A new report by the State Higher Education Executive Officers association (SHEEO) indicates state funding support for higher education has increased in recent years nationally. However, when adjusted for inflation, spending on higher education is still below pre-recession levels. For the first time in years, public colleges’ reliance on tuition revenue dipped slightly — nationally from 47.7 percent to 47.1 percent — on a per-student basis relative to what they received from state and local appropriations. The shift was due to a combination of increases in spending for higher education in 37 states and an overall dip in student enrollment nationally as the economy has improved. The dip in student enrollments in Utah was also due to the LDS Church’s announcement lowering the minimum age for missionary service in 2012.
The most recent data highlights two trends: (1) increase in public funding is a hopeful sign of a more pronounced economic recovery than a possible short-term improvement in 2013, and (2) today’s students bear a far greater share of the costs than students of a generation ago. In 1989, net tuition in Utah represented 22.8% of total educational revenue at USHE institutions. Today, net tuition revenue has essentially doubled at 46.9% of total revenue. During this same time, the total revenue per student has increased only 10.1% (inflation adjusted). In other words, higher education’s sources of revenue in Utah has shifted away from state funding to tuition.
State Appropriations per Student
When adjusting for inflation (CPI), state appropriations per FTE student have increased since 2011 in Utah. However, despite those modest increases, state spending per FTE student in Utah from 2011-2014 continues to be the lowest on record. Student enrollment growth has impacted the amount of state funding per student: overall USHE institutions are educating roughly twice as many students as they were in 1989. However, during that same time period, state spending per student has decreased 25%.
Increased Cost Burden to Students
One of the results of the overall decrease in state spending for higher education is institutions’ increased reliance on tuition revenues to cover costs. Until 2010, Utah’s percentage share that students bear to cover their total cost of instruction (green line below) remained below the national average (orange line below). Since 2010, Utah has tracked with the national average. Fortunately, Utah students bear a much lower cost burden than students in surrounding states (blue line below), a contributing factor to Utah ranking the 3rd most affordable state for public 4-year tuition.
Data Source: SHEEO