Study Shows Drop in State Support for Higher Education

Jan 19, 2010

''Grapevine,'' in cooperation with the State Higher Education Executive Officers (SHEEO), just released a survey of state financial support for higher education for the 2009-2010 fiscal year. Across the country, the results were dismal.

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A Financial Crisis

Illinois State University's Grapevine publication reports that, for the 2009-2010 fiscal year (FY10), total state support for higher education is at $79.4 billion. That's a drop of 1.1% from FY2009 and 1.7% from the year before that - even with a big boost from federal stimulus dollars. The Grapevine report indicates that without the stimulus funds, state support would have been down 3.5% over the past year and 6.8% over the past two years.

These declines are troubling because they indicate a sharp reversal of recent patterns. The period from 2005 to 2008, when states were not receiving stimulus money directed toward education, saw a 24% increase in state financial support for postsecondary institutions.

Changes in state financial support over past decade

From the Chronicle of Higher Education

The current negative trend isn't expected to improve any time soon. Thirty-nine states are predicting mid-year reductions for higher education funding, totaling nearly $34 billion, and 40 states expect further revenue shortfalls for the 2011 fiscal year. Paul Lingenfelter, president of the State Higher Education Executive Officers (SHEEO), fears that the public commitment to higher education has reached 'crisis proportions.' He points to the rapid decline of state revenue, from which it will take years to recover, and also notes that over 5% of this year's state appropriations are coming from federal stimulus dollars, which are 'exhausted.' Furthermore, current enrollment numbers may not reflect actual student demand, in spite of the increases of the past two years. Many students have been deterred from enrollment by high tuition costs and overflowing courses, but schools will eventually have to meet their needs even with drastically reduced state support.

Map of state support changes in FY10

A map of recent changes in state support for higher ed from the Chronicle of Higher Education. Click here to view the interactive version.

There is, of course, significant state by state variation in the data. Eleven states, including California and Hawaii, saw declines of over 5% even with the federal money. On the plus side, several states reported positive appropriations gains in the current fiscal year. The top two, Montana and North Dakota, are states with relatively small populations that may not be experiencing as much financial strain from other state-funded services.

Grapevine published by Illinois State University

Since 1960, Grapevine has published annual statistics on state tax support for higher education. By looking at general fund appropriations for colleges, universities and community colleges, the publication offers an annual snapshot of how much financial support institutions of higher learning receive from state governments.

This year, Grapevine entered a new partnership with SHEEO, consolidating the Grapevine survey with their State Higher Education Finance (SHEF) project. The 2009 SHEF report, which will be released soon, offers a broader picture of trends in state support for higher ed that factors in inflation and enrollment. Although Grapevine's initial FY10 report doesn't include these considerations, it has for the first time expanded to include all forms of state funding for higher ed, such as lotteries and interest income from state-financed endowments.

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