Useful Stats: Roller coaster ride of state support for higher education from FY 1980-2024 continues

State support for higher education in the United States over the last four decades can best be characterized as having fluctuations and shifts in priorities. Using fiscal year (FY) 1980 as a starting point, while overall state support for higher education has grown, it has done so with volatility driven in part by decreased revenue as a result of recessions, and it has frequently taken years for state support to recover to pre-recession levels. In four states, state support on a constant 1983-dollar basis is still less than was spent in 1980. Looking back at the impacts of the Great Recession of 2008 is even more illustrative of the long recovery period after recessions; in FY2024, just 20 states and Washington, D.C., spent more in constant dollars than they did in FY2008. An additional nine states surpassed their FY2008 spending levels at some point after FY2011 but did not maintain that through FY2024. In fact, just one state, North Dakota, has provided support for higher education above FY 2008 values in every year since.

About the data and our methodology

Data for this article comes from the Grapevine Report on State Fiscal Support for Higher Education, produced annually by the State Higher Education Executive Officers Association (SHEEO). All data used is publicly available for download on SHEEO’s website. Data for each state’s full-time enrollment (FTE) comes from the National Science Foundation’s Indicators data sets.

The primary metric used in this article is state support for higher education, which includes funding for public and private institutions, state agency funding, state financial aid programs, research allocations, and funding for non-credit centers and programs. Refer to the Data Definitions page for the full definition of state support.

SSTI used Federal Reserve Bank of Minneapolis Consumer Price Index data for all urban customers (CPI-U), with 1983 as the index year, showing all dollar amounts in 1983 USD. This format allows for more accurate comparison of data over time. Note that CPI-U data is available to the tenths place and, as such, may not be as accurate as an online calculator that has more detailed CPI-U data available.

While SHEEO provides similar information on inflation-adjusted support, it uses a special inflation rate for higher education. SSTI opted to use the more familiar CPI-U data.

Support for higher education experiences peaks and valleys over 40 years

While total state support for higher education has increased from 1980’s $22 billion in constant 1983 dollars to $40 billion in 2024 across all states, that snapshot does not indicate how bumpy the ride has been. Additionally, while total support has increased, the amount spent per FTE is still below 1980 levels, as shown in Figure 1.

The picture is even grimmer when we look at state support just since the Great Recession of 2008. The Great Recession of 2008 triggered significant cuts in state funding, as seen in Figures 1 and 3, leading to stagnation and further decline in support levels for multiple years.

State support has yet to recover past 2008 values in most states, despite coming close in the years before the pandemic. See the leftmost line graph in Figure 1 below for more details on these trends and the rightmost line graph for details on state support on a per FTE basis.

The below table provides another way of viewing whether or when state support of higher education recovered from FY 2008 levels.

Table 1: Years in which state spending on higher education exceeded FY2008 support in constant 1983 dollars.

Unlike the Great Recession, coming out of COVID-19, post-pandemic recovery efforts and federal stimulus funds have mitigated much of the typical declines in inflation-adjusted state funding, causing the summative value of all states to dip slightly and even increase on a per FTE basis over the following years.

In FY 2023 and 2024, although not visualized in Figure 1, state support for higher education has increased beyond peak pre-pandemic values.

Figure 1: State support for higher education, USD, and USD per full-time enrollment.

As state support per FTE has decreased, institutions were faced with rising costs in various areas, including personnel, technology, facilities, and administration. The net effect is that institutions are relying more on tuition revenue to compensate for this shortfall.  This phenomenon is often called the cost-shifting or decoupling of state funding and tuition. Meanwhile, rising tuition and student debt concerns have prompted some states to prioritize funding for need-based financial aid and initiatives to improve college affordability.

State-level support for higher education shows uneven growth

The number of students enrolled in public colleges and universities has grown significantly over the past forty years. State funding per FTE in FY2022 (the most recent year available) is lower than it was in FY2000 (the oldest year available) in 29 states. Figure 2 maps out each state’s support for higher education from FY 1980-2024 and on a per FTE basis from FY 2000-2024.

Figure 2: State support for higher education by state.

Five quintiles were used in Figure 2, meaning that data points across all years were used to create five equal groupings, each representing a fifth of the data. The scale has been readjusted for each year based on the values for the given year, allowing for comparability between states.

To better illustrate the change over time for a given state, Figure 3 below shows the total state support value and state support per FTE for each state across all available years.

Clicking the “State Support” or “State Support per FTE” buttons below the title will toggle the visualized data. Note that state support per FTE values are only available for FY 2000 through 2022, while the overall state support values are available for FY 1980-2024.

Additionally, to make digesting such a large amount of data more accessible and meaningful, the number of states that can be visualized has been capped at five. To adjust the states visualized, click on the search bar below the metric toggle and either scroll or begin typing the state name, then click to select each state to be visualized. Note that the y-axis will automatically adjust based on the values of selected states.

Figure 3: State support, total and FTE, for higher education

A short overview of the data

State Support

Unsurprisingly, states with larger overall populations dominate the top spots for total state spending for higher education; California, Texas, Florida, New York, and Illinois have the largest total values of any state. California’s nearly $6.9 billion leads the second-largest state, Texas, by $2.5 billion and accounts for 17% of the national total.

On the other end of the spectrum, Washington, D.C. has the smallest value at $38.8 million, followed by Vermont’s $41.1 million, New Hampshire’s $55.6 million, and Rhode Island’s $79.8 million.

From FY 1980 to 2024, Nevada had the largest relative increase in funding per FTE, jumping over 327%. Utah and Florida also had 200%+ increases at approximately 247% and 200%, respectively. Over the same period, the national value increased by approximately 81%, from $22 billion to $40 billion.

Nineteen states had larger relative increases than the national value, while the remaining 31 had either smaller increases or had decreased.

Pennsylvania, Rhode Island, Michigan, and Iowa were the only states to have decreased, with percent changes of -19%, -9%, -6%, and -5% from FY 1980 to 2024, respectively.

State Support per FTE

In FY 2022, Washington, D.C. had the largest support per FTE at over $16,200, followed by Alaska at approximately $8,100, Hawaii at nearly $8,000, Connecticut at $7,000, and Illinois at $6,500.

Illinois had the largest relative increase in its state funding for higher education on a per FTE-basis from FY 2000 to 2022, jumping 41%. Hawaii follows with a 31% increase, then Tennessee at 27%, Alaska at 25%, and North Dakota at 19%.

The summative national value decreased 13% over the same period, from approximately $4,000 to $3,500 per FTE. A total of 22 states fared better than the national value, with 14 increasing and eight having smaller decreases, while the remaining 28 had a larger decrease.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.