Thursday, May 31, 2012

Why Is State College Tuition Spiking? It's A Lack Of Funding

Yesterday I linked to a piece on the Carpe Diem Blog that argued that "college for all" was bad policy.  The post noted the increase in tuition and attributed it entirely to an increase in demand.  However, it's really a lack of funding that has been shifting the burden of state schools onto the backs of students.  Consider these data points:

From 1990-1991 to 2010-2011, total state appropriations rose from $65.1 billion to $75.6 billion. But state funding actually declined in relative terms. [From Bonddad: in inflation adjusted terms, this is a decline]

If states had provided the same level of per capita support as in 1990-1991, they would have invested $80.7 billion in 2010-2011.

If states had provided the same level of funding per public, full-time equivalent student as in 1990-1991, total appropriations in 2009-2010 would have equaled approximately $102 billion, an amount 35.3 percent higher.

The proportion of their revenues that public colleges and universities received from state appropriations dropped from 38.3 percent in 1991-1992 to 24.4 percent in 2008-2009. Rising tuition, fees, and room and board represent a shift in support from the state as a whole to individual students and their families.
In addition, the financial aid system has failed to keep pace with escalating costs, forcing students and their families to rely on financing strategies that reduce their odds of completing school.

States reoriented their financial aid programs away from need-based assistance to merit-based aid, which favors wealthier students. Students not only pay more than they used to but also borrow more extensively.

The state school system used to provide a great, inexpensive way for students without means to obtain an affordable college education.  But the lack of investment in  these systems over the last 20 years has led to an increase in tuition costs.