The Current State of Higher Education Funding
State and local governments have once again increased their investments in public higher education, marking the 11th consecutive year of financial commitment growth. According to the State Higher Education Executive Officers Association, the fiscal year 2023 saw a 3.7% increase in funding, considering inflation adjustments. The per full-time equivalent (FTE) student appropriations have risen to the notable amount of $11,040, surpassing pre-Great Recession levels for the second time. This suggests a period of recovery in public higher education funding, with appropriations reaching heights not seen since before the 2007-2009 economic downturn. Financial dedication on the part of state and local governments appears to be unwavering, at least in the short term.
Yet, even with this positive trajectory, the landscape of public higher education is not without its challenges. Enrollment figures have been steadily declining, with a 0.5% drop in 2023 alone, culminating in a total decrease of 12.1% from a peak just after the recession in 2011. These diminishing enrollments, set against a backdrop of rising funds, have resulted in higher investment per student. This paradox presents a financial quandary; although per-student funding is up, net tuition revenues per FTE are falling. This development could point to stress fractures within the system that may not be sustainable in the long run without strategic solutions.
Enrollment Decline and Financial Implications
Public higher education faces a critical juncture as decreased student enrollment persists, despite more state and local funding. This trend has unexpectedly raised funding per student but hasn’t secured financial stability, as net tuition revenues per student fall. The uncertain future of this funding model becomes more complex with the eventual drying up of federal coronavirus relief funds. Not all states have recovered equally after the recession, with some like Arizona, Louisiana, and Nevada still lagging behind. As a response, a coordinated state-driven effort is necessary to ensure the sustainability of public higher education funding. Though recent investments incite hope, the reliance on decreasing enrollments and temporary federal support raises doubts about long-term financial viability. The way forward for these institutions must involve strategic planning and flexibility to adapt to changing circumstances, safeguarding the future of higher education.
