New Report: Public Universities Investing More Resources in Educating Students Despite Dramatic State Funding Cuts Not Fully Offset By Increase in Tuition Revenue

Association of Public and Land-grant Universities Warns that National Goal of 60 Percent of Adults with Post-Secondary Degree is in Jeopardy Without Renewed State Support of Public Higher Education

An independent report released today finds that overall four-year public universities have expended more resources educating students despite absorbing overall funding losses due to state budget cuts not fully offset by tuition and fee revenue. During the six year period of 2006-07 to 2012-13, after adjusting for inflation, four-year public universities experienced state funding cuts of $2,370 per student, while tuition and fee revenues increased by only $1,940 – a net loss of $430 per full-time student. Over that same period of time, four-year public universities increased educational and related expenditures by $528 per full time student.

APLU, for which the research firm Postsecondary Analytics conducted the study, noted that public universities have worked to become more efficient despite a loss of state funding and increasing costs in areas such employee health care that have risen faster than inflation.

“Despite steep state budget cuts, universities have devoted more educational resources per student and are choosing to make cuts elsewhere,” APLU President Peter McPherson said. “While public universities have sought to protect students by not fully offsetting their loss of state funding with tuition dollars, the increased cost burden forced upon students and their families is unsustainable. States need to restore funding for public universities instead of viewing students and their families as alternative funding streams that can make their budgets look whole. While many states have begun to provide slight funding increases, those new levels are still well below levels from just a few years ago. In order for the U.S. to reach its goal of 60 percent of the U.S. working age population with a postsecondary degree we need renewed state investments to make public institutions accessible and affordable to more students, particularly those from lower and middle income backgrounds.”

The study looked at 621 four-year public institutions, which educate more than 6.3 million students. Key findings when comparing 2006-07 to 2012-13 include:

• State and local appropriations per full-time student dropped from $9,250 to $6,880 – a loss of $2,370.
• Tuition revenues per full-time student rose from $7,111 to $9,051 – an increase of $1,940, which is $430 less than the amount lost in state and local funding.
• Despite a loss of overall funding, education and related expenses increased by $528 from $15,776 to $16,304 per full-time student.

One of the study’s authors, Dr. Nate Johnson, noted, “The data makes clear that a loss of state support, and not institutional spending, has been the big driver behind tuition increases at four-year public institutions. During the recession, as state budgets declined, the amount of state funding that supported each student’s education effectively declined by $2,400, while tuition and fee revenue per student increased by only $1,900 per student.”

APLU and the American Association of State Colleges and Universities (AASCU) have been working collaboratively to increase the number of quality degrees awarded by public universities. The two associations developed Project Degree Completion in which nearly 500 public colleges and universities have pledged to collectively work to increase not just the number of Americans who go to college, but the number who finish and earn a degree. The participating institutions committed to awarding 3.8 million more degrees by 2025 as the public college and university contribution to the national goal of having 60 percent of working age adults in the U.S. possess a post-secondary degree by that time. The total number of college degrees granted by these four-year institutions would rise an estimated 14.6 million to 18.4 million between 2012 and 2025.

To facilitate this progress, APLU has developed a wide array of projects and initiatives designed to help further strengthen universities’ work to increase access, contain costs, improve retention, better track progress, and ultimately grow completion rates. The association recently announced the five finalists for its 2015 Project Degree Completion Award, which seeks to identify, recognize, and share the work of public universities that employ innovative approaches to improve retention and degree completion.

While the report released today details aggregate national figures, there is increasing variation among states in funding public universities. During the recession, the situation was similar in the vast majority of states with funding cuts and rising tuition levels. However, coming out of the recession, individual states are responding differently in how they fund public universities.