Decades late, most American states start trying to attempt to start to get around to trying to spend a little more money on higher ed

Some important new data just appeared about higher ed financing.

tl;dr version: there’s good news and bad news.

The good news is: nearly all American states spent more on public higher ed last year than they did the year before.

Orange is good. Green is better. Yellow is terrific. Map by Inside Higher Ed.

The bad news: that’s still way below what states spent in 2008, when the greatest financial crisis of our times hit.  And that was way below what states used to spend.

Now let me get into the details.

SHEEO logoThe data is the annual Grapevine report.  That’s produced by the State Higher Education Executive Officers (SHEEO) and the Center for the Study of Education Policy at Illinois State University.

Grapevine concluded that nearly all American states increased public higher ed funding by 5% over last year, and more than 18% compared with five years ago.  This increase appeared in absolute dollars and also when measured per capita.

You can see a very positive trend when looking at total American state spending on public higher ed:

2015: $81,313,423,272

2018: 88,245,094,149*

2019: 92,058,661,739

2020: 96,637,246,170**

There’s a good amount of variability by state.  You can see strong regional variations as well, with the south(east) and west really taking off:

state funding by region_SHEEO_2020

Columns 2-5 are FY14, FY17, FY18, and FY19.

Again, those are all increases.

So why is this happening?  The Grapevine lead puts it down to macroeconomic growth and a political shift:

“I think this is probably predictable given the state of the economy right now,” [Jim Palmer, the editor of the Grapevine survey and a professor of educational administration and foundations at Illinois State] continued. “In order for states to increase funding for higher education, two things need to happen. First, the states have to have the fiscal capacity to increase funding. And then of course, second, there has to be a political will to increase funding. I think that after several years of tuition increases, there is growing political pressure for states to perhaps increase funding and to counter the trend toward increased tuition.”

Excellent!  Then why am I not jubilating?

To begin with, we are still below where things were in 2008.  The Great Recession walloped American states, and funding has still not recovered.  Full credit to SHEEO for tracking this carefully.

Further, as great as 2008 sounds, that funding level is below where states once were.  As Chris Newfield has documented, American state governments spent a generation slashing per-student support from the 1980s on.  That Great Mistake, as Chris calls it*, represents one giant step backwards (and a powerful stride towards increasing student debt).  The Great Recession represents another big step back.  What Grapevine reports about the past year is a very, very tiny step forward.  We’ll need a lot more of them.

Thanks to Elizabeth Redden for giving us a fine look at the Grapevine data before the site itself shared it.

*I don’t know why they skipped 2016-2017 in this table.

**Let’s see if American states spending $100 billion/year on higher ed becomes a milestone.  At this rate it’s next year.

***Chris was also a great Future Trends Forum guest:

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3 Responses to Decades late, most American states start trying to attempt to start to get around to trying to spend a little more money on higher ed

  1. Keil Dumsch says:

    I just don’t know if this is good news at all. I’m in favor of at least a portion of the cost of college being funded by tax dollars, the way libraries, museums, and other learning entities are funded.

    But there are simply way too many public colleges and they are way too huge, lavish, and administrative-laden for this to keep going on. They simply are not being forced to contain costs. Plus college spending tends to benefit the middle class and above, and it conflicts with other progressive goals like pensions and social programs.

    In this piece Newfield himself acknowledges that many public colleges raised tuition in the 80s and 90s even as many states increased higher ed spending slightly. This was mainly due to the arms race to attract students and do well on the US News rankings.

    A better course of action than increasing spending is to cut costs to students (and taxpayers) with a gradual, steady proactive program of consolidation and contraction. Allowing third-party credentialing, making it illegal to hire by where someone went to college (thus ending the status jockeying), allowing students to take piecemeal coursework and not mandating four years of seat time, getting rid of extra fees, cutting administration and mothballing some buildings, enforcing a genuine free market for textbooks, etc.

    • Bryan Alexander says:

      Keil, thank you for this thoughtful comment.

      The solutions you discuss are mostly in play. Cutting admin, not so much.

      I’m not sure that increased state support would backfire. Public outrage at higher ed pricing and the debt monster is pretty fierce. The debt specter won’t go away unless there’s forgiveness.

      • Keil Dumsch says:

        State support at present or higher levels isn’t really feasible, given the size and number of colleges and the fact that a lot states have
        a need to fund pensions, social programs, prisons, and other things more pressing. I’m not sure there would be a lot of public support for higher levels either, especially from conservatives.

        I happen to agree that we should forgive some, most, or all of the college debt. But there are several problems, which I outline in my blog.

        Bottom line, we’ve let the college debt problem spiral out of control. It will be very difficult to fix.

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