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home : most recent : statewide implications July 19, 2018

4/5/2018 10:32:00 AM
Tuition exceeds state appropriations as primary revenue source in many states

Michael Reschke, Herald-Times

In more than half of all U.S. states, tuition has exceeded state appropriations as the primary revenue source for public higher education. It’s the first time, according to a recent report from the State Higher Education Executive Officers Association, but it’s not surprising.

The number of states where tuition is the primary revenue source has slowly crept up, said Sophia Laderman, a senior policy analyst with the national association. That number increased from 24 states during fiscal year 2016 to 28 in fiscal year 2017.

Reliance on tuition varies from state to state. Vermont led the way, with tuition counting for more than 86 percent of revenue for its public colleges and universities. In Wyoming, tuition accounted for less than 15 percent of revenue. Indiana was closer to the middle of the pack, with about 60 percent of revenue coming from tuition. At Indiana University, tuition accounts for more than 60 percent of a $3.5 billion operating budget. State appropriations accounted for about 27 percent.

Tuition tends to increase as a percentage of public higher education revenue after economic downturns. For instance, tuition accounted for about 35 percent of revenue for public higher education across the U.S. at the beginning of the Great Recession in 2008. By 2013, it hit an all-time high of 47.8 percent. It has come down since then, but not by much. In 2017, tuition accounted for 46.4 percent of total revenue.

States deserve some credit for increasing their total allocations for public higher education each of the past five years, Laderman said. However, state appropriations per fulltime student remain $1,000 below that of 2008 and nearly $2,000 below 2001 levels when adjusted for inflation.

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