News: State Policy & Advocacy

Less State Funding to Public Colleges = Fewer Students with a Degree

Thursday, August 8, 2019  
Posted by: Sancia Celestin, Policy Intern
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For many students, especially those with low-income status, the cost of attendance for and financial aid package offered by each college they apply to drives their decision of where to enroll. Public colleges and universities are often talked about as more affordable options, but that’s not always the case.

As a result of the 2008 recession, many states reduced funding for their higher education systems as a way to cut costs. In 2018, just nine states had restored their per-student spending for higher education to pre-recession levels, per data from the State Higher Education Executive Officers Association.

Often as a result of such funding cuts, public universities make tuition their primary source of revenue and spend less on instruction, according to a recent report from the National Bureau of Economic Research, which was highlighted by MarketWatch. According to the MarketWatch article: "At public colleges with courses that are less research intensive and educate a wider swath of students, a 10% drop in state appropriations produces a 3% drop in spending on instruction and a 1.5% decline in enrollment."

Bottom line: Less state funding per student affects the quality of education public universities can give. It is also associated with fewer students pursuing degrees.

We know that the value of a college degree continues to increase as more and more jobs require education beyond high school. Bachelor’s degrees are often attained from public institutions. The report notes, “public colleges account for about 64% of the nation’s bachelor’s degrees … in STEM fields.”

States rely heavily on public colleges to educate their workforce and to boost their economy, but some are failing to adequately support their public higher education institutions. When states pull back on appropriations, there are consequences for our communities: skyrocketing tuition prices, plunging enrollment, fewer resources for students, larger class sizes, and, ultimately, fewer degrees attained. These consequences can have the largest negative impacts on low-income, first-generation students.

From 2012-13 to 2016-17, the affordability gap for the average Pell Grant recipient at a four-year public college grew from a national average of $1,174 to $2,118, according to NCAN research. In that same time period, the average affordability gap for students at a two-year public college rose from $87 to $453.

Due to these growing gaps, roughly three-quarters of public four-year institutions and about half of two-year public colleges were unaffordable for the average Pell Grant recipient in 2016-2017, according to NCAN's affordability formula.

These affordability gaps make it difficult for students to complete their degree. Some students end up dropping out with no degree and a large amount of student loan debt. For others, this harsh financial reality may prevent them from deciding to go to college at all.

NCAN continues to emphasize the need for more support from states by advocating for need-based aid programs as well as the establishment of a state higher education funding strategy.

(Photo by Nathan Dumlao on Unsplash)