The State Higher Education Finance (SHEF) report is produced annually by the State Higher Education Executive Officers Association (SHEEO) to broaden understanding of the context and consequences of public policy decisions in each state that contribute to public higher education funding levels and funding distributions across states and nationally.

SHEF provides the earliest possible review of state and local support, tuition revenue, and enrollment trends for the most recently completed fiscal year.

Report Highlights

State and local government funding for higher education totaled $139.1 billion in fiscal year 2024. Twenty-five states and Washington, D.C., used some portion of federal stimulus funding provided to state governments for higher education. Federal stimulus funding allocated by states to higher education totaled $624.1 million in 2024, down 63.3% before inflation from 2023 and comprising 0.4% of total support. States contributed $124.3 billion (a 7.7% increase), and local governments in 32 states contributed $14.8 billion to higher education (a 4.7% increase).

three students

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 10.4 million FTE enrolled students in 2024. Net FTE enrollment increased 2.9% in 2024, a gain of 294,833 FTE students, marking the first year of enrollment gains after 12 straight years of enrollment declines following the Great Recession. Despite this increase, FTE enrollment has declined 10.8% from its peak in 2011.
  • Enrollment increased in 44 states and Washington, D.C., between 2023 and 2024, ranging from 0.03% in Pennsylvania to 7.3% in Arizona and 11.0% in Washington, D.C.
  • In fiscal year 2023, four-year public institutions had a larger year-over-year FTE enrollment decline than two-year institutions, following two years in which two-year institutions experienced larger declines. In 2024, both four-year and two-year institutions saw enrollment increases, with two-year institutions experiencing proportionally larger growth of 5.0% compared to 1.7% 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 3.6% from 2023 to 2024.

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. Following sharp declines during and after the Great Recession, education appropriations have increased for 12 consecutive years. 

In 2024, education appropriations per FTE increased 0.8% beyond inflation to $11,683. Inflation-adjusted education appropriations per FTE were greater than pre-Great Recession funding levels in 2008 by 9.0%, or $969 per FTE, and pre-COVID-19 pandemic funding levels in 2019 by 17.9%, or $1,774 per FTE. These increases in education appropriations per FTE can be attributed to three notable trends:

  1. Increasing state commitments to higher education funding.
  2. A sharp decline in FTE enrollment.
  3. Generous federal stimulus funding.

Education appropriations vary considerably by state. Education appropriations per FTE in 2024 ranged from $4,629 in New Hampshire to $25,529 in Illinois. Despite national-level increases, education appropriations per FTE declined in 25 states and Washington, D.C., from 2023 to 2024. Despite nationally exceeding 2019 levels each year since, education appropriations per FTE remain below 2019 levels in six states with Indiana (9.3% below) and Delaware (4.9% below) having been the furthest below in 2024. Many states also continue funding higher education at a lower level than prior to the 2008 Great Recession. Twenty-two states have not yet recovered from the Great Recession (meaning their education appropriations per FTE in 2024 remain below 2008 levels). Arizona (40.3% below), Iowa (29.9% below), and Delaware (29.8% below) are furthest from recovery.

From 2023 to 2024, inflation-adjusted state and local education appropriations decreased 3.3% at two-year institutions, reaching $10,899 per FTE. At four-year institutions, education appropriations per FTE increased 1.8% from 2023 to 2024, reaching $10,820. 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 $6,451 per FTE in state general operating appropriations, 69.0% of the four-year general operating appropriation ($9,354).
  • Local appropriations were 115.1 times higher at two-year institutions ($3,712) compared to four-year institutions ($32 per FTE). There were two-year local appropriations in 29 states, compared to only eight for four-year institutions.
  • Total state and local support at two-year institutions was $10,899, 83.9% of the amount at four-year institutions ($12,986).

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 accounts for 80.8% of total state financial aid funding.

  • State public financial aid per FTE increased 4.8% from 2023 to 2024 and reached an all-time high of $1,155 per FTE enrolled student. These funds made up 9.9% of all education appropriations.
  • In 2024, 31 states had a year-over-year increase in financial aid per FTE. Public state financial aid ranged from $44 per FTE in Montana to over $3,795 in New Mexico.
  • State financial aid awards averaged $709 per FTE at two-year institutions, an increase of 1.2% over 2024. At four-year institutions, state financial aid increased 6.1%, reaching $1,395 per FTE. The majority of states (33) 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 176.0%. 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 five of the last six years. Public institutions received $7,510 in net tuition and fee revenue per FTE in 2024, down 3.7% from 2023, which is the 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 $2,472 per FTE in Florida. On the high end, net tuition and fee revenue was $19,797 in Delaware.
  • Net tuition and fee revenue per FTE declined in 37 states and Washington, D.C., between 2023 and 2024. Despite these recent declines, since 1980, net tuition and fee revenue per FTE has increased in every state, and by more than 100% in 41 states.
  • Net tuition and fee revenue at two-year institutions averaged $2,728 per FTE in 2024, down 3.5% from 2023. At four-year institutions, net tuition and fee revenue averaged $10,446 per FTE, down 2.8%, but still 3.8 times the average net tuition and fee revenue 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 1.0% from 2023 to 2024, dipping to $19,092 per FTE. Although 2024 is the third-highest national-level total revenue 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 five states. 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 varied widely by state. Total education revenue per FTE ranged from a low of $13,887 in Florida to a high of $34,282 in Illinois. Total education revenue per FTE decreased in 28 states and Washington, D.C., from 2023 to 2024, and in one state (Alaska) since 1980.

Two-year institutions had, on average, much less total revenue than four-year institutions. At two-year public institutions, total education revenue averaged $13,606 per FTE in 2024, down 3.3% from 2023. Total education revenue at four-year institutions averaged $21,117, a 0.6% increase from 2023. Thanks to collecting 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 2024, the U.S. average student share was 39.3%. This means that, on average, 39.3% of revenues at public institutions came from student tuition and fees. Excluding federal stimulus funding, the student share in 2024 was 39.5%. 

There is wide variation in the student share across states. In 2024, 19 states had a student share above 50%. From 2023 to 2024, student share decreased in 32 states. It is not yet clear how these trends will continue following the depletion of federal stimulus dollars, but these decreases in student share indicate that states are making efforts to address college affordability.

The student share is perhaps the most varied SHEF metric when comparing two- and four-year public institutions. At two-year institutions, the fiscal year 2024 student share was less than a quarter (20.1%); it was nearly half (49.5%) 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. This means that in those four states, students at two-year institutions are responsible for a greater portion of public institutional revenue than students attending four-year institutions.

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 8.7% of total state spending and 9.4% of general fund expenditures in fiscal year 2024. 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 1.5 percentage points since that time. 1 1National Association of State Budget Officers. (2024). State expenditure report: Fiscal years 2022-2024. 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 It is generally understood that state funding for higher education 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). http://www.jstor.org/stable/23018116 VIEW ALL FOOTNOTES In part, states disproportionately reduce per-student funding to higher education due to the presumption that funding reductions can be partially offset 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 (2009-2024). 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 $139.1 billion in fiscal year 2024, including more than $624.1 million in federal stimulus funding. Federal stimulus funding in 2024 comprised 0.4% of total support, a 63.3% decrease of $1.1 billion from fiscal year 2023. 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 $124.3 billion, and local governments in 32 states contributed $14.8 billion, representing increases of 89.4% and 10.6%, respectively. The largest funding source was state tax appropriations, which accounted for $114.5 billion or 82.3% of total funding, as shown in Figure 1.1. Non-tax support (mostly from state lotteries) increased 1.5% and totaled just under $5.6 billion. Non-appropriated support, state-funded endowments, and other sources of state funding contributed an additional $3.7 billion, an increase of 1.2% from 2023. 

Table 1.1

Sources of State and Local Higher Education Funding in the U.S., FY 2009-2024 (Unadjusted Dollars, In Millions)

Source 2009 2014 2019 2022 2023 2024 2024 % Distribution
Federal Stimulus $1,402 $0 $0 $2,191 $1,702 $624 0.4%
Tax Appropriations $75,043 $74,075 $86,441 $98,595 $104,867 $114,468 82.3%
Non-Tax Support $2,856 $3,126 $4,200 $4,990 $5,504 $5,586 4.0%
Non-Appropriated Support $81 $92 $288 $302 $301 $321 0.2%
State-Funded Endowment Earnings $398 $530 $1,044 $1,319 $1,414 $1,633 1.2%
Other $220 $323 $1,543 $1,600 $1,976 $1,783 1.3%
Funds Not Available for Use $592 $81 $63 $206 $320 $100 0.1%
Total State Support $79,407 $78,065 $93,454 $108,789 $115,444 $124,315 89.4%
Local Tax Appropriations $8,570 $9,506 $11,739 $13,295 $14,134 $14,801 10.6%
Total State and Local Support $87,977 $87,571 $105,193 $122,084 $129,578 $139,116 100.0%
Total State and Local Support (No Stimulus) $86,575 $87,571 $105,193 $119,894 $127,876 $138,492 99.6%
Notes:
  1. 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.
  2. Other includes multiyear appropriations from previous years and funds not classified in one of the other source categories.
  3. Funds not available for use include appropriations that were returned to the state, and portions of multiyear appropriations to be spread over other years.
  4. 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 2009-2024


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Notes:
  1. 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.
  2. Tax appropriations are any appropriations from state government taxes to institutions for operations and other higher education activities.
  3. 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.
  4. 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.
  5. 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.
  6. 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). In 2024, all but one state (Arizona) had the majority of higher education funding come from state tax appropriations. Five states (Delaware, Massachusetts, Minnesota, North Dakota, and Washington) relied on tax appropriations as their only major source of state and local funding for higher education. 

Arizona is the only state in which a large proportion (42.4%) of higher education funding came from local appropriations. California, Kansas, Michigan, Nebraska, Oregon, and Texas were the only other states that relied on local appropriations for at least 15% of higher education funding. Eighteen 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 2024 (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% $2,583,356
Alaska 104.5% 0.0% 4.7% 0.2% 0.0% 0.0% $335,687
Arizona 48.5% 0.2% 0.0% 42.4% 8.0% 0.8% $2,404,332
Arkansas 86.7% 8.8% 0.0% 3.6% 0.9% 0.0% $1,125,169
California 80.9% 2.3% 0.0% 16.9% 0.0% 0.0% $24,289,688
Colorado 88.9% 3.5% 0.0% 7.6% 0.0% 0.0% $1,623,171
Connecticut 78.3% 0.0% 0.0% 0.0% 6.9% 14.8% $1,899,040
Delaware 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% $285,369
Florida 74.7% 23.5% 0.0% 0.7% 1.1% 0.0% $7,235,971
Georgia 78.8% 19.7% 0.0% 0.0% 1.4% 0.0% $4,839,493
Hawaii 100.2% 1.1% 1.3% 0.0% 0.0% 0.0% $873,855
Idaho 89.8% 0.0% 0.0% 5.8% 3.3% 1.1% $699,943
Illinois 84.8% 0.0% 0.0% 14.9% 0.0% 0.3% $6,723,884
Indiana 99.3% 0.6% 0.0% 0.0% 0.0% 0.2% $2,028,113
Iowa 95.5% 0.0% 0.0% 4.5% 0.0% 0.0% $942,338
Kansas 76.0% 0.9% 0.0% 22.7% 0.0% 0.4% $1,464,989
Kentucky 69.8% 25.6% 0.0% 2.4% 0.2% 2.0% $1,524,572
Louisiana 98.6% 0.0% 0.0% 0.0% 1.3% 0.1% $1,673,718
Maine 95.7% 1.9% 0.0% 0.0% 0.3% 2.1% $405,842
Maryland 86.6% 0.3% 0.0% 13.1% 0.0% 0.0% $3,793,083
Massachusetts 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% $2,546,803
Michigan 79.6% 0.0% 0.0% 20.0% 0.0% 0.4% $3,487,622
Minnesota 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% $2,059,152
Mississippi 93.8% 0.2% 0.0% 5.9% 0.1% 0.0% $1,252,013
Missouri 80.0% 6.3% 2.5% 14.7% 0.5% 1.1% $1,519,720
Montana 94.2% 0.0% 0.0% 3.4% 1.9% 0.5% $313,958
Nebraska 76.7% 3.5% 0.0% 19.8% 0.0% 0.0% $1,130,586
Nevada 87.3% 12.2% 0.0% 0.1% 0.0% 0.4% $968,338
New Hampshire 95.5% 2.7% 0.0% 0.0% 0.1% 1.6% $178,929
New Jersey 87.8% 3.7% 0.0% 8.4% 0.0% 0.1% $3,376,206
New Mexico 70.6% 12.4% 0.0% 9.1% 1.3% 6.6% $1,537,507
New York 85.1% 0.0% 0.0% 14.9% 0.0% 0.0% $7,914,982
North Carolina 94.1% 0.3% 0.5% 5.5% 0.1% 0.5% $5,718,005
North Dakota 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% $470,036
Ohio 91.9% 0.0% 0.0% 8.1% 0.0% 0.0% $2,827,986
Oklahoma 80.6% 2.7% 0.0% 5.2% 11.1% 0.4% $1,205,378
Oregon 83.8% 0.6% 0.0% 15.6% 0.0% 0.0% $1,486,922
Pennsylvania 92.9% 0.0% 0.0% 7.1% 0.0% 0.0% $2,261,604
Rhode Island 98.9% 0.0% 0.0% 0.0% 0.0% 1.1% $267,075
South Carolina 66.0% 29.1% 0.0% 4.9% 0.0% 0.0% $1,951,617
South Dakota 98.2% 1.3% 0.3% 0.0% 0.8% 0.0% $339,580
Tennessee 79.6% 15.8% 0.0% 0.0% 4.7% 0.0% $2,810,089
Texas 58.9% 0.5% 0.0% 21.6% 19.1% 0.0% $15,103,346
Utah 98.0% 0.4% 0.0% 0.0% 0.0% 1.6% $1,866,969
Vermont 97.0% 0.0% 1.8% 0.0% 0.2% 4.6% $151,842
Virginia 99.4% 0.0% 0.0% 0.6% 0.0% 0.0% $3,440,556
Washington 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% $3,006,610
West Virginia 93.0% 7.0% 0.0% 0.0% 0.0% 0.0% $574,048
Wisconsin 86.7% 0.0% 0.0% 12.6% 0.0% 0.7% $2,147,279
Wyoming 84.2% 0.0% 0.0% 9.7% 3.9% 2.3% $449,595
D.C. 97.0% 0.0% 0.0% 0.0% 2.9% 0.1% $104,546
U.S. 82.3% 4.0% 0.1% 10.6% 2.7% 0.4% $139,115,962
Notes:
  1. 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.
  2. 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.
  3. Funds not available for use include appropriations that were returned to the state, and portions of multiyear appropriations to be spread over other years.
  4. 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.
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 2024


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Notes:
  1. Excludes states with no selected funding source.
  2. 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.
  3. Tax appropriations are any appropriations from state government taxes to institutions for operations and other higher education activities.
  4. 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.
  5. 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, Kentucky, and South Carolina relied on non-tax support for at least 20% of higher education funding. Meanwhile, 22 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 12 states and Washington, D.C. In Arizona, Connecticut, Oklahoma, and Texas, these revenue sources made up more than 5% of higher education support.

In 2024, federal stimulus funding provided to state governments was used for higher education in 25 states and Washington, D.C. Of these states, stimulus funds comprised less than 5% of total state and local support in 23 states and Washington, D.C. Connecticut and New Mexico are the only states that relied on federal stimulus funding for more than 5% of higher education funding in 2024.

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 21 states. In two states (Arizona and Nebraska), the proportion of total higher education funding derived from local appropriations has increased by at least 5 percentage points since 2009.

  • Similarly, 15 states had increases in non-tax appropriations from 2009 to 2024. 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 (2009-2024). 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 8.3% in 2024 to $108.9 billion, representing 78.6% 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 2024, states provided $1.8 billion in agency funding (1.3% 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 5.4% since 2023 to $14.0 billion — comprising 10.1% of total state and local support. 
  • State-funded student financial aid increased 12.3% to $14.9 billion — 10.7% of total support — from 2023 to 2024. In 2024, 80.8% of total student aid was allocated to students attending public institutions.
  • Operating support for independent (private) institutions decreased 9.2% to $357.7 million, and support for non-credit and continuing education increased 1.7% to $405.4 million. Together, these uses of state and local funding constituted 0.6% of higher education funding.

Table 1.3

Uses of State and Local Higher Education Funding in the U.S., FY 2009-2024 (Unadjusted Dollars, In Millions)

Use 2009 2014 2019 2022 2023 2024 2024 % Distribution
General Public Operations $67,305 $67,637 $82,595 $94,396 $100,577 $108,876 78.6%
Agency Funding N/A N/A $1,113 $1,543 $1,544 $1,840 1.3%
Research - Agriculture - Medical (RAM) $10,440 $10,001 $10,894 $12,245 $13,267 $13,979 10.1%
State Public Financial Aid $5,755 $7,187 $8,846 $10,090 $10,750 $12,011 8.7%
Out-of-State Financial Aid $39 $40 $38 $39 $42 $48 0.0%
Independent Student Aid $2,492 $2,201 $2,202 $2,441 $2,422 $2,785 2.0%
Independent Operating Support $253 $191 $219 $297 $394 $358 0.3%
Non-Credit and Continuing Education $291 $313 $377 $366 $399 $405 0.3%
Total Student Financial Aid $8,286 $9,429 $11,108 $12,590 $13,239 $14,873 10.7%
Total Independent Support $2,745 $2,392 $2,421 $2,738 $2,816 $3,143 2.3%
Total State and Local Support (No Stimulus) $86,575 $87,571 $105,193 $119,894 $127,876 $138,492 100.0%
Notes:
  1. 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.
  2. Agency funding is included in general public operations, and is the allocation of operating funds to state-funded, state-level coordinating and governing bodies.
  3. RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
  4. 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.
  5. Total independent support is the sum of state funds for private institutions (independent student aid and independent operating support).
  6. 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 biggest change in uses of higher education funding is the portion of funding allocated to public financial aid. Excluding stimulus funding, the proportion of state and local funding allocated to public financial aid increased 2.0 percentage points from 6.6% in 2009 to 8.7% in 2024, signifying a slight shift in the way states have chosen to invest in public higher education. Meanwhile, the portion allocated to general public operating increased by 0.9 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 (0.9) 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 2009-2024


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Notes:
  1. 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.
  2. 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.
  3. 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.
  4. RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
  5. Other financial aid includes any state appropriated student financial aid to students attending independent (private) or out-of-state institutions.
  6. 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 (see Table 1.4). All states and Washington, D.C., allocated at least half of all funding to general public operations in fiscal year 2024. West Virginia (53.5%) allocated the smallest proportion of funding to public institutions’ general operations budgets, while Washington, D.C. (92.8%) and Rhode Island (92.7%) allocated the largest. Overall, the proportion of funding allocated to general public operations decreased in a total of 26 states since 2009.

Forty-six states reported agency funding in fiscal year 2024. Agency allocations ranged from 0.02% of all support in Montana to 17.5% 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 2024, RAM ranged from 2.6% in Massachusetts to 28.3% in West Virginia.

Figure 1.4

Percentage of State and Local Higher Education Funding Used for Research - Agriculture - Medical (RAM) by State, FY 2024


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Notes:
  1. Excludes states with no selected funding use.
  2. 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.
  3. 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.
  4. RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
  5. 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 29.9% in South Carolina. No other state allocated less than 1% of funding to student financial aid. Georgia, Kentucky, and South Carolina all allocated at least 20% of state and local funding to financial aid. From 2009 to 2024, the proportion of total state and local support appropriated to student financial aid increased in 37 states.

As seen in Table 1.4, support for independent institutions is generally one of the smallest allocations of state and local funding. In 2024, 46 states provided funding to independent institutions, ranging from 0.002% in New Mexico to 9.6% 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 (69.9%) and Maryland (83.8%), 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 2024 (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 80.4% 0.7% 15.3% 2.7% 1.5% $2,583,356
Alaska 87.8% 0.0% 6.8% 5.4% 0.5% $335,687
Arizona 85.4% 0.1% 10.5% 4.1% 0.0% $2,384,181
Arkansas 67.9% 0.3% 21.6% 10.5% 0.9% $1,125,169
California 85.0% 0.1% 5.1% 9.9% 0.9% $24,289,688
Colorado 70.5% 0.5% 12.3% 17.3% 0.8% $1,623,171
Connecticut 75.6% 6.0% 22.6% 1.8% 0.5% $1,618,140
Delaware 89.0% 0.1% 3.5% 7.5% 0.1% $285,369
Florida 76.9% 0.1% 7.5% 14.9% 3.5% $7,235,971
Georgia 69.4% 3.8% 9.9% 20.1% 2.1% $4,839,493
Hawaii 82.5% 8.1% 16.3% 1.1% 0.0% $873,722
Idaho 86.6% 17.5% 9.9% 3.5% 0.7% $692,074
Illinois 86.0% 2.5% 2.9% 10.3% 4.2% $6,701,380
Indiana 67.0% 0.7% 14.3% 18.5% 5.6% $2,024,749
Iowa 75.9% 0.1% 13.6% 10.6% 5.7% $942,338
Kansas 79.0% 0.3% 14.2% 6.8% 1.6% $1,459,429
Kentucky 62.7% 1.0% 10.0% 26.1% 7.5% $1,493,608
Louisiana 58.4% 13.7% 22.5% 19.1% 1.4% $1,671,801
Maine 78.0% 0.0% 9.5% 12.5% 1.4% $397,481
Maryland 81.5% 0.2% 11.1% 3.8% 4.3% $3,793,083
Massachusetts 84.6% 0.5% 2.6% 12.5% 2.4% $2,546,803
Michigan 89.3% 0.0% 5.2% 5.5% 0.8% $3,472,622
Minnesota 77.7% 5.0% 10.2% 11.8% 4.4% $2,059,152
Mississippi 70.3% 1.3% 25.6% 4.1% 0.3% $1,252,013
Missouri 74.3% 0.3% 14.3% 11.4% 2.5% $1,502,883
Montana 84.3% 0.0% 15.2% 0.5% 0.0% $312,373
Nebraska 77.8% 0.1% 18.9% 3.3% 0.8% $1,130,236
Nevada 74.8% 6.2% 12.9% 12.3% 0.0% $964,064
New Hampshire 87.1% 0.3% 7.3% 5.6% 0.8% $175,988
New Jersey 70.8% 0.1% 9.1% 19.6% 4.6% $3,374,206
New Mexico 70.6% 0.4% 10.5% 18.4% 0.0% $1,436,505
New York 85.1% 0.8% 4.2% 10.2% 3.2% $7,914,982
North Carolina 81.0% 1.3% 11.1% 5.1% 1.6% $5,688,372
North Dakota 71.6% 9.2% 22.3% 5.4% 1.6% $470,036
Ohio 81.1% 0.9% 8.9% 8.6% 2.7% $2,827,986
Oklahoma 76.3% 0.8% 13.1% 10.6% 1.0% $1,200,378
Oregon 71.9% 1.5% 11.3% 13.0% 1.1% $1,486,922
Pennsylvania 76.9% 0.3% 4.1% 19.0% 9.6% $2,261,604
Rhode Island 92.7% 1.6% 0.0% 7.3% 0.7% $264,091
South Carolina 57.3% 1.7% 12.3% 29.9% 8.5% $1,951,617
South Dakota 81.8% 9.4% 15.8% 2.3% 0.4% $339,580
Tennessee 64.1% 2.0% 15.9% 19.8% 3.5% $2,810,089
Texas 76.3% 0.5% 19.0% 4.8% 0.6% $15,103,346
Utah 90.2% 0.7% 7.3% 2.2% 0.5% $1,837,969
Vermont 67.5% 0.0% 14.2% 18.1% 4.3% $144,876
Virginia 69.8% 0.3% 8.6% 19.8% 4.4% $3,440,556
Washington 78.6% 1.5% 4.8% 16.6% 2.6% $3,006,610
West Virginia 53.5% 1.7% 28.3% 16.9% 1.3% $574,048
Wisconsin 82.6% 5.5% 10.2% 6.8% 2.0% $2,132,752
Wyoming 84.1% 0.9% 8.9% 6.7% 0.0% $439,271
D.C. 92.8% 0.0% 4.3% 2.9% 0.0% $104,448
U.S. 78.6% 1.3% 10.1% 10.7% 2.3% $138,491,818
Notes:
  1. 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.
  2. 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.
  3. 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.
  4. Total independent support is the sum of state funds for private institutions (independent student aid and independent operating support).
  5. 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.
  6. Fiscal year 2024 total state financial aid includes estimated medical public aid for New Mexico and is missing medical public aid for Pennsylvania due to data availability. Fiscal year 2024 state-level general public operations includes estimated uncategorizable state support for New Mexico and South Carolina.
  7. In California, state funds used for nontuition financial aid are classified as uncategorizable state support, which is included in state-level general public operations.
  8. In fiscal year 2024, Michigan appropriated $300 million to the Michigan Achievement Scholarship, $110 million of which was spent on scholarships. The remaining $189.5M remains in the Post-Secondary Scholarship fund to help build up to the fully implemented cost of the Michigan Achievement Scholarship and is captured as uncategorizable state support.
Source(s):
  • State Higher Education Executive Officers Association

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).

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 7.5% over 2023. Both subcomponents of education appropriations also increased, 11.7% for state public financial aid and 8.2% for general public operations. Net tuition and fee revenue (tuition and fees net of state and institutional aid and medical tuition) increased 2.6%.

The middle section of Table 2.1 shows that the Higher Education Cost Adjustment (HECA), a measure of inflation in service industries, increased 3.6% from 2023 to 2024. After applying HECA and therefore removing any increases due to inflation, state public financial aid increased 7.9%, while general public operations increased 4.5%, and net tuition and fee revenue decreased 0.9%.

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 2023 to 2024, enrollment increased 2.9%, or 294,833 FTE students. After adjusting for both inflation and enrollment, we see that education appropriations increased 0.8% (financial aid increased 4.8%, general public operations increased 1.5%), while net tuition and fee revenue decreased 3.7%, and total education revenue decreased 1.0%.

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 (3.1%), 2021 (1.9%), 2022 (0.04%), 2023 (2.9%), and 2024 (3.7%). The decline in 2024, the largest yet, is partially explained by state public financial aid increases, which are removed from net tuition revenue, and increases in FTE enrollment. 

Education appropriations and total education revenue described here and reported in Table 2.1 include federal stimulus funding in fiscal years 2020, 2021, 2022, 2023, and 2024. Excluding federal stimulus funding, inflation-adjusted education appropriations per FTE increased 1.8%, and total education revenue decreased 0.5%. 

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, 2021, 2022, 2023, and 2024. 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 1980-2024

1980 2001 2014 2019 2023 2024 % Change Since 2023 % Change Since 2019 % Change Since 2014 % Change Since 2001 % Change Since 1980
Current Unadjusted Dollars (Millions)
State Public Financial Aid N/A $2,843 $7,187 $8,846 $10,750 $12,011 11.7% 35.8% 67.1% 322.5% N/A
General Public Operations N/A $53,289 $67,637 $82,595 $100,577 $108,876 8.3% 31.8% 61.0% 104.3% N/A
Education Appropriations $16,134 $56,118 $74,825 $91,442 $113,014 $121,502 7.5% 32.9% 62.4% 116.5% 653.1%
Net Tuition Revenue $4,264 $22,896 $65,390 $75,363 $76,102 $78,096 2.6% 3.6% 19.4% 241.1% 1731.6%
Total Education Revenue $20,398 $78,903 $139,472 $165,897 $188,178 $198,547 5.5% 19.7% 42.4% 151.6% 873.4%
Constant Inflation Adjusted Dollars (Millions)
HECA 0.2287 0.5466 0.7607 0.8419 0.9653 1.0000 3.6% 18.8% 31.5% 82.9% 337.3%
State Public Financial Aid N/A $5,201 $9,448 $10,508 $11,136 $12,011 7.9% 14.3% 27.1% 130.9% N/A
General Public Operations N/A $97,484 $88,912 $98,106 $104,191 $108,876 4.5% 11.0% 22.5% 11.7% N/A
Education Appropriations $70,552 $102,660 $98,361 $108,614 $117,074 $121,502 3.8% 11.9% 23.5% 18.4% 72.2%
Net Tuition Revenue $18,645 $41,885 $85,958 $89,516 $78,836 $78,096 -0.9% -12.8% -9.1% 86.5% 318.9%
Total Education Revenue $89,197 $144,340 $183,343 $197,051 $194,938 $198,547 1.9% 0.8% 8.3% 37.6% 122.6%
Constant Inflation Adjusted Dollars (per FTE)
FTE Enrollment 6,852,242 8,709,255 11,209,827 10,960,300 10,104,678 10,399,511 2.9% -5.1% -7.2% 19.4% 51.8%
State Public Financial Aid N/A $597 $843 $959 $1,102 $1,155 4.8% 20.5% 37.0% 93.4% N/A
General Public Operations N/A $11,193 $7,932 $8,951 $10,311 $10,469 1.5% 17.0% 32.0% -6.5% N/A
Education Appropriations $10,296 $11,787 $8,775 $9,910 $11,586 $11,683 0.8% 17.9% 33.2% -0.9% 13.5%
Net Tuition Revenue $2,721 $4,809 $7,668 $8,167 $7,802 $7,510 -3.7% -8.1% -2.1% 56.1% 176.0%
Total Education Revenue $13,017 $16,573 $16,356 $17,979 $19,292 $19,092 -1.0% 6.2% 16.7% 15.2% 46.7%
Notes:
  1. Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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 2023 and 2024, total education appropriations increased 5.3% at two-year institutions and 7.3% at four-year institutions. Four-year institutions also receive research, agriculture, and medical (RAM) appropriations, which increased 5.4% from 2023.

In unadjusted dollars, net tuition and fee revenue increased 5.0% at two-year institutions. Comparatively, unadjusted net tuition and fee revenue increased 2.3% at four-year institutions.

The second section of Table 2.1A shows that from 2023 to 2024, higher education inflation was 3.6%. After adjusting for inflation, all components of state support to two-year institutions increased between 1.1% to 1.6% with the exceptions of state public operating (2.2%) and state public financial aid (6.3%). At four-year institutions, most components of state support increased 1.7% to 7.9% after adjusting for inflation, with the largest increase in state public financial aid. Two components, local appropriations and net tuition and fee revenue, decreased by 0.3% and 1.2%, respectively.

Net FTE enrollment increased 5.0% at two-year institutions and 1.7% at four-year institutions. 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 $9 (1.2%) at two-year institutions, and $81 (6.1%) at four-year institutions.
  • State public operating per FTE decreased $178 (2.7%) at two-year institutions and increased $217 (2.4%) at four-year institutions.
  • Local appropriations per FTE decreased $144 (3.7%) at two-year institutions and just under $1 (1.9%) at four-year institutions.
  • Research, agricultural extension, and medical (RAM) appropriations only available to four-year institutions increased just under $1 (0.04%) per FTE.
  • Total state and local support per FTE decreased by $396 (3.3%) at two-year institutions and increased $197 (1.5%) at four-year institutions.
  • Net tuition revenue per FTE declined by $100 (3.5%) at two-year institutions and $306 (2.8%) at four-year institutions.
  • Total education revenue per FTE decreased $468 (3.3%) at two-year institutions, but increased $120 (0.6%) 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 2019-2024

Two-Year Four-Year
2019 2023 2024 % Change Since 2023 % Change Since 2019 2019 2023 2024 % Change Since 2023 % Change Since 2019
Current Unadjusted Dollars (Millions)
State Public Financial Aid $2,355 $2,529 $2,785 10.1% 18.3% $6,372 $8,074 $9,026 11.8% 41.7%
State Public Operating $20,234 $23,949 $25,360 5.9% 25.3% $46,241 $56,120 $60,510 7.8% 30.9%
Local Appropriations $11,613 $13,932 $14,592 4.7% 25.7% $126 $202 $209 3.3% 65.6%
RAM $0 $0 $0 N/A N/A $10,894 $13,267 $13,979 5.4% 28.3%
State and Local Support $34,202 $40,707 $42,844 5.3% 25.3% $63,655 $78,544 $84,000 6.9% 32.0%
Education Appropriations $34,202 $40,707 $42,844 5.3% 25.3% $52,739 $65,252 $69,991 7.3% 32.7%
Net Tuition Revenue $11,825 $10,216 $10,725 5.0% -9.3% $63,658 $66,033 $67,572 2.3% 6.1%
Total Education Revenue $45,933 $50,844 $53,486 5.2% 16.4% $115,588 $130,427 $136,595 4.7% 18.2%
Constant Inflation Adjusted Dollars (Millions)
HECA 0.8419 0.9653 1.0000 3.6% 18.8% 0.8419 0.9653 1.0000 3.6% 18.8%
State Public Financial Aid $2,798 $2,620 $2,785 6.3% -0.4% $7,568 $8,364 $9,026 7.9% 19.3%
State Public Operating $24,033 $24,809 $25,360 2.2% 5.5% $54,925 $58,136 $60,510 4.1% 10.2%
Local Appropriations $13,794 $14,432 $14,592 1.1% 5.8% $150 $209 $209 -0.3% 39.4%
RAM $0 $0 $0 N/A N/A $12,940 $13,744 $13,979 1.7% 8.0%
State and Local Support $40,625 $42,169 $42,844 1.6% 5.5% $75,609 $81,366 $84,000 3.2% 11.1%
Education Appropriations $40,625 $42,169 $42,844 1.6% 5.5% $62,643 $67,596 $69,991 3.5% 11.7%
Net Tuition Revenue $14,045 $10,583 $10,725 1.3% -23.6% $75,613 $68,406 $67,572 -1.2% -10.6%
Total Education Revenue $54,559 $52,670 $53,486 1.5% -2.0% $137,294 $135,112 $136,595 1.1% -0.5%
Constant Inflation Adjusted Dollars (per FTE)
FTE Enrollment 4,359,324 3,742,421 3,930,950 5.0% -9.8% 6,600,977 6,362,255 6,468,560 1.7% -2.0%
State Public Financial Aid $642 $700 $709 1.2% 10.4% $1,147 $1,315 $1,395 6.1% 21.7%
State Public Operating $5,513 $6,629 $6,451 -2.7% 17.0% $8,321 $9,138 $9,354 2.4% 12.4%
Local Appropriations $3,164 $3,856 $3,712 -3.7% 17.3% $23 $33 $32 -1.9% 42.3%
RAM $0 $0 $0 N/A N/A $1,960 $2,160 $2,161 0.0% 10.2%
State and Local Support $9,319 $11,268 $10,899 -3.3% 17.0% $11,454 $12,789 $12,986 1.5% 13.4%
Education Appropriations $9,319 $11,268 $10,899 -3.3% 17.0% $9,490 $10,625 $10,820 1.8% 14.0%
Net Tuition Revenue $3,222 $2,828 $2,728 -3.5% -15.3% $11,455 $10,752 $10,446 -2.8% -8.8%
Total Education Revenue $12,515 $14,074 $13,606 -3.3% 8.7% $20,799 $21,237 $21,117 -0.6% 1.5%
Notes:
  1. 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.
  2. 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.
  3. Local appropriations are any local government taxes allocated directly to institutions for operating expenses.
  4. RAM refers to the total appropriations intended for the direct operations of research, agriculture, public health care services, and medical schools.
  5. 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.
  6. 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.
  7. 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.
  8. The year 2019 is included in this table because it is the starting point of the sector-level SHEF dataset.
  9. 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.
  10. 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 1998 to 2024. 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 10.4 million in 2024. 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 2024, FTE enrollment increased for the first time since declines began in 2012. Still, FTE enrollment in 2024 was down 5.1% (560,789 FTE students) from 2019, the year prior to the start of the COVID-19 pandemic, and 10.8% (1.3 million FTE students) from the 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, $10,296 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 $11,902 per FTE. Since that peak, however, education appropriations have declined, down 1.8% ($219 per FTE) in the span of 24 years.

Overall, appropriations have increased for 12 consecutive years. In 2024, inflation-adjusted education appropriations were 17.9%, or $1,774 per FTE, above 2019 pre-pandemic levels. This increase in education appropriations can be attributed to three notable trends: 

  1. Increasing state commitments to higher education funding.
  2. A sharp decline in FTE enrollment.
  3. Federal stimulus funding given to states to protect their revenues and support additional costs due to the COVID-19 pandemic and short economic recession.  

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 2.4% above inflation 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 2024, public institutions received, on average, $7,510 per FTE in net tuition and fee revenue. After reaching an all-time high in 2018 ($8,426 per FTE), net tuition and fee revenue per FTE has decreased in five of the last six years: 3.1% in 2019, 1.9% in 2021, 0.04% in 2022, 2.9% in 2023, and 3.7% in 2024. Notably, 2024 is the largest decline in net tuition and revenue per FTE 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 1999-2024 (Constant Dollars)


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Notes:
  1. 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.
  2. 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.
  3. Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
  4. Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
  5. Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
  6. 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). www.jstor.org/stable/23018116 VIEW ALL FOOTNOTES This trend changed following the brief economic downturn in 2020. 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.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. 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 14 14Maynard, 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 12.8% between 2020 and 2024. The rapid growth in state tax revenue was supplemented with federal stimulus funding that helped states increase spending on higher education priorities. See Measurement Note: Federal Stimulus Funding for more information. 

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 and federal stimulus funding not come through for states, inflation-adjusted education appropriations would have cumulatively increased 9.0% from 2020.

Figure 2.2

Cumulative Annual Percent Change in Public Education Appropriations per FTE Following Economic Recessions, U.S., FY 1980-2024 (Constant Dollars)


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Notes:
  1. Cumulative annual percent change calculated since the start of each recession (1980, 1990, 2001, 2008, and 2020).
  2. 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.
  3. Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
  4. 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 provides an expanded view of the Figure 2.1 wave chart for all states in fiscal year 2024. States range widely in their total amount and distribution of revenue derived from education appropriations and net tuition and fees. For example, Florida had the lowest combined revenue per FTE with 82.2% having come from state funding while New Hampshire had a similar total combined revenue, but only 32.1% of funding came from education appropriations. At the other end of the spectrum, Illinois and Michigan had among the highest combined revenues. However, in Illinois, 73.6% of the total came from education appropriations, whereas that proportion was 40.6% in Michigan. 15 15Each 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 2024


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Notes:
  1. 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.
  2. 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.
  3. The U.S. calculation does not include the District of Columbia.
  4. Fiscal year 2024 FTE enrollment is estimated for Arkansas; net tuition and fee revenue is estimated for Pennsylvania.
  5. Fiscal year 2024 state-level education appropriations include estimated uncategorizable state support for New Mexico and South Carolina.
  6. 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.
  7. Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
  8. Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
  9. 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 2024 (Adjusted)

State FTE Enrollment Education Appropriations Net Tuition Revenue Total Education Revenue
Alabama 200,949 $11,862 $15,578 $26,616
Alaska 12,684 $20,002 $4,948 $24,950
Arizona 327,169 $6,707 $10,175 $16,414
Arkansas 106,724 $9,474 $8,712 $15,989
California 1,520,716 $12,134 $2,936 $15,070
Colorado 181,532 $7,255 $12,247 $19,502
Connecticut 76,077 $16,824 $11,144 $27,968
Delaware 37,240 $6,866 $19,797 $26,459
Florida 579,477 $11,415 $2,472 $13,887
Georgia 366,748 $12,993 $5,041 $18,027
Hawaii 32,695 $15,596 $4,808 $20,267
Idaho 55,784 $12,231 $8,738 $20,556
Illinois 261,644 $25,529 $9,176 $34,282
Indiana 247,945 $7,234 $11,716 $18,710
Iowa 116,188 $6,982 $11,720 $18,701
Kansas 121,103 $10,949 $7,743 $18,601
Kentucky 139,663 $10,144 $9,866 $19,742
Louisiana 164,921 $8,426 $5,855 $14,281
Maine 33,806 $9,512 $6,265 $15,777
Maryland 221,493 $12,290 $8,120 $20,410
Massachusetts 137,084 $14,355 $6,815 $21,169
Michigan 332,245 $11,423 $16,747 $28,171
Minnesota 161,710 $11,418 $10,633 $22,022
Mississippi 121,925 $9,047 $9,057 $18,104
Missouri 144,901 $10,352 $9,417 $19,769
Montana 34,503 $7,447 $8,225 $15,673
Nebraska 72,625 $13,159 $6,972 $19,818
Nevada 68,891 $11,198 $3,036 $14,234
New Hampshire 29,891 $4,629 $9,805 $14,434
New Jersey 248,055 $10,394 $6,990 $17,384
New Mexico 73,343 $20,041 $3,410 $23,451
New York 456,600 $15,345 $6,540 $21,885
North Carolina 409,585 $13,380 $5,340 $18,720
North Dakota 33,418 $10,326 $9,593 $19,919
Ohio 341,812 $8,190 $10,951 $19,140
Oklahoma 123,283 $9,471 $9,132 $18,603
Oregon 128,457 $8,625 $9,700 $18,325
Pennsylvania 289,408 $6,833 $11,465 $18,298
Rhode Island 29,193 $7,821 $10,449 $18,270
South Carolina 175,188 $9,290 $11,114 $19,760
South Dakota 31,182 $10,015 $9,746 $18,993
Tennessee 179,740 $14,561 $8,125 $22,396
Texas 1,044,485 $12,790 $7,950 $20,740
Utah 133,372 $12,955 $7,343 $20,298
Vermont 19,987 $5,345 $16,214 $20,919
Virginia 296,469 $10,153 $8,496 $18,558
Washington 199,389 $13,034 $7,251 $20,285
West Virginia 58,308 $7,392 $8,503 $14,529
Wisconsin 199,417 $10,032 $8,250 $18,281
Wyoming 20,487 $21,109 $4,233 $25,304
D.C. 3,211 $21,521 $3,609 $25,130
U.S. 10,399,511 $11,683 $7,510 $19,092
Notes:
  1. Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
  2. 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.
  3. 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.
  4. 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.
  5. The U.S. calculation does not include the District of Columbia.
  6. Fiscal year 2024 FTE enrollment is estimated for Arkansas; net tuition and fee revenue is estimated for Pennsylvania. Fiscal year 2024 state-level education appropriations include estimated uncategorizable state support for New Mexico and South Carolina.
  7. 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.
  8. 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

IL

Education appropriations per FTE in Illinois continue to be an outlier at roughly twice the U.S. average and 59.9% above 2000 levels (the U.S. high point). 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 34.6% in 2024. Of the $2.14 billion in pension payments in 2024, 77.9% was used for past unfunded liabilities, not current employees. This means that even after considering additional funding from local governments, over one quarter (27.0%) of all education appropriations in Illinois are now spent on past pension obligations and are not available for use in 2024. This translates to $6,881 per FTE student, more than the entire per-FTE appropriations in Arizona, Delaware, New Hampshire, Pennsylvania, 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 slightly above those at two-year public institutions in 2019 ($9,490 per FTE and $9,319 per FTE, respectively). That trend reversed in 2021 and has continued with education appropriations at two-year institutions having exceeded those at four-year institutions by $79 per FTE in 2024. 16 16There 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 ($3,712 per FTE compared to $32 at four-year institutions), but do not include research, agricultural extension, and medical funding (RAM), of which an additional $2,161 per FTE was exclusively appropriated to four-year institutions in 2024. In addition, SHEF metrics use FTE enrollment rather than student headcount, and two-year institutions have a far greater proportion of part-time students. 17 17According 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. VIEW ALL FOOTNOTES

Education appropriations per FTE throughout the report include federal stimulus funding. In 2024, two-year institutions received $27 per FTE in federal stimulus for public operating, and four-year institutions received $38 per FTE.

Unlike education appropriations, net tuition and fee revenue is very different at two- and four-year institutions. On average, two-year institutions received $2,728 in net tuition revenue per FTE, or 26.1% of the average net tuition revenue per FTE at four-year institutions ($10,446). As a result, 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 2019-2024 (Constant Dollars)


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Notes:
  1. 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.
  2. 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.
  3. Full-time equivalent enrollment converts student credit hours to full-time, academic year students, but excludes medical students.
  4. 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.
  5. Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
  6. 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.

Financial Aid Share

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. 18 18Trends 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. 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 consistently over time.

  • State financial aid to public institutions has increased 93.4%, from $597 in 2001 (when these data were first collected) to $1,155 in 2024. 
  • Public aid as a portion of all education appropriations peaked at 10.1% in 2012. Since, it has fluctuated between a low of 9.2% in 2017 and a high of 9.9% in 2021. After a decline in 2022, public aid as a portion of education appropriations increased for two consecutive years returning to 9.9% in 2024. 19 19For 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. VIEW ALL FOOTNOTES
Figure 2.5

Public Higher Education State Financial Aid per FTE and as a Percentage of Education Appropriations, U.S., FY 2001-2024 (Constant Dollars)


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Notes:
  1. 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.
  2. 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.
  3. 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.
  4. Constant dollars adjusted to the latest year of data available by the Higher Education Cost Adjustment (HECA).
  5. Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
  6. 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.

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 (from 20.9% to 39.3%) since 1980. Historically, the student share has increased most rapidly during periods of economic recession, shifting more of 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 substantially declined since 2019, the year prior to the COVID-19 economic downturn, decreasing from 45.4% to 39.3% in 2024. 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 2013 high point, the student share has decreased in 10 of the last 11 years, totaling a decline of 8.2 percentage points to 39.3% in 2024. The student share has declined 6.1 percentage points since 2019, with the largest decrease ever observed in the SHEF dataset having occurred in 2021 (1.7 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 45.4%, the student share declined 7.4 percentage points in the Northeast, 6.7 in the South, 4.9 in the West, and 4.7 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. (Figure 2.6). 

Figure 2.6

Net Tuition as a Percentage of Total Education Revenue, U.S., FY 1980-2024


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Notes:
  1. 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.
  2. Regional averages are based on the U.S. Census designation.
Source(s):
  • State Higher Education Executive Officers Association

Throughout the rest of the SHEF report, we more closely examine current and long-term U.S., state, and sector-level trends in each individual component of state funding, enrollment, net tuition, and total revenue.

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