States Slow to Increase Funding for Higher Education, with Only Two at Pre-recession Spending Levels

A recently released study shows that nearly all states are still spending less on public higher education than they did prior to the recession, revealing the slow pace at which states are increasing funding for higher education.

The third annual State Report Cards project by nonprofit advocacy group Young Invincibles, which represents the interests of 18- to 34-year-olds, shows that more than 95 percent of states are spending less on higher education than they did before the 2008 economic downturn.

The project’s researchers graded each state on its support for public higher education by looking at specific metrics; these included tuition increases, the subsequent financial burden placed on students and families, and the availability of need-based financial aid. Of all the states, 19 received an overall grade of F.

Three-quarters of all college students attend public institutions, for which states cut per-student spending by an average of 21 percent between fiscal years 2008 and 2014, according to an analysis of the study. While state support for higher education is slowly beginning to increase, currently only two states — Alaska and North Dakota — are spending as much per student as they did before the recession.

States spending the least amount of money include Louisiana, at the bottom, which has cut its higher education budget by 41 percent since 2008; Alabama, with cuts up to 39 percent; and Pennsylvania, which cut spending by 37 percent.

According to the study, tuition and fees at both two- and four-year public institutions increased an average of 28 percent since 2008, as a result of state cuts in higher education funding. The states that saw the steepest tuition increases were Arizona, with a 72 percent hike, followed by Georgia and Louisiana, with 68 percent and 66 percent increases, respectively. However, several states, like Ohio and Missouri, kept tuition increases at or below 10 percent.

Several states are now approaching their pre-recession higher education spending levels, including Indiana — which is spending 4 percent less than it was in 2008 — New York, Montana, and Wyoming, all of which are spending only 5 percent less than they were in 2008.

Tom Allison, deputy policy and research director at Young Invincibles, said that things are improving, with nearly 36 states spending more per student this year than last year.

“That’s encouraging,” he told U.S. News & World Report. “But at the same time, there are some states that have either cut so much since the recession that they’re not on track to recover, or there are states that cut funding this year over last year, like Kansas, New Jersey, and New Mexico.”

Cuts in funding have shifted the financial burden of college onto students and their families. The study shows that students paid an average of 50 percent of the cost of public college in 2014, compared with 36 percent in 2008.

This year’s study also measured the gap in postsecondary attainment rates between white, African American, and Latino students. An analysis of the data shows that the gap between white and Latino students with degrees grew by 2.2 percent between 2007 and 2015, and the gap between white and African American students widened by almost half a percentage point.

“I was pretty disappointed to see … the attainment gap between Latino and African American students grow compared to white students since 2007,” Allison said. “Given the current climate and discussion about race relations in this country, we should look very closely at that.”

In order to address the lingering issue of student debt, Allison believes that systemic budget cuts will need to be addressed at the state level.