Despite the American economic outlook having improved considerably, nationally, state funding for higher education has only halfway recovered in the ten years since the Great Recession, a new report released this week by the State Higher Education Executive Officers Association (SHEEO) finds. The 2018 State Higher Education Finance (SHEF) report—an annual, nonpartisan analysis of educational appropriations, tuition revenue, and enrollment trends in all 50 states—also explores how students and families came to shoulder more responsibility for supporting public higher education as states attempted to rebound from the 2008 financial crisis.
This year’s SHEF report marks the culmination of a ten-year data set since the Great Recession and offers a comprehensive look at how states navigated complex funding environments and undertook efforts, where possible, to restore public investments in higher education as they recovered from a significant economic downturn.
In addition to providing a decade-long snapshot of states’ levels of investment in public higher education in the wake of the Great Recession, this year’s SHEF report also details year-over-year changes in measures such as state and local support for higher education, educational appropriations, net tuition revenue, total educational revenue and full-time equivalent enrollment (FTE).
Report highlights include:
Higher education funding is stabilizing.
Nationally, state and local per-student support for higher education increased at roughly the rate of inflation from 2017 to 2018. This minimal growth follows a five-year period of annual funding increases greater than 2%, indicating that state appropriation recovery from the Great Recession has stabilized, albeit at a much lower level.
In Utah, the total education revenue per FTE has gone back to pre-recession levels. In fact, it has increased 3.7% since the Recession, ranking 11th in the nation as compared to other states in percent change in total education revenue per FTE from FY 2013-18.
FY 08: $13,005
FY 13: $11,519
FY 17: $13,440
FY 18: $13,486
Index to US Avg: 0.93
1-year % change: 0.3%
5-year % change: 17.1%
Change since Recession: 3.7%
A new norm for the student share of higher education funding has arrived.
For the first time since the Great Recession, net tuition revenue remained flat in 2018, indicating that the growing reliance on net tuition as a revenue source—the student share—might be leveling. While tuition revenue measures more than just rate increases, flat tuition revenue may be a sign of the impacts of increasing pressure and attention on college affordability. However, the student share has increased significantly since before the Great Recession.
There’s good news when it comes to financial aid.
Unlike the rest of state higher education funding, states have increased their public financial aid consistently over time. In 2018, state financial aid saw the largest increase since the Great Recession. Financial aid now represents nearly 10% of all appropriations, and encouragingly, evidence shows that states largely protect this source of support during economic downturns.
Unfortunately, Utah ranks among the last in the nation for state financial aid, and is the last in the nation for amount of state need-based aid. With the passage of this year’s H.B. 260 Access Utah Promise Scholarship (Rep. Derrin Owens), Utah will see a new scholarship program devoted to helping those who cannot cover the cost of tuition and fees at public colleges and universities in the state. Utah will join a growing number of states that are focusing their state resources on need-based financial aid.