and families must contribute to pay for a college education. While the federal government may be helping foot the bill, in the form of grants and other aid, students and families ought not be fooled—state disinvestment has had a measurable impact on college pricing.
Since 2006, average tuition at public colleges and universities has risen by 35 percent (all figures calculated using State Higher Education Executive Officers Association data). Students and families across the U.S. are intimately aware of this skyrocketing tuition, which has left many of them reliant on loans and grant aid to afford college. However, it’s unclear to many what primarily is driving these growing prices.
Nearly half of respondents in New America’s annual survey said that they did not believe states have cut funding to higher education in the last ten years. In other words, despite higher tuition bills at their colleges and universities, many Americans are not convinced that state legislatures are necessarily to blame.
States’ financial retreat from their higher education systems in recent decades has not been consistent. For example, after adjusting for inflation, state legislatures across the U.S. have eliminated a combined total of more than $1 billion over the last ten years from their higher education budgets. But some states have cut much more than others, and contrary to general trends, a few have even increased their level of investment. Given the variances in how each state responded to the financial aftermath of the Great Recession in 2009 and the lack of clarity about how resulting state budgets have affected the college pricing, Americans’ perception about state higher education funding is partially understandable.
A total drop of about 1.2 percent—from $91.6 billion in 2006 to $90.5 billion in 2016—may not seem like a large reduction at first glance, but this figure masks a much more consequential erosion of state support to higher education—especially when evaluated on a per-student basis. Over the past ten years, national enrollment in higher education has grown by over 1.2 million in tandem with modest decreases to states' higher education budgets. When the economy slumped, more people entered higher education to retool and compete for employment in a tough job market. These spikes in enrollment have effectively led to a much larger 12 percent cut to per-student spending.
Credit: Ben Barrett
45 percent of Americans believe the federal government has increased its spending on higher education in the last 10 years.
Overall, federal funding increased from $100.7 billion in 2005–06 to $158.3 billion in 2015–16.
Source: Trends in Student Aid 2016 (New York, NY: College Board, 2016).