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State funding for higher ed only half recovered

April 18, 2019

State funding for higher education has only halfway recovered in the 10 years since the Great Recession, according to a recent State Higher Education Finance (SHEF) report. The report also found that while higher education funding is stabilizing, the shift to greater reliance on tuition as a revenue source has leveled off, but remains higher than since before the Great Recession. During the Great Recession, appropriations dropped 24.4 percent from the high in 2008 ($8,848 per full-time equivalent enrollment) to $4,489 in 2012 due to enrollment growth without a proportional funding increase. That trend reversed in 2013 as appropriations increased for five straight years, but have remained flat from 2017 to 2018.

The report, the sixteenth annual state study for the State Higher Education Executive Officers Association, shows that educational appropriations grew steadily in the 1990s, but a recession in the early 2000s led to four years of declines. As the economy recovered, appropriations increased in 2006 and 2007 and reached a high in 2008.

In 2018, states appropriated almost $2,000 less per student than they did in 2001 and $1,000 less than before the Great Recession, showing that 10 years after the Great Recession, state funding has only halfway recovered.

Enrollment levels stabilized from 2017 to 2018, which had increased during peak recession years and subsequently declined as the economy recovered. One policy analyst that worked on the report noted that although state funding for higher education had only halfway recovered on a per-student level, some states had fully restored appropriations to prior levels, while others increased tuition to offset the reduction in state funding and some have not recovered at all.

higher ed, funding