Public Funding for U.S. Colleges Rebounds After Years of Decline

Public funding for U.S. colleges increased for only the second time in five years last year, following declines that forced schools to increase tuition and cut costs.

State and local government appropriations for higher education rose 0.7 percent to $81.6 billion in 2013 from $81.1 billion the year before, the State Higher Education Executive Officers said in a report released today. Preliminary data show a 5.7 percent increase is anticipated in 2014, the Boulder, Colorado-based group said.

“It looks as if things have bottomed out and are starting to climb back in at least most of the states,” said George Pernsteiner, president of the group known as SHEEO, which produces the annual report with assistance from the College Board.

Public colleges have come to count more on tuition and student fees since states and local governments cut support for higher education in the wake of the worst recession since World War II. Funding is down from $88.7 billion in 2008, reaching a low point last year, and would have fallen even further if not for aid made available through the American Recovery and Reinvestment Act in 2009, according to the report.

Net tuition accounted for 47.4 percent of total educational revenue at public universities and colleges last year, a rate the group called unsustainable.

Of the 50 states, 30 increased funding last year, with the pattern of support reflecting the different pace of regional economic recovery across the U.S., Pernsteiner said. Almost all of the funding went directly to public institutions, with about $2.5 billion set aside for financial aid for students attending private or out-of-state schools, according to the report.

Full-time enrollment at public institutions fell 2.4 percent to 11.3 million students last year after increases both before and after the onset of the recession in 2007, according to the report. Over five years, enrollment is up 10 percent through 2013.