Sources and Uses of Funding

1.

National Association of State Budget Officers. (2024). State expenditure report: Fiscal years 2022-2024. www.nasbo.org/reports-data/state-expenditure-report

2.

Unlike the SHEF data, NASBO expenditures exclude employer contributions to pensions and health benefits. NASBO defines state general funds as the majority fund for financing a state’s operations with revenues received from broad-based state taxes such as personal and corporate income tax, and sales tax.

3.

Delaney, J., & Doyle, W. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 36(4). http://www.jstor.org/stable/23018116

4.

Federal stimulus funding is provided to state governments to stabilize state and local sources of revenue for higher education. It includes funds from the American Recovery and Reinvestment Act (ARRA) during the Great Recession, the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, the 2020 Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, and the 2021 American Rescue Plan (ARP) during the COVID-19 pandemic. Federal stimulus must be state allocated and excludes aid used for capital projects and funds provided directly to institutions, such as the Higher Education Emergency Relief Fund (HEERF).

5.

In Washington D.C., district taxes are classified as state tax appropriations, not local support.

6.

Brown, P. (2023). SHEF: FY 2022 Issue Brief: Analyzing Lottery Proceeds as an Aspect of State Support for Higher Education. https://shef.sheeo.org/wp-content/uploads/2024/04/SHEF-Lottery-Funding_FY22.pdf.

7.

These funds have always been included in general public operations but were not available as a breakout until 2019.

8.

Rhode Island has not reported any RAM allocations since the start of the SHEF dataset.

Distribution of Revenue

9.

It is important to note that the U.S. level data are not averages of state averages. For example, “U.S. total education appropriations per FTE” is the sum of all education appropriations divided by the sum of all net FTEs across the 50 states. It is not the average of each of the 50 state’s individual per-FTE calculations.

10.

These adjustments are described in more detail on the data definitions page of the SHEF website (https://shef.sheeo.org/data-definitions/).

11.

The funding levels and trends over time shown in the U.S. wave chart differ substantially by state.

12.

Delaney, J., & Doyle, W. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 36(4). www.jstor.org/stable/23018116

13.

Weeden, D., (2018). State budget drivers: Slow revenue growth and increased expenditure competition. https://shef.sheeo.org/wp-content/uploads/2020/04/SHEEO_SHEF_FY18_IB_Budget_Drivers.pdf

14.

Maynard, M., (2024). How a pandemic-era surge in tax collections drove a revenue wave–and what it means for future state budgets. https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2024/08/how-a-pandemic-era-surge-in-tax-collections-drove-a-revenue-wave

15.

Each year, approximately one-third of education appropriations in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

16.

There are several differences in education appropriations between the state and sector levels. The state-level data include agency funding and all federal stimulus funding allocated to public institutions. The sector-level data exclude agency funding and include only the federal stimulus funding allocated to two-year or four-year public operating. In a few states, some uncategorizable state support and uncategorizable financial aid could not be allocated to either sector.

17.

According to the National Center for Education Statistics, in fall 2023, an estimated 37% of two-year students (at both public and private institutions) attended full time, compared to 73% at four-year institutions. Source: Table 303.70, https://nces.ed.gov/programs/digest/d23/tables/dt23_303.70.asp.

State Funding and Enrollment

18.

Trends in state-funded student financial aid for students attending public institutions differ substantially from trends in aid for students attending independent institutions. The composition of state financial aid has also changed over time. For more information, the 2019 SHEF Issue Brief (shef.sheeo.org/wp-content/uploads/2020/04/SHEEO_SHEF_FY19_IB_Financial_Aid.pdf) on state financial aid explores trends over time in state financial aid to public and private institutions by state.

19.

For more information about how states protected student affordability during the COVID-19 pandemic, see the SHEEO report, Effects of the COVID-19 pandemic on state tuition, fees, and financial assistance policies, at sheeo.org/wp-content/uploads/2023/04/COVID19-Tuition-and-Fee-Survey.pdf.

20.

 National Student Clearinghouse Research Center. (2024). Fall 2024 enrollment (as of September 2024). nscresearchcenter.org/stay-informed/

21.

Federal stimulus funds protected education appropriations in two ways: states received federal stimulus funding for other priority budget areas, reducing the need to redirect higher education funds toward those areas, and states received targeted federal stimulus funding directly to higher education.

 

22.

Each year, approximately one-third of education appropriations in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

23.

The large decrease in education appropriations from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

24.

The large decrease in education appropriations from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

25.

Unlike state-level education appropriations, sector-level education appropriations exclude agency funding and include only the portion of federal stimulus funding known to be allocated for two-year or four-year public operating purposes. In a handful of states, some state support and financial aid are uncategorizable, meaning they are not allocated to either sector, and are excluded from the sector-level data.

26.

Each year, approximately one-third of education appropriations in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

27.

The large decrease in education appropriations from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

28.

The large decrease in education appropriations from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

29.

In fiscal year 2023, Michigan created the Michigan Achievement Scholarship and disbursed financial aid awards to the first cohort of students in fiscal year 2024. See the Michigan State Spotlight.

30.

Overall, 1.7% of state public financial aid was uncategorizable. Thirty-seven states and Washington, D.C., were able to classify all state public financial aid by sector and listed no uncategorizable aid. In four states, more than 10% of aid could not be classified by sector: Alabama (17.1%), Colorado (13.9%), Ohio (15.9%), and Texas (15.0%). Additionally, in California, state funds for nontuition financial aid are classified as uncategorizable state support. Therefore, they are not included in sector-level data.

31.

State Higher Education Executive Officers Association. (2021). Investigating the impacts of state higher education appropriations and financial aid. https://sheeo.org/wp-content/uploads/2021/05/SHEEO_ImpactAppropationsFinancialAid.pdf

Net Tuition and Total Education Revenue

32.

Each year, approximately one-third of education appropriations, a primary component of total education revenue, in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

33.

The large decrease in education appropriations, a primary component of total education revenue, from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

.
34.

Each year, approximately one-third of education appropriations, a primary component of total education revenue, in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

35.

The large decrease in education appropriations, a primary component of total education revenue, from fiscal year 2023 to 2024 for Alabama is due to a one-time supplemental appropriation allocated to higher education in 2023.

36.

Each year, approximately one-third of education appropriations, a primary component of total education revenue, in Illinois go toward the state’s retirement pension system. See the Illinois State Spotlight for more details.

37.

State Higher Education Executive Officers Association. (2021). Investigating the impacts of state higher education appropriations and financial aid. https://sheeo.org/wp-content/uploads/2021/05/SHEEO_ImpactAppropationsFinancialAid.pdf

State Effort and Capacity to Fund Higher Education

1.

Tandberg, D.A., & Laderman, S.A. (2018). Evaluating state funding effort for higher education. MHEC Policy Brief. https://www.mhec.org/sites/default/files/resources/mhec_affordability_series6.pdf

2.

U.S. Department of the Treasury. (2002). Treasury methodology for estimating total taxable resources (TTR). 

3.

Higher education support refers to the sum of state tax appropriations, non-tax support, local appropriations, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use. Federal stimulus funding is not included.

4.

Higher education support refers to the sum of state tax appropriations, non-tax support, local appropriations, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use. Federal stimulus funding is not included.

5.

Higher education support refers to the sum of state tax appropriations, non-tax support, local appropriations, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use. Federal stimulus funding is is not included.

6.

Trostel, P.A., & Ronca, J.M. (2009). A simple unifying measure of state support for postsecondary education. Research in Higher Education, 50(3), 215-247.

Performance-Based Funding for Higher Education

1.

Gándara, D., & Rutherford, A. (2018) Mitigating unintended impacts? The effects of premiums for underserved populations in performance-funding policies for higher education. Research in Higher Education, 59, 681-703. doi.org/10.1007/s11162-017-9483-x 

2.

Hearn, J. C. (2015, November). Outcomes-based funding in historical and comparative context. Lumina Foundation. luminafoundation.org/files/resources/hearn-obf-full.pdf

3.

Hillman, N., & Corral, D. (2017). The equity implications of paying for performance in higher education. American Behavioral Scientist, 61(14), 1757–1772. doi.org/10.1177/0002764217744834

4.

Boland, W. C. (2018). Performance funding and historically black colleges and universities: An assessment of financial incentives and baccalaureate degree production. Educational Policy. doi/pdf/10.1177/0895904818802118; Hillman, N. W., Tandberg, D. A., & Fryar, A. H. (2015). Evaluating the impacts of ‘‘new’’ performance funding in higher education. Educational Evaluation and Policy Analysis, 37(4), 501–519.; Hu, X. (2019). Efficiency for whom? Varying impact of performance-based funding on community colleges in Louisiana. Community College Review, 47(4), 323–359.; Ortagus, J. C., Kelchen, R., Rosinger, K., & Voorhees, N. (2020). Performance-based funding in American higher education: A systematic synthesis of the intended and unintended consequences. Educational Evaluation and Policy Analysis, 42(4), 520–550. doi.org/10.3102/0162373720953128; Rutherford, A., & Rabovsky, T. (2014). Evaluating impacts of performance funding policies on student outcomes in higher education. The ANNALS of the American Academy of Political and Social Science, 655(1), 185–208. doi.org/10.1177/0002716214541048; Tandberg, D. A., & Hillman, N. W. (2014). State higher education performance funding: Data, outcomes, and policy implications. Journal of Education Finance, 39(3), 222–243.

Student Residency in Higher Education Finance

1.

National Center for Education Statistics. (2022). Table 309.30. Residence and migration of all first-time degree/certificate-seeking undergraduates in 4-year degree-granting postsecondary institutions who graduated from high school in the previous 12 months, by state or jurisdiction: Fall 2020. Digest of Education Statistics. nces.ed.gov/programs/digest/d22/tables/dt22_309.30.asp; National Center for Education Statistics. (1990). Table 189. Residence and migration of all freshmen students in 4-year colleges graduating from high school in the past 12 months, by State: Fall 1988. Digest of Education Statistics. nces.ed.gov/pubs91/91660.pdf

2.

Jaquette, O., & Curs, B. R. (2015). Creating the out-of-state university: Do public universities increase nonresident freshman enrollment in response to declining state appropriations? Research in Higher Education, 56(6), 535–565. doi.org/10.1007/s11162-015-9362-2

3.

State Higher Education Executive Officers Association internal dataset on state tuition, fee, and financial assistance policies. sheeo.org/project/tuition-and-fee-survey/

4.

Ma, J. and Pender, M. (2023). Trends in college pricing and student aid 2023. College Board. research.collegeboard.org/media/pdf/Trends%20Report%202023%20Updated.pdf

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