For only the second time in history, state funding to public colleges in 2023 exceeded per-student funding levels unseen since before the Great Recession.
Public higher education appropriations rose nearly 4% beyond inflation last year, according to the State Higher Education Finance’s annual report. Perhaps more relevant to higher ed leaders, fiscal year 2023 saw the largest decline in tuition revenue since SHEF began tracking such data in 1980.
Following a brief recession in 2020 due to the COVID-19 pandemic, historical patterns following economic recessions reversed in 2021, ’22 and ’23, the research adds. Instead of the traditional decrease in state funding following a recession, education appropriation increased for the 11th straight year, rising $1,247 per full-time equivalent from 2020 to 2023.
The data suggests three notable trends that contributed to such increases in education appropriations: increasing state commitments to higher education funding, a sharp decline in FTE (full-time equivalent) enrollment and generous stimulus funding.
“Seeing additional increases in state support for higher education demonstrates a continued commitment in many states to fund financial aid and their public institutions,” SHEEO President Robert E. Anderson said in a public statement. “It’s encouraging to see that even as federal stimulus funds dwindle, states are investing in higher education and see the value it brings.”
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Some additional findings from the report:
- Public FTE enrollment has declined for 12 straight years to 10.2 million in 2023, down 0.5% since 2022 and down 12.1% from an enrollment peak in 2011.
- Education appropriations increased 1.6% at two-year institutions and 4.2% at four-year institutions. Without federal stimulus funding directed by states to higher education and without the decline in FTE enrollment, inflation-adjusted education appropriations still would have increased 5.8% from 2020.
- Inflation-adjusted net tuition revenue decreased 3.3% in 2023 and has declined 9.4% in the last five years. Public institutions received $7,353 per FTE in net tuition and fee revenue in 2023.
- Public institutions in 37 states and Washington, D.C. collected less tuition revenue than they did five years ago.
To view the rest of the report’s findings, click here.
