Full-Time Equivalent (FTE) Enrollment

Full-time equivalent (FTE) enrollment converts student credit hours to full-time academic year students. Net FTE excludes medical students.

There were 10.8 million FTE enrolled students in 2025. Net FTE enrollment increased 3.6% in 2025, a gain of 378,895 FTE students, marking the third year of enrollment gains after 11 straight years of enrollment declines following the Great Recession. Despite this increase, FTE enrollment is still down 7.2% from its peak in 2011.
Enrollment increased in 44 states and Washington, D.C., between 2024 and 2025, ranging from 0.1% in Colorado to 15.4% in Wyoming.
In fiscal year 2025, both four-year and two-year institutions saw enrollment increases, with two-year institutions experiencing higher growth of 5.0% compared to 2.8% among four-year institutions.

From this point forward, all dollar figures are for public institutions and are adjusted for inflation and net FTE enrollment. The Higher Education Cost Adjustment (HECA), a measure of inflation in service industries, increased 3.2% from 2024 to 2025.

Education Appropriations per FTE

Education appropriations measure state and local support for public higher education operating expenses and exclude research, hospitals, and medical education. State-level education appropriations include agency funding and federal stimulus funding; sector-level appropriations do not. After sharp declines during and after the Great Recession, followed by increases for the past 12 consecutive years, education appropriations per FTE decreased 1.0% between 2024 and 2025.

In 2025, education appropriations per FTE decreased 1.0% from 2024 to $12,082. Inflation-adjusted education appropriations per FTE were greater than pre-Great Recession funding levels in 2008 by 9.2%, or $1,020 per FTE, and pre-COVID-19 pandemic funding levels in 2019 by 16.4%, or $1,704 per FTE. These increases in education appropriations per FTE at the national level can be attributed to two notable trends:

Increasing state commitments to higher education funding.
A decline in FTE enrollment.

Education appropriations vary considerably by state. Education appropriations per FTE in 2025 ranged from $4,557 in New Hampshire to $25,468 in Illinois. Consistent with national-level decreases, education appropriations per FTE declined in 31 states and Washington, D.C., between 2024 and 2025. Despite nationally exceeding 2019 levels each year since, education appropriations per FTE remain below 2019 levels in eight states and Washington, D.C., with Wyoming (18.4% below) and Indiana (17.8% below) the farthest from 2019 levels in 2025.

Many states also continue funding higher education at a lower level than prior to the 2008 Great Recession. Twenty-four states have not yet recovered from the Great Recession (meaning their education appropriations per FTE in 2025 remain below 2008 levels). Arizona (47.4% below), Louisiana (37.1% below), and Iowa (29.2% below) are furthest from recovery.

From 2024 to 2025, inflation-adjusted state and local education appropriations decreased 1.8% at two-year institutions, reaching $11,096 per FTE. At four-year institutions, education appropriations per FTE decreased 0.6% from 2024 to 2025, reaching $11,151. There were important differences in the sources of two- and four-year public institution state and local funding, despite similar levels of education appropriations per FTE:

Two-year public institutions received $6,672 per FTE in state general operating appropriations, 69.8% of the four-year general operating appropriation ($9,552 per FTE).
Local appropriations per FTE were 135.0 times higher at two-year institutions ($3,620 per FTE) compared to four-year institutions ($27 per FTE). There were two-year local appropriations in 28 states, compared to only eight for four-year institutions.
Total state and local support at two-year institutions was $11,096, 83.1% of the amount at four-year institutions ($13,349).

State Public Financial Aid per FTE

State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. These funds are included in education appropriations but do not include federal stimulus funding. Public aid accounted for 81.7% of total state financial aid in 2025.

State public financial aid per FTE increased 5.1% from 2024 to 2025 and reached an all-time high of $1,271 per FTE. These funds made up 9.3% of all education appropriations.
In 2025, 26 states and Washington, D.C., had a year-over-year increase in financial aid per FTE. Public state financial aid ranged from $44 per FTE in Montana to $3,662 in New Mexico.
State financial aid awards averaged $780 per FTE at two-year institutions, an increase of 3.7% over 2024. At four-year institutions, state financial aid increased 5.3%, reaching $1,535 per FTE. Most states (34) awarded more financial aid per FTE to students attending four-year institutions.

Net Tuition and Fee Revenue per FTE

Net tuition and fee revenue is the total amount of tuition and fees received by public institutions, minus state and institutional financial aid and medical tuition and fees.

Inflation-adjusted net tuition and fee revenue has increased substantially over time. Since 1980, tuition revenue per FTE at public institutions has increased 165.7%. These increases are primarily due to increases in tuition and fee rates and an increasing proportion of out-of-state, international, and graduate student enrollment.

Recently, this trend has shifted, and tuition and fee revenue has declined in four of the last five years. Public institutions received $7,459 in net tuition and fee revenue per FTE in 2025, down 3.5% from 2024, which is the second-largest one-year decrease since 1980, the start of the SHEF dataset. Decreases in net tuition revenue are largely due to increases in state financial aid and minimal tuition rate growth (lower than the rate of inflation).

Net tuition and fee revenue per FTE ranges widely across the states due to variations in the mix of students paying different tuition rates, the level of state support and availability of state public financial aid, and whether institutions can freely raise their tuition rates.

On the low end, net tuition and fee revenue was $2,288 per FTE in Nevada. On the high end, net tuition and fee revenue was $20,707 per FTE in Delaware.
Net tuition and fee revenue per FTE declined in 37 states and Washington, D.C., between 2024 and 2025. Despite these recent declines, since 1980, net tuition and fee revenue per FTE has increased in every state except Nevada, and by more than 100% in 41 states.
Net tuition and fee revenue at two-year institutions averaged $2,668 per FTE in 2025, down 5.0% from 2024. At four-year institutions, net tuition and fee revenue averaged $10,505 per FTE, down 2.5% from 2024, but still 3.9 times the average net tuition and fee revenue per FTE in the two-year sector.

Total Education Revenue per FTE

Total education revenue is the sum of education appropriations and net tuition and fee revenue, excluding net tuition and fee revenue used for capital debt service.

Total education revenue decreased 1.9% from 2024 to 2025, dropping to $19,443 per FTE. Although 2025 is the fifth-highest national-level total revenue per FTE since the beginning of the SHEF dataset in 1980, this does not indicate that all public institutions have more revenue than ever before. In fact, it is at an all-time high in only four states (Kansas, South Carolina, Virginia, and Washington). Many institutions have not been able to increase tuition and fee revenue to offset declines in state funding, and are not at an all-time high for total education revenue. This is particularly true for those most reliant on state funding and those with a more limited ability to raise tuition rates and attract out-of-state and international students.

As with other measures, total revenue per FTE varied widely by state. Total education revenue per FTE ranged from a low of $12,695 per FTE in Nevada to a high of $33,917 per FTE in Illinois. Total education revenue per FTE decreased in 36 states and Washington, D.C., from 2024 to 2025, and in three states (Alaska, Louisiana, and Nevada) since 1980.

Two-year institutions had, on average, much less total revenue per FTE than four-year institutions. At two-year public institutions, total education revenue averaged $13,722 per FTE in 2025, down 2.6% from 2024. Total education revenue at four-year institutions averaged $21,508, a 1.5% increase from 2024. Due to much higher tuition revenues, four-year institutions had, on average, 1.6 times the amount of total education revenue per FTE of two-year institutions.

Student Share

The student share is a measure of the proportion of total education revenue at public institutions that comes from net tuition and fee revenue.

The student share has increased substantially over time due to declines in education appropriations and net tuition revenue increases. In 1980 (the earliest available data), the student share was 20.9%. In 2025, the U.S. average student share was 38.4%. This means that, on average, 38.4% of revenues at public institutions came from student tuition and fees.

There is a wide variation in the student share across states. In 2025, 18 states had a student share above 50%. From 2024 to 2025, the student share decreased in 26 states and Washington, D.C. These decreases in student share indicate that states are making efforts to address college affordability.

The student share is highly varied when comparing two- and four-year public institutions. At two-year institutions, the fiscal year 2025 student share was less than one-fifth (19.4%), while it was nearly one-half (48.8%) at four-year institutions. The four-year student share is greater than the two-year student share in all but four states: Florida, New York, South Dakota, and Wyoming.

Conclusion

The 2025 SHEF report suggests public higher education funding currently sits at a crossroads. Following more than a decade of increases, the 1.0% decrease in education appropriations per student in FY25 indicates that FY24 may represent a new peak level of funding. Broader demographic, economic, and political trends will impact which road the sector ultimately travels. Yet there are reasons to be both optimistic and concerned about the future of public higher education funding.

Reasons for Optimism

Historical Context. If FY24 does represent a new peak funding level, it will represent the second highest peak in the SHEF dataset, dating back to 1980.
Total Investment Growth. After adjusting for inflation but not FTE enrollment, education appropriations increased 2.6% from $127.4 billion in 2024 to $130.7 billion in 2025.
Enrollment Recovery. The primary reason education appropriations per student experienced a 1.0% decline nationally in 2025 is because the 3.6% increase in enrollment outpaced the increases in education appropriations.
Economic Resilience. The greatest reductions in education appropriations per student are typically associated with recessionary environments, and based on current economic indicators, the national economy grew throughout 2025.

Causes for Concern

Pre-Recession Erosion Risk. A new funding peak outside of an economic downturn can be viewed as cause for concern if the downward trend continues until it rapidly accelerates during a recession.
Fiscal Constraints. The days of slack budgets coming out of the pandemic were short lived, and most states are now projecting minimal year-over-year expenditure increases in the near term.
State-Level Variance. Even though education appropriations per student have exceeded the pre-Great Recession peak at the national level, 24 states allocated less funding per student in 2025 than they did in 2008.
The Demographic Cliff. While FTE enrollment has increased recently, it remains 1.3% below 2019 levels, and broader demographic changes predict fewer traditional-age students over the next decade.

Sources and Uses of State Funding

Two core components of the SHEF report are the sources and uses of state and local investments in higher education. This section presents data on the distribution of state and local funds at the national level over time and across states. Later sections examine trends over time using inflation-adjusted and per-student data.

In considering a state’s investment in higher education, SHEF includes all state and local revenue sources, including those from taxes, lottery receipts, mineral and resource extraction revenue, and state-funded endowments. SHEF also identifies the primary purposes or uses for which this public revenue is provided, including general institutional operating expenses, student financial assistance, agency funding, and support for centrally funded research, medical education, and extension programs. Higher education is the third largest single budget area in state support, representing 8.8% of total state spending and 9.4% of general fund expenditures in fiscal year 2025. Although state higher education expenditures as a share of general fund spending has remained constant since pre-COVID-19 pandemic levels in fiscal year 2019, spending on state higher education as a share of total state expenditures has declined by 1.3 percentage points since that time. 1 1National Association of State Budget Officers. (2025). State expenditure report: Fiscal years 2023-2025. https://www.nasbo.org/reports-data/state-expenditure-report VIEW ALL FOOTNOTES 2 2Unlike 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. VIEW ALL FOOTNOTES Lacking a constitutional mandate or federal funding match like other budget categories, such as K-12 education and Medicaid, it is generally understood that state funding for higher education is one of the most discretionary budget categories and acts as a balance wheel during economic downturns, with funding reductions typically greater than those in other budget areas. 3 3Delaney, J., & Doyle, W. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 36(4). https://www.jstor.org/stable/23018116 VIEW ALL FOOTNOTES Additionally, it is presumed institutions will be able to partially offset funding reductions with tuition revenue increases. During strong budget years, higher education typically sees increased appropriations in most states, both to make up for past cuts and to provide the funding necessary for public institutions to cover increasing costs due to inflation and changes in student enrollment.

Sources of State Funding

This section provides data and analysis of the sources of state and local government support for higher education over the last 15 years (2010-2025). The funding amounts in this section are not adjusted for inflation or enrollment.

1. National Trends

Table 1.1 shows that state and local government funding for higher education totaled $149.2 billion in fiscal year 2025, including $622.2 million in federal stimulus funding. 4 4Federal 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). VIEW ALL FOOTNOTES States contributed $133.9 billion, and local governments in 31 states contributed $15.3 billion, representing increases of 6.7% and 1.5%, respectively. The largest funding source was state tax appropriations, which accounted for $123.5 billion or 82.8% of total funding, as shown in Figure 1.1. Non-tax support (mostly from state lotteries) increased 0.7% and totaled just under $5.8 billion. Non-appropriated support, state-funded endowments, and other sources of state funding contributed an additional $4.1 billion, an increase of 9.8% from 2024.

Table 1.1

Sources of State and Local Higher Education Funding in the U.S., FY 2010-2025 (Unadjusted Dollars, In Millions)

Source	2010	2015	2020	2024	2025	2025 % Distribution
Federal Stimulus	$5,402	$0	$1,457	$624	$622	0.4%
Tax Appropriations	$71,494	$77,911	$90,664	$115,519	$123,469	82.8%
Non-Tax Support	$2,971	$3,297	$4,388	$5,753	$5,793	3.9%
Non-Appropriated Support	$79	$119	$280	$327	$321	0.2%
State-Funded Endowment Earnings	$401	$483	$1,312	$1,633	$1,903	1.3%
Other	$298	$211	$1,557	$1,777	$1,879	1.3%
Funds Not Available for Use	$394	$71	$206	$101	$75	0.1%
Total State Support	$80,252	$81,950	$99,452	$125,532	$133,913	89.8%
Local Tax Appropriations	$8,837	$9,217	$12,300	$15,047	$15,269	10.2%
Total State and Local Support	$89,089	$91,167	$111,752	$140,580	$149,182	100.0%
Total State and Local Support (No Stimulus)	$83,687	$91,167	$110,295	$139,956	$148,560	99.6%

Notes:

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 provided directly to institutions (such as HEERF) and funding used for capital projects.
Other includes multiyear appropriations from previous years and funds not classified in one of the other source categories.
Funds not available for use include appropriations that were returned to the state, and portions of multiyear appropriations to be spread over other years.
Total state and local support is the sum of federal stimulus funds, state and local tax appropriations, non-tax support, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use.

Source(s):

State Higher Education Executive Officers Association

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Figure 1.1

Distribution of State and Local Higher Education Funding Sources, U.S., FY 2010-2025

Notes:

In some cases, percentages may add up to more than 100 due to funds not available for use. Funds not available for use are appropriations that were returned to the state and portions of multiyear appropriations to be spread over other years.
Tax appropriations are any appropriations from state government taxes to institutions for operations and other higher education activities.
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 provided directly to institutions (such as HEERF) and funding used for capital projects.
Local appropriations are the sum of tax appropriations from any government entity below the state level to public institutions for operating expenses. Local appropriations do not include grants from local nonprofit organizations such as chambers of commerce and charitable foundations.
Non-tax support includes any appropriated non-tax state support set aside by the state for higher education. This may include, but is not limited to, allocations from lotteries (including lottery scholarships), tobacco settlements, casinos, or other gaming sources.
In all years, state-funded endowment earnings and other sources accounted for 3% or less of total state and local funding for higher education. Other sources include non-appropriated funds, multiyear appropriations from previous years, and funds not classified in one of the other source categories.

Source(s):

State Higher Education Executive Officers Association

2. State Comparisons

Almost all states are heavily reliant on state tax appropriations to fund higher education, although the distribution of state and local higher education funding sources varies across the nation (see Table 1.2 and Figure 1.2). In 2025, the largest percentage of higher education funding across states came from state tax appropriations. Five states (Delaware, Massachusetts, Minnesota, North Dakota, and Washington) relied on tax appropriations as their only source of state and local funding for higher education.

Arizona is the only state in which a large proportion (45.2%) of higher education funding came from local appropriations. California, Kansas, Michigan, New Mexico, Oregon, and Texas were the only other states that relied on local appropriations for at least 15% of higher education funding. Nineteen states and Washington, D.C., received no local tax appropriations for higher education. 5 5In Washington D.C., district taxes are classified as state tax appropriations, not local support. VIEW ALL FOOTNOTES

Table 1.2

Sources of State and Local Higher Education Funding by State, FY 2025 (Unadjusted Dollars)

	% Tax Appropriations	% Non-Tax Support	% Funds Not Available for Use (Subtracted)	% Local Appropriations	% Endowment, Non-Appropriated, and Other Sources	% Federal Stimulus	Total State and Local Support (Thousands)
Alabama	99.9%	0.0%	0.0%	0.1%	0.0%	0.0%	$2,609,863
Alaska	101.4%	0.0%	1.6%	0.2%	0.0%	0.0%	$366,990
Arizona	45.5%	0.3%	0.0%	45.2%	8.4%	0.6%	$2,343,778
Arkansas	84.9%	11.4%	0.0%	3.7%	0.1%	0.0%	$1,161,579
California	82.0%	2.0%	0.0%	16.0%	0.0%	0.0%	$26,449,341
Colorado	85.7%	3.1%	0.0%	11.2%	0.0%	0.0%	$1,769,838
Connecticut	80.8%	0.0%	0.0%	0.0%	3.6%	15.6%	$1,827,747
Delaware	100.0%	0.0%	0.0%	0.0%	0.0%	0.0%	$308,182
Florida	75.9%	21.3%	0.0%	0.5%	2.3%	0.0%	$7,741,918
Georgia	78.5%	20.0%	0.0%	0.0%	1.5%	0.0%	$5,048,488
Hawaii	100.0%	0.9%	1.1%	0.0%	0.3%	0.0%	$927,783
Idaho	90.4%	0.0%	0.0%	5.2%	3.3%	1.1%	$721,676
Illinois	86.9%	0.0%	0.0%	13.0%	0.0%	0.0%	$6,923,067
Indiana	98.3%	0.5%	0.0%	0.0%	1.1%	0.1%	$2,071,621
Iowa	95.5%	0.0%	0.0%	4.5%	0.0%	0.0%	$964,893
Kansas	71.4%	0.7%	0.0%	18.9%	0.0%	9.0%	$1,852,280
Kentucky	70.2%	27.1%	0.0%	2.5%	0.1%	0.1%	$1,651,856
Louisiana	98.7%	0.0%	0.0%	0.0%	1.3%	0.0%	$1,593,826
Maine	95.0%	1.8%	0.0%	0.0%	0.3%	2.8%	$420,109
Maryland	87.9%	0.3%	0.0%	11.9%	0.0%	0.0%	$4,258,015
Massachusetts	100.0%	0.0%	0.0%	0.0%	0.0%	0.0%	$2,741,800
Michigan	78.7%	0.0%	0.0%	21.3%	0.0%	0.0%	$3,455,166
Minnesota	100.0%	0.0%	0.0%	0.0%	0.0%	0.0%	$2,099,959
Mississippi	93.1%	0.0%	0.0%	6.7%	0.1%	0.0%	$1,274,876
Missouri	80.1%	6.0%	2.4%	14.8%	0.5%	1.0%	$1,582,978
Montana	93.6%	0.0%	0.0%	2.9%	3.4%	0.0%	$337,663
Nebraska	96.7%	3.3%	0.0%	0.0%	0.0%	0.0%	$1,198,117
Nevada	86.4%	13.6%	0.0%	0.1%	0.0%	0.0%	$1,034,899
New Hampshire	94.1%	4.7%	0.0%	0.0%	0.0%	1.2%	$177,850
New Jersey	88.6%	3.7%	0.0%	7.7%	0.0%	0.1%	$3,482,612
New Mexico	63.5%	14.1%	0.0%	19.3%	1.0%	2.2%	$1,834,607
New York	85.8%	0.0%	0.0%	14.2%	0.0%	0.0%	$8,482,318
North Carolina	93.4%	0.8%	0.3%	5.5%	0.3%	0.4%	$5,923,107
North Dakota	100.0%	0.0%	0.0%	0.0%	0.0%	0.0%	$470,036
Ohio	92.1%	0.0%	0.0%	7.9%	0.0%	0.0%	$2,922,192
Oklahoma	80.0%	2.2%	0.0%	5.5%	11.2%	1.1%	$1,244,764
Oregon	83.7%	0.6%	0.0%	15.7%	0.0%	0.0%	$1,544,947
Pennsylvania	93.0%	0.0%	0.0%	7.0%	0.0%	0.0%	$2,424,002
Rhode Island	99.3%	0.0%	0.0%	0.0%	0.0%	0.7%	$268,914
South Carolina	67.8%	26.8%	0.0%	5.4%	0.0%	0.0%	$2,097,491
South Dakota	98.1%	1.4%	0.3%	0.0%	0.8%	0.0%	$369,670
Tennessee	79.9%	15.9%	0.0%	0.0%	4.2%	0.0%	$2,904,564
Texas	62.3%	0.4%	0.0%	19.6%	17.7%	0.0%	$17,597,960
Utah	99.6%	0.4%	0.0%	0.0%	0.0%	0.0%	$1,815,125
Vermont	98.3%	0.0%	0.5%	0.0%	0.4%	1.8%	$153,146
Virginia	99.5%	0.0%	0.0%	0.5%	0.0%	0.0%	$4,110,564
Washington	100.0%	0.0%	0.0%	0.0%	0.0%	0.0%	$3,327,143
West Virginia	85.6%	6.3%	0.0%	0.0%	8.1%	0.0%	$642,002
Wisconsin	86.5%	0.0%	0.0%	12.4%	0.0%	1.1%	$2,179,664
Wyoming	86.3%	0.0%	0.0%	9.2%	4.1%	0.4%	$471,336
D.C.	96.9%	0.0%	0.0%	0.0%	3.1%	0.0%	$105,459
U.S.	82.8%	3.9%	0.1%	10.2%	2.8%	0.4%	$149,182,323

Notes:

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 provided directly to institutions (such as HEERF) and funding used for capital projects.
Total state and local support is the sum of federal stimulus funds, state and local tax appropriations, non-tax support, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use. Some states reported tax appropriations and non-tax support that total to more than 100% of total state support because those data elements include funds not available for use, which are reported in the fourth column.
Funds not available for use include appropriations that were returned to the state, and portions of multiyear appropriations to be spread over other years.
In addition to non-appropriated support and state-funded endowment earnings, other sources include multiyear appropriations from previous years and funds not classified in one of the other source categories.
In fiscal year 2025, Nebraska changed how community colleges receive funding. Previously, community colleges levied property taxes directly, reported as local appropriations. They now receive support from the state, reported as tax appropriations. See the Nebraska State Spotlight for more details.

Source(s):

State Higher Education Executive Officers Association

Figure 1.2

Percentage of State and Local Higher Education Funding from Local Appropriations by State, FY 2025

Notes:

Excludes states with no selected funding source.
Total state and local support is the sum of federal stimulus funds, state and local tax appropriations, non-tax support, non-appropriated support, state-funded endowment earnings, and other state funds, net of any funds not available for use.
Tax appropriations are any appropriations from state government taxes to institutions for operations and other higher education activities.
Local appropriations are the sum of tax appropriations from any government entity below the state level to public institutions for operating expenses. Local appropriations do not include grants from local nonprofit organizations such as chambers of commerce and charitable foundations.
Non-tax support includes any appropriated non-tax state support set aside by the state for higher education. This may include, but is not limited to, allocations from lotteries (including lottery scholarships), tobacco settlements, casinos, or other gaming sources.

Source(s):

State Higher Education Executive Officers Association

Several states with financial aid programs funded with lottery dollars, primarily located in the southern region of the U.S., were also less reliant on tax appropriations. Florida, Georgia, Kentucky, South Carolina, and Tennessee relied on non-tax support for greater than 15% of higher education funding. Meanwhile, 23 states and Washington, D.C., had no non-tax support.

Endowments, non-appropriated support, and other sources of state revenue made up 1% or less of higher education funding in all but 13 states and Washington, D.C. In Arizona, Oklahoma, Texas, and West Virginia, these revenue sources made up more than 5% of higher education support.

In 2025, federal stimulus funding provided to state governments was used for higher education in 19 states. Of these states, stimulus funds comprised less than 3% of total state and local support in 17 states. Connecticut and Kansas are the only states that relied on federal stimulus funding for more than 3% of higher education funding in 2025.

Two noteworthy trends have emerged as states have become less reliant on tax appropriations over time.

Many states are increasingly reliant on local appropriations. Over the last 15 years, the proportion of total higher education funding from local appropriations has increased in 17 states. In two states (Arizona and New Mexico), the proportion of total higher education funding derived from local appropriations has increased by at least 7 percentage points since 2010.
Similarly, 15 states had increases in the proportion of higher education funding from non-tax appropriations between 2010 and 2025. In three states (Arkansas, Kentucky, and South Carolina), all of which have sizable lottery-funded student financial aid programs, 6 6Brown, 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 VIEW ALL FOOTNOTES non-tax support as a proportion of total funding increased by more than 5 percentage points over the last 15 years.

Uses of State Funding

This section provides data and analysis of the uses of state and local government support for higher education over the last 15 years (2010-2025). As with the prior section, this section’s funding amounts are not adjusted for inflation or enrollment. However, unlike the prior section, federal stimulus funding is not included in the uses of state and local funding.

1. National Trends

Table 1.3 shows that, nationally, funds allocated to support general public operations at public institutions increased 5.2% in 2025 to $116.3 billion, representing 78.3% of state and local higher education funding. General public operations include funding directly used to support instruction at two- and four-year public institutions as well as funding to state higher education agencies.

Agency funding is the allocation of operating funds to state-level coordinating and governing bodies. 7 7These funds have always been included in general public operations but were not available as a breakout until 2019. VIEW ALL FOOTNOTES In 2025, states provided $1.7 billion in agency funding (1.2% of all general public operations).

Other uses of funding include:

Special purpose appropriations for research, agricultural extension programs, public health care services, and medical education (RAM) have increased 8.0% since 2024 to $14.6 billion — comprising 9.8% of total state and local support.
State-funded student financial aid increased 11.5% to $16.8 billion — 11.3% of total support — from 2024 to 2025. In 2025, 81.7% of total student aid was allocated to students attending public institutions.
Operating support for independent (private) institutions remained flat at $357.7 million, and support for non-credit and continuing education increased 12.4% to $455.1 million. Together, these uses of state and local funding constituted 0.5% of higher education funding.

Table 1.3

Uses of State and Local Higher Education Funding in the U.S., FY 2010-2025 (Unadjusted Dollars, In Millions)

Use	2010	2015	2020	2024	2025	2025 % Distribution
General Public Operations	$64,460	$70,800	$86,845	$110,613	$116,345	78.3%
Agency Funding	N/A	N/A	$1,174	$1,834	$1,738	1.2%
Research - Agriculture - Medical (RAM)	$9,953	$9,775	$11,041	$13,490	$14,573	9.8%
State Public Financial Aid	$6,349	$7,729	$9,426	$12,235	$13,750	9.3%
Out-of-State Financial Aid	$44	$41	$38	$48	$45	0.0%
Independent Student Aid	$2,362	$2,248	$2,313	$2,767	$2,986	2.0%
Independent Operating Support	$210	$210	$228	$358	$358	0.2%
Non-Credit and Continuing Education	$308	$363	$375	$405	$455	0.3%
Total Student Financial Aid	$8,756	$10,019	$11,807	$15,090	$16,829	11.3%
Total Independent Support	$2,572	$2,458	$2,542	$3,124	$3,344	2.3%
Total State and Local Support (No Stimulus)	$83,687	$91,167	$110,295	$139,956	$148,560	100.0%

Notes:

General public operations are any state and local support for public higher education institutions and agencies, excluding RAM, financial aid, and non-credit and continuing education. Federal stimulus funding is not included.
Agency funding is included in general public operations, and is the allocation of operating funds to state-funded, state-level coordinating and governing bodies.
RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans. Financial aid for students attending medical institutions is included in total student financial aid but excluded from all other student aid categories.
Total independent support is the sum of state funds for private institutions (independent student aid and independent operating support).
Total state and local support is the sum of 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.

Source(s):

State Higher Education Executive Officers Association

Overall, the uses of state and local higher education funding have remained relatively constant on a national level over time. Figure 1.3 shows that the two biggest changes in uses of higher education funding are the proportions of funding allocated RAM and to public financial aid. Excluding stimulus funding, the proportion of state and local funding allocated to RAM decreased 2.1 percentage points from 11.9% in 2010 to 9.8% in 2025. In contrast, the proportion of funding allocated to public financial aid increased 1.7 percentage points from 7.6% in 2010 to 9.3% in 2025. Meanwhile, the proportion allocated to general public operating increased by 1.3 percentage points over the last 15 years. Financial aid to students attending independent or out-of-state institutions declined by just under one percentage point (0.8) over that same time frame and now accounts for just 2.0% of state and local support, suggesting increases in financial aid have primarily benefited students attending in-state public institutions.

Figure 1.3

Distribution of State and Local Higher Education Funding Uses, U.S., FY 2010-2025

Notes:

In all years, other uses accounted for less than 1% of total state and local funding for higher education. Other uses include funding for non-credit and independent operating.
Total state and local support is the sum of 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.
General public operations are any state and local support for public higher education institutions and agencies, excluding RAM, financial aid, and non-credit and continuing education. Federal stimulus funding is not included.
RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
Other financial aid includes any state appropriated student financial aid to students attending independent (private) or out-of-state institutions.
State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. Aid for students attending medical schools is excluded starting in fiscal year 2019. For many states, it includes aid for both tuition costs and living expenses. In several states, financial aid may include unawarded funds that were reverted back to the state.

Source(s):

State Higher Education Executive Officers Association

2. State Comparisons

Across the states, there is significant variation in the uses of state and local funding for higher education. All states and Washington, D.C., with the exception of West Virginia, allocated at least one-half of all funding to general public operations in fiscal year 2025. West Virginia (49.6%) allocated the smallest proportion of funding to public institutions’ general operations budgets, while Washington, D.C., and Rhode Island (both 92.5%) allocated the largest. Overall, the proportion of funding allocated to general public operations increased in half of states since 2010.

Forty-six states reported agency funding in fiscal year 2025. Agency allocations ranged from 0.02% of all support in Montana to 18.0% in Idaho and accounted for less than 1% of all support in 26 of those states. States may not have agency funding if they do not have a statewide board for higher education (like in Michigan), or if systems of institutions allocate their own funding for system-level agency operations from their general budgets (as in Maine).

All but one state (Rhode Island) 8 8Rhode Island has not reported any RAM allocations since the start of the SHEF dataset. VIEW ALL FOOTNOTES provided state and local support for direct operations of research, agriculture, public health care services, and medical schools (RAM). In 2025, RAM ranged from 2.6% in Washington to 26.1% in Mississippi.

Figure 1.4

Percentage of State and Local Higher Education Funding Used for Research - Agriculture - Medical (RAM) by State, FY 2025

Notes:

Excludes states with no selected funding use.
Total state and local support is the sum of 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.
General public operations are any state and local support for public higher education institutions and agencies, excluding RAM, financial aid, and non-credit and continuing education. Federal stimulus funding is not included.
RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans.

Source(s):

State Higher Education Executive Officers Association

The proportion of state and local support allocated to student financial aid ranged from 0.5% in Montana to 27.5% in Kentucky. No other state allocated less than 1% of funding to student financial aid. Only Kentucky and South Carolina allocated greater than 25% of state and local funding to financial aid. From 2010 to 2025, the proportion of total state and local support appropriated to student financial aid increased in 35 states.

As seen in Table 1.4, support for independent institutions is generally one of the smallest allocations of state and local funding. In 2025, 45 states provided funding to independent institutions, ranging from 0.005% in New Mexico to 12.0% in Pennsylvania. In most states, funding for independent institutions was predominantly allocated to student financial aid rather than institutional operating appropriations. Fifteen states allocated some portion of funding to support independent (private) operating. Of those states, only two, Alabama (64.1%) and Maryland (68.7%), allocated more than 50% of their support for independent institutions toward institutional operating.

Table 1.4

Uses of State and Local Higher Education Funding by State, FY 2025 (Unadjusted Dollars)

	% General Public Operations	% Agency Funding	% Research - Agriculture - Medical (RAM)	% Total Student Financial Aid	% Total Independent Support	Total State and Local Support (No Stimulus, in Thousands)
Alabama	79.3%	0.8%	16.1%	3.1%	1.5%	$2,609,863
Alaska	86.6%	0.0%	6.4%	7.0%	0.5%	$366,990
Arizona	85.5%	0.1%	10.4%	4.1%	0.0%	$2,328,778
Arkansas	66.8%	0.3%	20.2%	13.0%	1.5%	$1,161,579
California	84.4%	0.1%	5.5%	10.1%	0.8%	$26,449,341
Colorado	71.6%	0.5%	11.7%	16.7%	0.7%	$1,769,838
Connecticut	74.6%	4.8%	21.5%	3.9%	0.0%	$1,542,515
Delaware	88.9%	0.1%	3.4%	7.7%	0.1%	$308,182
Florida	77.6%	0.2%	7.5%	14.0%	3.5%	$7,741,918
Georgia	69.0%	3.5%	10.0%	20.4%	2.1%	$5,048,488
Hawaii	82.8%	8.2%	16.1%	1.1%	0.0%	$927,651
Idaho	86.7%	18.0%	9.9%	3.3%	0.6%	$713,899
Illinois	86.4%	2.8%	2.7%	10.1%	4.0%	$6,920,010
Indiana	65.2%	0.6%	14.1%	20.5%	6.4%	$2,070,150
Iowa	76.3%	0.1%	13.2%	10.5%	5.7%	$964,893
Kansas	76.4%	0.4%	16.9%	6.1%	1.8%	$1,685,427
Kentucky	62.8%	0.9%	8.6%	27.5%	8.1%	$1,649,844
Louisiana	52.3%	6.3%	24.4%	23.3%	2.1%	$1,593,826
Maine	79.5%	0.0%	9.5%	11.0%	1.2%	$408,309
Maryland	84.3%	0.2%	10.1%	3.9%	2.5%	$4,258,015
Massachusetts	82.6%	0.4%	3.0%	14.2%	2.3%	$2,741,800
Michigan	80.5%	0.0%	5.7%	13.8%	2.6%	$3,455,166
Minnesota	74.0%	4.4%	10.1%	15.7%	4.0%	$2,099,959
Mississippi	70.1%	1.3%	26.1%	3.8%	0.3%	$1,274,876
Missouri	74.9%	0.3%	14.1%	11.0%	2.4%	$1,567,379
Montana	84.8%	0.0%	14.8%	0.5%	0.0%	$337,663
Nebraska	77.7%	0.1%	18.1%	4.2%	0.8%	$1,198,117
Nevada	73.5%	3.7%	13.0%	13.6%	0.0%	$1,034,899
New Hampshire	83.9%	0.3%	8.0%	8.1%	0.4%	$175,682
New Jersey	66.8%	0.2%	10.1%	22.8%	4.5%	$3,479,112
New Mexico	72.6%	0.3%	12.7%	14.4%	0.0%	$1,794,507
New York	84.7%	1.0%	4.8%	10.3%	3.1%	$8,482,318
North Carolina	80.6%	1.3%	11.1%	5.0%	1.6%	$5,899,994
North Dakota	71.6%	9.2%	22.3%	5.5%	1.6%	$470,036
Ohio	79.5%	1.0%	8.3%	10.8%	3.3%	$2,922,192
Oklahoma	72.9%	0.8%	13.0%	14.2%	1.4%	$1,231,416
Oregon	71.9%	1.4%	11.0%	13.0%	1.2%	$1,544,947
Pennsylvania	71.1%	0.3%	3.8%	23.7%	12.0%	$2,424,002
Rhode Island	92.5%	1.7%	0.0%	7.5%	0.7%	$267,045
South Carolina	62.8%	1.9%	11.7%	25.1%	6.6%	$2,097,491
South Dakota	82.8%	11.9%	15.0%	2.2%	0.4%	$369,670
Tennessee	64.1%	2.4%	15.9%	19.8%	3.5%	$2,904,564
Texas	79.7%	0.3%	15.5%	4.9%	0.6%	$17,597,960
Utah	90.4%	0.9%	7.2%	2.0%	0.4%	$1,815,125
Vermont	68.6%	0.0%	14.3%	16.9%	2.3%	$150,347
Virginia	67.9%	0.2%	9.9%	20.2%	4.3%	$4,110,564
Washington	80.2%	1.5%	2.6%	17.2%	2.5%	$3,327,143
West Virginia	49.6%	1.6%	25.8%	23.3%	1.2%	$642,002
Wisconsin	81.9%	5.4%	10.4%	7.2%	2.0%	$2,155,438
Wyoming	81.0%	0.9%	12.4%	6.5%	0.0%	$469,226
D.C.	92.5%	0.0%	4.4%	3.1%	0.0%	$105,459
U.S.	78.3%	1.2%	9.8%	11.3%	2.3%	$148,560,158

Notes:

Percentages do not add up to 100 because (a) this table does not include funds allocated to non-credit and continuing education, and (b) state financial aid to independent institutions is included in both total student financial aid and total independent support.
General public operations are any state and local support for public higher education institutions and agencies, excluding RAM, financial aid, and non-credit and continuing education. Federal stimulus funding is not included.
Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans. Financial aid for students attending medical institutions is included in total student financial aid.
Total independent support is the sum of state funds for private institutions (independent student aid and independent operating support).
Total state and local support is the sum of 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.
Fiscal year 2025 total state financial aid includes estimated public financial aid for Nevada and Pennsylvania and missing medical public aid for Pennsylvania and Wisconsin due to data availability.
Fiscal year 2025 uncategorizable state support includes estimates for South Carolina and South Dakota.
In California, state funds used for nontuition financial aid are classified as uncategorizable state support, which is included in state-level general public operations.

Source(s):

State Higher Education Executive Officers Association

Distribution of Revenue

WAVE CHARTS AND STUDENT SHARE

This section explores historical trends in the distribution and levels of the two primary revenue sources for public institutions of higher education: state and local funding and student tuition and fee revenue. From this section forward, the SHEF report highlights trends in higher education revenue and enrollment for public institutions only.

Several derived metrics are analyzed throughout the report, first at the U.S. level and then across states and sectors. 9 9It 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. VIEW ALL FOOTNOTES These metrics are net full-time equivalent (FTE) enrollment, general public operations, state public financial aid, education appropriations, net tuition and fee revenue, total education revenue, and student share. Each metric is defined in Table 2.1 and explained in more detail in the sections that follow.

SHEF’s analytic methods are designed to make basic data about higher education finance as comparable as possible across states and over time. Finance metrics are provided on a per-student basis (using net FTE enrollment) and are modified using three adjustments: 10 10These adjustments are described in more detail on the data definitions page of the SHEF website (https://shef.sheeo.org/data-definitions/). VIEW ALL FOOTNOTES

Higher Education Cost Adjustment (HECA)
adjusts for inflation over time.

Cost of Living Index (COLI)
accounts for cost of living differences among the states.

Enrollment Mix Index (EMI)
adjusts for differences in the mix of enrollments across institutions resulting in different costs across the states (e.g., at community colleges or more expensive research institutions).

Trends Over Time

1. National Trends

Table 2.1 shows the effects of FTE enrollment and inflation on the SHEF metrics. The progression shown in this table is a starting point for understanding the national story of public higher education funding from state and local sources, tuition and fee revenue from students and families, and enrollment over time. Note that the state adjustments (COLI and EMI) do not impact the U.S. average.

The first section of Table 2.1 shows that in unadjusted dollars (without adjusting for inflation or enrollment), education appropriations increased 5.9% over 2024. Both subcomponents of education appropriations also increased, 12.4% for state public financial aid and 5.2% for general public operations. Net tuition and fee revenue (tuition and fees net of state and institutional aid and medical tuition) increased 3.2%.

The middle section of Table 2.1 shows that the Higher Education Cost Adjustment (HECA), a measure of inflation in service industries, increased 3.2% from 2024 to 2025. After applying HECA and accounting for inflation, state public financial aid increased 8.9%, while general public operations increased 1.9%, and net tuition and fee revenue remained flat, increasing just 0.03%.

The changes described above may be misleading if not contextualized with changes in net FTE enrollment, shown in the final section of Table 2.1. From 2024 to 2025, enrollment increased 3.6%, or 378,895 FTE students. After adjusting for both inflation and enrollment, we see that education appropriations decreased 1.0% (financial aid increased 5.1%, general public operations decreased 1.7%), while net tuition and fee revenue decreased 3.5%, and total education revenue decreased 1.9%.

Since the SHEF dataset began in 1980, net tuition revenue per FTE has only declined seven times: in 2000 (2.7%), 2001 (0.8%), 2019 (3.0%), 2021 (2.0%), 2023 (2.8%), 2024 (4.1%), and 2025 (3.5%). The decline in 2025, the second-largest after 2024, is partially explained by state public financial aid increases, which are removed from net tuition revenue, and increases in FTE enrollment.

Measurement Note: Federal Stimulus Funding

The SHEF report includes federal stimulus funding allocated to states to stabilize state and local sources of funding for higher education and to provide additional resources during the COVID-19 pandemic in fiscal years 2020-2025. Federal stimulus included in the SHEF report includes any state-allocated Governor’s Emergency Education Relief Funds (GEERF), Coronavirus Relief Funds (CRF), or State and Local Fiscal Recovery Funds, and excludes aid provided directly to institutions (such as Higher Education Emergency Relief Funds). Federal stimulus funds used for public capital projects are also excluded. Federal stimulus funds were generally reported in the year(s) in which they were expended. State- and sector-level state and local support, education appropriations, and total education revenue include federal stimulus funding. Federal stimulus funding for private institution operations is excluded from education appropriations and total education revenue. Federal stimulus is not included in state public financial aid, general public operations, or state public operating.

Table 2.1

Impact of Inflation and Enrollment on SHEF Metrics, U.S., FY 1980-2025

	1980	2001	2015	2020	2024	2025	% Change Since 2024	% Change Since 2020	% Change Since 2015	% Change Since 2001	% Change Since 1980
Current Unadjusted Dollars (Millions)
State Public Financial Aid	N/A	$2,843	$7,729	$9,426	$12,235	$13,750	12.4%	45.9%	77.9%	383.6%	N/A
General Public Operations	N/A	$53,289	$70,800	$86,845	$110,613	$116,345	5.2%	34.0%	64.3%	118.3%	N/A
Education Appropriations	$16,134	$56,118	$78,530	$97,646	$123,463	$130,714	5.9%	33.9%	66.5%	132.9%	710.2%
Net Tuition Revenue	$4,264	$22,896	$67,662	$76,425	$78,170	$80,698	3.2%	5.6%	19.3%	252.4%	1792.6%
Total Education Revenue	$20,398	$78,903	$145,377	$173,115	$200,574	$210,354	4.9%	21.5%	44.7%	166.6%	931.3%
Constant Inflation Adjusted Dollars (Millions)
HECA	0.2216	0.5295	0.7491	0.8303	0.9689	1.0000	3.2%	20.4%	33.5%	88.9%	351.2%
State Public Financial Aid	N/A	$5,369	$10,318	$11,352	$12,628	$13,750	8.9%	21.1%	33.3%	156.1%	N/A
General Public Operations	N/A	$100,639	$94,519	$104,593	$114,160	$116,345	1.9%	11.2%	23.1%	15.6%	N/A
Education Appropriations	$72,795	$105,982	$104,839	$117,602	$127,422	$130,714	2.6%	11.1%	24.7%	23.3%	79.6%
Net Tuition Revenue	$19,238	$43,241	$90,330	$92,043	$80,677	$80,698	0.0%	-12.3%	-10.7%	86.6%	319.5%
Total Education Revenue	$92,033	$149,011	$194,080	$208,493	$207,007	$210,354	1.6%	0.9%	8.4%	41.2%	128.6%
Constant Inflation Adjusted Dollars (per FTE)
FTE Enrollment	6,852,242	8,709,255	11,125,406	10,888,462	10,440,184	10,819,079	3.6%	-0.6%	-2.8%	24.2%	57.9%
State Public Financial Aid	N/A	$616	$927	$1,043	$1,210	$1,271	5.1%	21.9%	37.0%	106.2%	N/A
General Public Operations	N/A	$11,555	$8,496	$9,606	$10,935	$10,754	-1.7%	11.9%	26.6%	-6.9%	N/A
Education Appropriations	$10,624	$12,169	$9,423	$10,801	$12,205	$12,082	-1.0%	11.9%	28.2%	-0.7%	13.7%
Net Tuition Revenue	$2,808	$4,965	$8,119	$8,453	$7,728	$7,459	-3.5%	-11.8%	-8.1%	50.2%	165.7%
Total Education Revenue	$13,431	$17,109	$17,445	$19,148	$19,828	$19,443	-1.9%	1.5%	11.5%	13.6%	44.8%

Notes:

Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
State public financial aid is the part of education appropriations used for student financial aid at public institutions, excluding loans. Aid for students attending medical schools is excluded starting in fiscal year 2019.
General public operations are any state and local support for public higher education institutions and agencies, excluding RAM, financial aid, and non-credit and continuing education. Federal stimulus funding is not included.
Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
Total education revenue is the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service. Total education revenue includes federal stimulus funding.
The years 1980 and 2001 are included in this table because they are the starting points of the historical SHEF dataset and modern SHEF data collection, respectively.
The Higher Education Cost Adjustment (HECA) estimates inflation in the costs paid by colleges and universities. HECA adjusts for inflation from the state perspective.

Source(s):

State Higher Education Executive Officers Association

2. Sector Trends

Modeled after the previous section, Table 2.1A shows the impacts of inflation and enrollment on sector-level revenue at public institutions beginning in 2019.

Sector-level education appropriations consist of state public financial aid, state public operating appropriations, and local appropriations. In unadjusted dollars, between 2024 and 2025, total education appropriations increased 6.5% at two-year institutions and 5.4% at four-year institutions. Four-year institutions also receive research, agriculture, and medical (RAM) appropriations, which increased 8.0% from 2024. In unadjusted dollars, net tuition and fee revenue increased 3.0% at two-year institutions and 3.4% at four-year institutions.

The second section of Table 2.1A shows that from 2024 to 2025, higher education inflation was 3.2%. After adjusting for inflation, all components of state support to two-year institutions increased between 3.2% and 8.9%, with the exceptions of local appropriations (which decreased by 1.7%) and net tuition revenue (decrease of 0.2%). At four-year institutions, most components of state support increased between 0.2% and 8.2% after adjusting for inflation, while local appropriations decreased by 1.5%.

Net FTE enrollment increased 5.0% at two-year institutions and 2.8% at four-year institutions between 2024 and 2025. After considering changes in net FTE enrollment in the third section of the table, we see that in constant inflation-adjusted dollars per FTE enrollment:

State public financial aid per FTE increased by $28 (3.7%) at two-year institutions, and $78 (5.3%) at four-year institutions.
State public operating per FTE increased by $25 (0.4%) at two-year institutions and decreased by $143 (1.5%) at four-year institutions.
Local appropriations per FTE decreased by $247 (6.4%) at two-year institutions and just over $1 (4.1%) at four-year institutions.
Research, agricultural extension, and medical (RAM) appropriations, only available to four-year institutions, increased by $40 (1.9%) per FTE.
Total state and local support per FTE decreased by $199 (1.8%) at two-year institutions and $29 (0.2%) at four-year institutions.
Net tuition revenue per FTE declined by $141 (5.0%) at two-year institutions and $271 (2.5%) at four-year institutions.
Total education revenue per FTE decreased by $360 (2.6%) at two-year institutions and $333 (1.5%) at four-year institutions.

Additional analysis of sector-level trends on these metrics can be found throughout the remainder of the SHEF report.

Table 2.1A

Impact of Inflation and Enrollment on SHEF Metrics by Sector, U.S., FY 2019-2025

	Two-Year					Four-Year
	2019	2024	2025	% Change Since 2024	% Change Since 2019	2019	2024	2025	% Change Since 2024	% Change Since 2019
Current Unadjusted Dollars (Millions)
State Public Financial Aid	$2,360	$2,893	$3,251	12.4%	37.8%	$6,497	$9,140	$10,211	11.7%	57.2%
State Public Operating	$20,461	$25,559	$27,812	8.8%	35.9%	$46,401	$60,791	$63,527	4.5%	36.9%
Local Appropriations	$11,636	$14,872	$15,091	1.5%	29.7%	$150	$175	$178	1.7%	19.3%
RAM	$0	$0	$0	N/A	N/A	$10,509	$13,490	$14,573	8.0%	38.7%
State and Local Support	$34,458	$43,431	$46,252	6.5%	34.2%	$63,588	$83,884	$88,782	5.8%	39.6%
Education Appropriations	$34,458	$43,431	$46,252	6.5%	34.2%	$53,048	$70,354	$74,161	5.4%	39.8%
Net Tuition Revenue	$11,826	$10,802	$11,122	3.0%	-6.0%	$63,668	$67,570	$69,864	3.4%	9.7%
Total Education Revenue	$46,189	$54,150	$57,200	5.6%	23.8%	$115,906	$136,947	$143,038	4.4%	23.4%
Constant Inflation Adjusted Dollars (Millions)
HECA	0.8153	0.9689	1.0000	3.2%	22.6%	0.8153	0.9689	1.0000	3.2%	22.6%
State Public Financial Aid	$2,894	$2,986	$3,251	8.9%	12.3%	$7,968	$9,434	$10,211	8.2%	28.1%
State Public Operating	$25,095	$26,379	$27,812	5.4%	10.8%	$56,910	$62,741	$63,527	1.3%	11.6%
Local Appropriations	$14,272	$15,349	$15,091	-1.7%	5.7%	$183	$181	$178	-1.5%	-2.7%
RAM	$0	$0	$0	N/A	N/A	$12,889	$13,923	$14,573	4.7%	13.1%
State and Local Support	$42,261	$44,824	$46,252	3.2%	9.4%	$77,989	$86,575	$88,782	2.5%	13.8%
Education Appropriations	$42,261	$44,824	$46,252	3.2%	9.4%	$65,062	$72,610	$74,161	2.1%	14.0%
Net Tuition Revenue	$14,504	$11,148	$11,122	-0.2%	-23.3%	$78,087	$69,737	$69,864	0.2%	-10.5%
Total Education Revenue	$56,650	$55,887	$57,200	2.4%	1.0%	$142,156	$141,340	$143,038	1.2%	0.6%
Constant Inflation Adjusted Dollars (per FTE)
FTE Enrollment	4,365,167	3,968,768	4,168,498	5.0%	-4.5%	6,594,759	6,471,415	6,650,586	2.8%	0.8%
State Public Financial Aid	$663	$752	$780	3.7%	17.6%	$1,208	$1,458	$1,535	5.3%	27.1%
State Public Operating	$5,749	$6,647	$6,672	0.4%	16.1%	$8,630	$9,695	$9,552	-1.5%	10.7%
Local Appropriations	$3,269	$3,867	$3,620	-6.4%	10.7%	$28	$28	$27	-4.1%	-3.5%
RAM	$0	$0	$0	N/A	N/A	$1,954	$2,151	$2,191	1.9%	12.1%
State and Local Support	$9,681	$11,294	$11,096	-1.8%	14.6%	$11,826	$13,378	$13,349	-0.2%	12.9%
Education Appropriations	$9,681	$11,294	$11,096	-1.8%	14.6%	$9,866	$11,220	$11,151	-0.6%	13.0%
Net Tuition Revenue	$3,323	$2,809	$2,668	-5.0%	-19.7%	$11,841	$10,776	$10,505	-2.5%	-11.3%
Total Education Revenue	$12,978	$14,082	$13,722	-2.6%	5.7%	$21,556	$21,841	$21,508	-1.5%	-0.2%

Notes:

State public financial aid is any state appropriated student financial aid for public institutions, excluding loans and aid for students attending medical schools. For many states, it includes aid for both tuition costs and living expenses.
State public operating appropriations are a measure of state support directly allocated to public two- and four-year institutions. State public operating excludes local appropriations, agency funding, RAM, and student financial aid.
Local appropriations are any local government taxes allocated directly to institutions for operating expenses.
RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Sector-level education appropriations include any portion of federal stimulus funding allocated specifically to each sector but exclude state agency funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
Total education revenue is the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service. Sector-level total education revenue includes any portion of federal stimulus funding allocated specifically to each sector.
The year 2019 is included in this table because it is the starting point of the sector-level SHEF dataset.
Sector is determined at the institution level using the Carnegie Basic Classification (https://carnegieclassifications.acenet.edu/). Baccalaureate/Associate's Colleges and "less-than-two-year" degree-granting institutions not assigned a Carnegie classification are considered two-year institutions.
The Higher Education Cost Adjustment (HECA) estimates inflation in the costs paid by colleges and universities. HECA adjusts for inflation from the state perspective.

Source(s):

State Higher Education Executive Officers Association

Education Appropriations and Tuition Revenue

The historical data in Figure 2.1 (the wave chart) demonstrate the economic cycle’s impact on public higher education revenue from 2000 to 2025. From this point forward, all dollar figures in the SHEF report are adjusted for inflation and net FTE enrollment.

1. National Trends

The red line in the wave chart shows FTE enrollment over the last 25 years, which has broadly increased over time from 6.85 million in 1980 to 10.8 million in 2025. 11 11The funding levels and trends over time shown in the U.S. wave chart differ substantially by state. VIEW ALL FOOTNOTES Historically, enrollment increased sharply during economic recessions and would level off or decline during economic recoveries. This pattern held during the Great Recession as enrollment increased sharply from 2008 through 2011, and then slowly declined for most of the next decade as state economies recovered. However, the COVID-19 pandemic and brief economic recession in 2020 altered the traditional counter-cyclical enrollment trend with the two largest year-over-year declines on record in 2021 (3.9%) and 2022 (3.4%). In 2025, FTE enrollment increased for the third time since declines began in 2012. FTE enrollment in 2025 is down just 1.3% (140,847 FTE students) from 2019, the year prior to the start of the COVID-19 pandemic, but is still down 7.2% (836,028 FTE students) from the enrollment peak in 2011.

The total of the blue and green bars in the wave chart combines the two primary funding sources for public higher education — education appropriations and net tuition. The blue bars show change over time in education appropriations per FTE student. State education appropriations are made up of general operating funds for public institutions, state public financial aid, and state agency funding. The bars make the shape of a wave over time because per-student education appropriations generally fluctuate with the economic cycle. Education appropriations also include federal stimulus funding during the last two economic recessions.

In 1980, states provided, on average, $10,624 per FTE in inflation-adjusted education appropriations to public institutions. From there, funding for higher education changed in response to the economic cycle, declining during economic recessions but overall growing (on a per-FTE basis) during the next two decades. In fiscal year 2000, education appropriations reached a high of $12,287 per FTE. Since that peak, however, education appropriations have declined, down 1.7% ($205 per FTE) in the span of 24 years.

Overall, education appropriations per FTE decreased by 1.0% in 2025 after 12 years of consecutive increases. Despite this decrease, inflation-adjusted education appropriations per FTE in 2025 were 16.4%, or $1,704, above 2019 pre-pandemic levels. This increase in education appropriations per FTE since 2012 can be attributed to two notable trends:

Increasing state commitments to higher education funding.
A decline in FTE enrollment.

The green bars in Figure 2.1 show net tuition and fee revenue per FTE over time. Net tuition and fee revenue measures tuition and fee revenue at public institutions, excluding state and institutional financial aid. Unlike education appropriations, until very recently, net tuition and fee revenue has increased steadily over time, with an average annual net increase of 2.2% since 1980. These increases are primarily due to increases in tuition and fee rates and an increasing proportion of out-of-state, international, and graduate student enrollment.

In 2025, public institutions received, on average, $7,459 per FTE in net tuition and fee revenue. After reaching an all-time high in 2018 ($8,698 per FTE), net tuition and fee revenue per FTE has decreased in five of the last seven years: 3.0% in 2019, 2.0% in 2021, 2.8% in 2023, 4.1% in 2024, and 3.5% in 2025. Notably, 2025 is the second-largest decline in net tuition and revenue per FTE after 2024 since the SHEF dataset began in 1980. Recent net tuition and fee revenue declines have been due, at least in part, to flat tuition rates, continued increases in state support and financial aid, and changes in enrollment patterns. Prior to 2019, the only times net tuition and fee revenue per FTE declined were fiscal years 2000 and 2001, two years immediately preceding an economic recession.

Figure 2.1

Public FTE Enrollment, Education Appropriations per FTE, and Net Tuition Revenue per FTE, U.S., FY 2000-2025 (Constant Dollars)

Notes:

Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
Adjusted to account for interstate differences using the Cost of Living Index (COLI). The COLI is not a measure of inflation over time.

Source(s):

State Higher Education Executive Officers Association

Economic recessions profoundly impact state funding for higher education. Higher education is viewed as a discretionary item in state budgets and, traditionally, has been disproportionately cut compared to other state budget areas during economic downturns. 12 12Delaney, J., & Doyle, W. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 36(4). https://www.jstor.org/stable/23018116 VIEW ALL FOOTNOTES Figure 2.2 provides a more detailed look at the impact of economic recessions on state higher education appropriations.

In Figure 2.2, we begin each recessionary period at zero and track the cumulative percentage change over the course of the economic recession and recovery. With each recession until the most recent, in 2020, declines in state support per FTE grew steeper and recoveries became slower and incomplete, mirroring trends in state tax revenue. 13 13Weeden, 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 VIEW ALL FOOTNOTES However, the COVID-19 pandemic-induced recession was the shortest on record, lasting only two months, and economic activity rebounded quickly resulting in record tax revenues for many states. 14 14National Bureau of Economic Research. (2021). Business cycle dating committee announcement July 19, 2021. https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021 VIEW ALL FOOTNOTES 15 15Maynard, 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 VIEW ALL FOOTNOTES The trend in education appropriations per FTE followed the broader economic expansion and cumulatively increased 11.5% between 2020 and 2025. The rapid growth in state tax revenue was supplemented with federal stimulus funding that helped states increase spending on higher education priorities.

The sizable increases in per-student funding are also affected by FTE enrollment declines that coincided with the COVID-19 pandemic. Still, had FTE enrollment held constant at 2019 levels and federal stimulus funding not come through for states starting in 2020, inflation-adjusted education appropriations would have cumulatively increased 11.8% between 2020 and 2025.

Figure 2.2

Cumulative Annual Percent Change in Public Education Appropriations per FTE Following Economic Recessions, U.S., FY 1980-2025 (Constant Dollars)

Notes:

Cumulative annual percent change calculated since the start of each recession (1980, 1990, 2001, 2008, and 2020).
Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).

Source(s):

State Higher Education Executive Officers Association

2. State Comparisons

Education appropriations and net tuition and fee revenue per FTE vary considerably by state. Figure 2.3 and Table 2.2 provide an expanded view of the Figure 2.1 wave chart for all states in fiscal year 2025. States range widely in their total amount and distribution of revenue derived from education appropriations and net tuition and fees. For example, Nevada had the lowest combined revenue per FTE, with 82.0% from education appropriations, while New Hampshire had a similar total combined revenue, but only 32.6% of funding from education appropriations. At the other end of the spectrum, Delaware and Illinois had the two-highest combined revenues per FTE. However, in Illinois, 74.1% of the total came from education appropriations, compared to 26.1% in Delaware. 16 16Each 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. VIEW ALL FOOTNOTES

Figure 2.3

Education Appropriations and Net Tuition Revenue per FTE by State, FY 2025

Notes:

Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
The U.S. calculation does not include the District of Columbia.
In fiscal year 2025, FTE enrollment is estimated for Arkansas and Washington, and net tuition and fee revenue is estimated for Alabama, Kentucky, and Pennsylvania.
Fiscal year 2025 state-level education appropriations include estimated uncategorizable state support for South Carolina and South Dakota.
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.
Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
Adjusted to account for interstate differences using the Cost of Living Index (COLI). The COLI is not a measure of inflation over time.

Source(s):

State Higher Education Executive Officers Association

Table 2.2

Public FTE Enrollment, Education Appropriations per FTE, and Net Tuition Revenue per FTE by State, FY 2025 (Adjusted)

State	FTE Enrollment	Education Appropriations	Net Tuition Revenue	Total Education Revenue
Alabama	212,421	$11,210	$15,106	$25,430
Alaska	12,748	$22,141	$4,735	$26,876
Arizona	350,459	$6,064	$10,463	$16,086
Arkansas	111,230	$9,557	$8,099	$16,046
California	1,572,553	$12,773	$2,936	$15,709
Colorado	181,763	$7,933	$12,574	$20,507
Connecticut	79,736	$15,096	$10,671	$25,767
Delaware	37,497	$7,322	$20,707	$27,791
Florida	607,009	$11,503	$2,520	$14,023
Georgia	389,118	$12,727	$5,207	$17,924
Hawaii	33,990	$15,837	$4,482	$20,184
Idaho	59,017	$12,100	$9,222	$20,877
Illinois	271,721	$25,468	$8,890	$33,917
Indiana	268,616	$6,716	$11,024	$17,528
Iowa	114,582	$7,296	$12,607	$19,903
Kansas	125,341	$13,121	$7,810	$20,845
Kentucky	146,179	$10,608	$9,452	$19,791
Louisiana	172,710	$7,402	$5,335	$12,737
Maine	37,191	$9,028	$6,395	$15,423
Maryland	231,640	$13,674	$8,355	$22,028
Massachusetts	144,607	$14,644	$6,193	$20,837
Michigan	342,952	$10,640	$16,246	$26,885
Minnesota	170,243	$11,191	$10,702	$21,866
Mississippi	126,533	$8,764	$9,982	$18,746
Missouri	144,575	$10,972	$10,093	$21,064
Montana	35,285	$7,839	$8,448	$16,287
Nebraska	74,572	$13,760	$6,895	$20,335
Nevada	78,973	$10,407	$2,288	$12,695
New Hampshire	29,879	$4,557	$9,438	$13,995
New Jersey	258,475	$10,194	$6,321	$16,515
New Mexico	74,478	$23,020	$3,369	$26,390
New York	467,083	$16,047	$6,485	$22,533
North Carolina	461,726	$12,271	$5,041	$17,312
North Dakota	34,777	$10,066	$9,206	$19,272
Ohio	343,784	$8,352	$10,174	$18,526
Oklahoma	127,878	$9,379	$8,645	$18,023
Oregon	133,750	$8,580	$9,913	$18,493
Pennsylvania	286,795	$7,227	$11,547	$18,774
Rhode Island	29,190	$7,966	$9,958	$17,924
South Carolina	180,432	$10,049	$12,285	$21,630
South Dakota	32,548	$10,711	$9,935	$19,881
Tennessee	180,519	$14,955	$8,915	$23,570
Texas	1,090,797	$14,879	$8,168	$23,047
Utah	137,970	$12,153	$7,728	$19,880
Vermont	20,057	$5,470	$16,795	$21,637
Virginia	306,145	$11,547	$8,347	$19,807
Washington	202,774	$14,409	$6,974	$21,383
West Virginia	59,506	$8,432	$7,437	$14,462
Wisconsin	203,606	$9,955	$8,407	$18,362
Wyoming	23,649	$18,689	$3,059	$21,716
D.C.	3,240	$21,848	$3,883	$25,731
U.S.	10,819,079	$12,082	$7,459	$19,443

Notes:

Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
Total education revenue is the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service. Total education revenue includes federal stimulus funding.
The U.S. calculation does not include the District of Columbia.
Fiscal year 2025 FTE enrollment is estimated for Arkansas and Washington.
Fiscal year 2025 state-level education appropriations include estimated uncategorizable state support for South Carolina and South Dakota.
Fiscal year 2025 net tuition and fee revenue is estimated for Alabama, Kentucky, and Pennsylvania.
In fiscal year 2019, Mississippi changed the methodology for collecting four-year tuition and fee revenue; data prior to 2019 may not be comparable.
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.
Adjustment factors to arrive at constant dollar figures include Cost of Living Index (COLI) and Enrollment Mix Index (EMI). The COLI is not a measure of inflation over time.

Source(s):

State Higher Education Executive Officers Association

State Spotlight : Illinois

Education appropriations per FTE in Illinois continue to be an outlier at more than twice the U.S. average. The significant increase in appropriations over the last decade is driven largely by the state’s efforts to address its historically underfunded state retirement pension system.

In 2019, 35.3% of all education appropriations in Illinois went to its state retirement pension system. This share fell slightly to 34.7% in 2025. Of the $2.22 billion in pension payments in 2025, 77.3% was used for past unfunded liabilities, not current employees. This means that even after considering additional funding from local governments, over one quarter (26.8%) of all education appropriations in Illinois are now spent on past pension obligations and are not available for use in 2025. This translates to $6,831 per FTE student, more than the entire per-FTE appropriations in Arizona, Indiana, New Hampshire, and Vermont.

A SHEF Issue Brief on Illinois from the 2018 SHEF report provides more detail on the funding situation in Illinois over time.

3. Sector Comparisons

Public higher education revenues vary considerably across public two-year and four-year institutions. Figure 2.4 shows higher education revenues for public two-year and four-year institutions separately beginning in 2019.

As shown in Figure 2.4, education appropriations at four-year public institutions were only slightly higher than those at two-year public institutions in 2019 ($9,866 per FTE and $9,681 per FTE, respectively). That trend reversed in 2021 through 2024, with two-year appropriations per FTE outpacing those in the four-year sector. In 2025, four-year appropriations per FTE were again slightly higher than two-year appropriations per FTE ($56 per FTE higher). 17 17There 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. VIEW ALL FOOTNOTES In large part, the difference in education appropriations per FTE between two- and four-year public institutions is because SHEF data reported here include local appropriations, which primarily support two-year institutions ($3,620 per FTE compared to $27 at four-year institutions), but do not include research, agricultural extension, and medical funding (RAM), which contributed $2,191 per FTE exclusively in the four-year sector. In addition, SHEF metrics use FTE enrollment rather than student headcount, and two-year institutions have a far greater proportion of part-time students. 18 18According to the National Center for Education Statistics, in fall 2023, an estimated 35% of two-year students (at both public and private institutions) attended full time, compared to 72% at four-year institutions. Source: Table 303.70, https://nces.ed.gov/programs/digest/d24/tables/dt24_303.70.asp. VIEW ALL FOOTNOTES

Unlike education appropriations, net tuition and fee revenue is very different at two- and four-year institutions. On average, two-year institutions received $2,668 in net tuition revenue per FTE, or 25.4% of the average net tuition revenue per FTE at four-year institutions ($10,505). Due to higher net tuition and fee revenues, public four-year institutions have, on average, much higher total revenues with which to educate students than two-year institutions.

Figure 2.4

Public Education Appropriations and Net Tuition Revenue per FTE by Sector, U.S., FY 2019-2025 (Constant Dollars)

Notes:

Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Sector-level education appropriations include any portion of federal stimulus funding allocated specifically to each sector, but exclude state agency funding.
Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees.
Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
Sector is determined at the institution level using the Carnegie Basic Classification (https://carnegieclassifications.acenet.edu/). Baccalaureate/Associate's Colleges and "less-than-two-year" degree-granting institutions not assigned a Carnegie classification are considered two-year institutions.
Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
Adjusted to account for interstate differences using the Cost of Living Index (COLI). The COLI is not a measure of inflation over time.

Source(s):

State Higher Education Executive Officers Association

Education appropriations shown in the above sections include funding for institutions (general public operations) as well as funding for student financial aid. The following section explores the proportion of education appropriations allocated to student financial aid. States allocate financial aid to students attending both public (80.8%) and private (18.7%) institutions. A small portion of financial aid (0.3%) is allocated to students attending out-of-state institutions. SHEF focuses specifically on state funding for public institutions, and financial aid to independent and out-of-state institutions is excluded from education appropriations. 19 19Trends 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 (https://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. VIEW ALL FOOTNOTES This section examines inflation-adjusted state financial aid for students attending public, in-state institutions.

Figure 2.5 shows the change in state financial aid for students at public institutions over time. Unlike the rest of education appropriations, state public financial aid has increased almost every year since these data were first collected in 2001.

State financial aid to public institutions has increased 106.2%, from $616 per FTE in 2001 to $1,271 per FTE in 2025.
Public aid as a percentage of all education appropriations exceeded 10% in 2012. It has since fluctuated between a low of 9.2% in 2017 and reached a new high of 10.5% in 2025. Following a decline in 2022, public aid as a percentage of education appropriations has increased for the past three consecutive years. 20 20For 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 https://sheeo.org/wp-content/uploads/2023/04/COVID19-Tuition-and-Fee-Survey.pdf. VIEW ALL FOOTNOTES

Figure 2.5

Public Higher Education State Financial Aid per FTE and as a Percentage of Education Appropriations, U.S., FY 2001-2025 (Constant Dollars)

Notes:

State public financial aid is any state appropriated student financial aid for public institutions, excluding loans and aid for students attending medical schools. For many states, includes aid both for tuition costs and living expenses.
Financial aid data are not available prior to 2001. Over time, states have shifted from reporting appropriated student financial aid to reporting actual/awarded student financial aid (see measurement note). Any such updates are made to all historical data for each state.
Education appropriations are a measure of state and local support available for public higher education operating expenses and student financial aid, excluding appropriations for research, hospitals, and medical education. Education appropriations include federal stimulus funding.
Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
Adjusted to account for interstate differences using the Cost of Living Index (COLI). The COLI is not a measure of inflation over time.

Source(s):

State Higher Education Executive Officers Association

Despite increasing state allocations to student financial aid over the last several decades, student contributions to higher education revenues have increased over time. However, in recent years, growth in education appropriations and occasional declines in net tuition revenues have resulted in small decreases in institutional reliance on student tuition dollars. In the next section, we examine the student contribution to higher education, or the student share.

Figure 2.6 provides a comprehensive look at the reliance on net tuition and fees as a revenue source for public institutions — also known as the student share. The student share shows the proportion of total education revenue that comes from net tuition and fees. Net tuition and fee revenue excludes state and institutional financial aid but does not exclude federal financial aid or loans.

There has been a substantial shift of responsibility for financing public higher education toward net tuition and fee revenue between 1980 and 2025 (from 20.9% to 38.4%). Historically, the student share has increased most rapidly during periods of economic recession, shifting more of the higher education costs to students and families. The student share grew rapidly during the Great Recession, increasing from 35.8% in 2008 to an all-time high of 47.5% in 2013. During this time, students and their families turned to federal aid to cushion their growing share of higher education costs. Conversely, the student share has declined since 2019, the year prior to the COVID-19 economic downturn, decreasing from 45.1% to 38.4% in 2025. This steady decrease was due, in large part, to a combination of federal stimulus funding cushioning state budgets, allowing states to continue supporting higher education, and steep enrollment and tuition and fee revenue declines.

When the economy stabilizes, the student share also stabilizes and, as in recent years, decreases. Since the peak in 2013, the student share has decreased in 11 of the last 12 years, declining 9.2 percentage points to 38.4% in 2025. The student share has declined 6.7 percentage points since 2019, with the largest decrease ever observed in the SHEF dataset occurring in 2019 (1.8 percentage points). This downward trend in the student share may change in upcoming years as state budgets are expected to experience greater volatility and FTE enrollment levels out.

There are regional differences in the student share, but overall, a decrease in the student share holds across all regions. Since 2019, when the pre-pandemic student share was 45.1%, the student share has declined 8.6 percentage points in the Northeast, 6.8 in the South, 5.6 in the West, and 5.2 in the Midwest. Historically, the student share is highest in the Midwest and Northeast, while the South tracks closely to the U.S. average, and the West has the lowest regional student share. Today, the Northeast tracks more closely to the South and U.S. average (Figure 2.6).

Figure 2.6

Net Tuition as a Percentage of Total Education Revenue, U.S., FY 1980-2025

Notes:

The student share is a measure of the proportion of total education revenue at public institutions coming from net tuition revenue. Net tuition revenue used for capital debt service is included in net tuition revenue, but excluded from total education revenue in calculating the above figures. Total education revenue includes federal stimulus funding.
Regional averages are based on the U.S. Census designation.

Source(s):

State Higher Education Executive Officers Association

Executive Summary

Report Highlights

Full-Time Equivalent (FTE) Enrollment

Education Appropriations per FTE

State Public Financial Aid per FTE

Net Tuition and Fee Revenue per FTE

Total Education Revenue per FTE

Student Share

Conclusion

Reasons for Optimism

Causes for Concern

Sources and Uses of State Funding

Sources of State Funding

1. National Trends

Sources of State and Local Higher Education Funding in the U.S., FY 2010-2025 (Unadjusted Dollars, In Millions)

Distribution of State and Local Higher Education Funding Sources, U.S., FY 2010-2025

2. State Comparisons

Sources of State and Local Higher Education Funding by State, FY 2025 (Unadjusted Dollars)

Percentage of State and Local Higher Education Funding from Local Appropriations by State, FY 2025

Uses of State Funding

1. National Trends

Uses of State and Local Higher Education Funding in the U.S., FY 2010-2025 (Unadjusted Dollars, In Millions)

Distribution of State and Local Higher Education Funding Uses, U.S., FY 2010-2025

2. State Comparisons

Percentage of State and Local Higher Education Funding Used for Research - Agriculture - Medical (RAM) by State, FY 2025

Uses of State and Local Higher Education Funding by State, FY 2025 (Unadjusted Dollars)

Distribution of Revenue

WAVE CHARTS AND STUDENT SHARE

Trends Over Time

1. National Trends

Impact of Inflation and Enrollment on SHEF Metrics, U.S., FY 1980-2025

2. Sector Trends

Impact of Inflation and Enrollment on SHEF Metrics by Sector, U.S., FY 2019-2025

Education Appropriations and Tuition Revenue

1. National Trends

Public FTE Enrollment, Education Appropriations per FTE, and Net Tuition Revenue per FTE, U.S., FY 2000-2025 (Constant Dollars)

Cumulative Annual Percent Change in Public Education Appropriations per FTE Following Economic Recessions, U.S., FY 1980-2025 (Constant Dollars)

2. State Comparisons

Education Appropriations and Net Tuition Revenue per FTE by State, FY 2025

Public FTE Enrollment, Education Appropriations per FTE, and Net Tuition Revenue per FTE by State, FY 2025 (Adjusted)

State Spotlight : Illinois

3. Sector Comparisons

Public Education Appropriations and Net Tuition Revenue per FTE by Sector, U.S., FY 2019-2025 (Constant Dollars)

Financial Aid Share

Public Higher Education State Financial Aid per FTE and as a Percentage of Education Appropriations, U.S., FY 2001-2025 (Constant Dollars)

Student Share

Net Tuition as a Percentage of Total Education Revenue, U.S., FY 1980-2025

Distribution of State and Local Higher Education Funding Sources , U.S., FY 2010-2025

Percentage of State and Local Higher Education Funding from , FY 2025

Distribution of State and Local Higher Education Funding Uses , U.S., FY 2010-2025

Percentage of State and Local Higher Education Funding Used for , FY 2025

Public FTE Enrollment, Education Appropriations per FTE, and Net Tuition Revenue per FTE , U.S., FY 2000-2025

Cumulative Annual Percent Change in Public Education Appropriations per FTE Following Economic Recessions , U.S., FY 1980-2025

Education Appropriations and Net Tuition Revenue per FTE by State , FY 2025

Public Education Appropriations and Net Tuition Revenue per FTE by Sector , U.S., FY 2019-2025

Public Higher Education State Financial Aid per FTE and as a Percentage of Education Appropriations , U.S., FY 2001-2025

Net Tuition as a Percentage of Total Education Revenue , U.S., FY 1980-2025

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