Tuition Revenue Rises at Public Universities, Colleges as State, Local Appropriations Decrease

An August 2015 report prepared by an independent consulting firm for the Association of Public & Land-grant Universities (APLU) seeks to answer the question: How Did Revenue and Spending per Student Change at Four-Year Colleges and Universities Between 2006-07 and 2012-13? During the six-year period analyzed, four-year public universities experienced a net loss of $430 per full-time student, as  funding cuts amounted to $2,370 per student after adjusting for inflation, while tuition and fee revenues increased by only $1,940 per student. Despite this net loss, four-year public universities increased educational and related expenditures by $528 per full-time student.

The study categorizes public institutions based on the Carnegie Classification of research activity, which segments colleges and universities as very high research, high research, or other. Enrollment grew across each group, increasing by 10 percent at very high research institutions, 12 percent at high research institutions, and 8 percent at other institutions. Education and related expenditures also increased across all groups at very high research institutions increasing by 7 percent during the six-year study period, while high research and other public institutions each saw these expenditures increase by 1 percent. The core revenues that support public universities and colleges, represented by the sum of tuition revenues and state and local appropriations, declined across all groups. On a per full-time student basis, core revenues declined by 1 percent at very high and high research intensive institutions, and by 5 percent at other institutions.

The main reasons for the decline in core revenues are decreases in state and local appropriations.  Very high research intensive public institutions saw their state and local appropriations decrease by $3,460 per full-time student (29 percent), while high research-intensive institutions saw decreases of $1,989 per student (24 percent), and other institutions saw a reduction of $1,854 per student (23 percent). As a result of these decreases, state and local government appropriations as a share of total revenues declined across all of the groups.

A decrease in government appropriations coincided with an increase in tuition revenues over the six-year study period. Tuition revenues increased by $3,183 per student (33 percent) at very high research institutions, by $1,758 per student (23 percent) at high research institutions, and by $1,188 per student (22 percent) at other institutions. These increases largely made up for the decline in state revenues, although the sum of state and local appropriations plus tuition and fee revenues still declined by 1 percent at very high and high research-intensive institutions, and by 5 percent at other public institutions.

Education and related expenditures also increased on a per-student basis throughout the six-year time period, especially at very high research-intensive institutions. These public universities and colleges saw expenditures increase by $1,328 per student (7 percent), while high research and other institutions saw modest increases of $118 per student (1 percent) and $178 per student (1 percent), respectively.