Institutions highly dependent on state funding will inevitably suffer lower graduation rates if appropriations decline, but more money won’t necessarily increase student outcomes, declares a study from the Bipartisan Policy Center.
The Washinton D.C.-based think tank analyzed reports conducted by the Urban Institute and the Midwestern Higher Education Commission (MHEC) and various scholarly articles from the past decade to observe how variance in state appropriations affects the attainment rates of public institutions.
One of the most considerable findings was from Midwestern Higher Education Commission, which estimates that a 10% increase in institutional funding can sometimes lead to little or even worse (-1.04%) graduation rates. However, Black and Hispanic students were more likely to benefit from increased funding. The former especially benefited if they attended an HBCU.
More from UB: Are free tuition programs really helping students?
Among the top reasons why increased state funding is only one small piece of the graduation puzzle are:
- Institutional efficiency in translating increased funding into improvements in student outcomes.
- Variance in where leaders decide to put the money, such as in program expansion or enhancing “institutional prestige.”
- Whether or not institutions are investing in evidence-based strategies or interventions proven to improve student outcomes.
Proper investment in evidence-based strategies that boost student retention and completion can end up being a cost-effective strategy. Researchers noted that while one community college initiative out of Ohio cost more per student than usual services, it ultimately led to a lower cost per degree.
While increased state appropriations may not directly lead to increased attainment rates for all students, decreased funding will most likely hurt students, especially those from low-income and underrepresented backgrounds balancing work and family, the authors noted. “Reductions in expenditures on student services can limit the ability of institutions to help students address both academic and non-academic barriers to success.”
Ultimately, all students’ progress toward a degree can be impeded by budget cuts that increase class sizes, create longer course waitlists and deteriorate the quality of advisors. One study estimates that a 10% drop in funding leads to a 3.6% drop in graduation for bachelor’s-seeking students at public research universities. However, popular institutions can usually fare better by increasing tuition or by seeking more fundraising.
