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A New Report Finds Higher Education Funding Is Still Not Back to Pre-Recession Levels

These charts show what a lost decade of higher education funding looks like.

In 2017, inflation-adjusted overall state funding for public two- and four-year colleges was almost $9 billion less than it was in 2008. That grim statistic comes courtesy of a new report from the Center on Budget and Policy Priorities, a liberal think tank, on America's "lost decade" of higher education funding.

As the chart below, from the report, indicates, only five states spend more today than they did before the Great Recession. The average state spent $1,448 (or 16 percent) less per student in 2017 than in 2008. In eight states—Alabama, Arizona, Illinois, Louisiana, New Mexico, Oklahoma, Pennsylvania, and South Carolina—per-student funding fell by 30 percent between 2008 and 2017.


As states rushed to cut spending during the tight years of the recession, public schools responded by both cutting spending (on courses, teachers, and other programs) and increasing tuition (although funding cuts aren't the only driver of rising tuition). Average annual published tuition has increased by 35 percent (or $2,484) since 2008, and the increases have been even sharper in some states, as the figure below illustrates:


These tuition increases have occurred as incomes have stagnated for all but the very top earners. "Tuition jumped more than 34 percent between the 2008 and 2015 school years, while real median income grew merely 2.1 percent," the report's authors write.

Researchers have a pretty good idea of what happens when states underfund public institutions of higher education. Low-income and minority students, alarmed by sky-high tuition figures, are less likely to enroll, or may choose less-selective institutions with lower advertised tuitions. In the face of limited capacity and course offerings at cash-strapped community colleges, some students may instead be forced to enroll in for-profit institutions, increasing the likelihood that they'll graduate in debt, without a useful degree or credential.

Some of these funding trends are beginning to reverse themselves—most states modestly increased higher education funding this year—but these small increases aren't enough to make up for the declines of the last 10 years. What's more, both the Trump administration and House budgetary committees have proposed cuts to federal financial aid, cuts that would further diminish the ability of low-income students to access higher education.

The financial returns to education have never been higher than they are today, and a post-secondary degree or credential is increasingly a requirement for obtaining a middle-class lifestyle in this country. Researchers at Georgetown University have predicted that almost two-thirds of jobs will require some post-secondary education by 2020. Yet most states are failing to increase investments in post-secondary education at the exact time that those investments are so needed.