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.

While the main body of the SHEF report reviews financial and enrollment trends in American higher education without editorial commentary, trends from the last two recessions indicate that higher education will likely be severely impacted by the current economic situation. SHEEO is deeply concerned about the effects of additional decreases in state support and increasing costs at public institutions. Please see the update on COVID-19 and the Recession for additional information.

Report Highlights

State and local funding for all higher education reached $100 billion for the first time in fiscal 2019. State tax and non-tax appropriations accounted for 88 percent of those funds, with local tax appropriations contributing 11 percent. The vast majority of state and local support for higher education went to general operations at public institutions (78 percent). Roughly 10 percent of funding was used for research, agricultural extension programs, and medical schools. Another 8.5 percent was allocated for student financial aid at public institutions. Less than 3 percent of all state and local funding supported independent (private) institutions, and most of those funds went to student financial aid.

 

Full-Time Equivalent (FTE) Enrollment i i Net full-time equivalent (FTE) enrollment Full-time equivalent (FTE) enrollment converts student credit hours to full-time academic year students. FTE excludes medical students. VIEW ALL DATA DEFINITIONS

In recent years, enrollment has remained relatively stable both nationally and across states. There were just under 11 million FTE enrolled students in 2019. FTE enrollment ranged from less than 17,000 in Alaska to 1.56 million in California.

2019 is the eighth straight year of FTE enrollment declines following substantial enrollment increases during the Great Recession. Annual enrollment declines have been less than 0.5 percent for the last three years.

Education Appropriations Per FTE i i Education appropriations Education appropriations measure state and local support available for public higher education operating expenses and exclude research, hospitals, and medical education. VIEW ALL DATA DEFINITIONS

Nationally, public institutions received an average of $8,196 in education appropriations per FTE, a 2.4 percent increase above inflation in the last year. Across the states, per-FTE appropriations ranged from less than $3,000 in New Hampshire and Vermont to almost $19,000 in Wyoming.

Although 2019 marks the seventh straight year of per-FTE increases in education appropriations, these funds remain 8.7 percent below pre-recession levels. Only seven states have fully recovered, and another seven remain 30 percent below funding before the Great Recession.

State Public Financial Aid Per FTE i i State public financial aid State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. These funds are included in education appropriations. VIEW ALL DATA DEFINITIONS

State public financial aid per FTE increased 4.0 percent from 2018 to 2019 and reached an all-time high of $808 per FTE. These funds made up 9.9 percent of all education appropriations, the largest proportion since SHEF began.

Across the U.S., state financial aid for students attending public institutions has increased 34.1 percent per FTE since the start of the Great Recession. State public financial aid in 2019 ranged from under $100 per FTE in five states (Arizona, Hawaii, Iowa, Michigan, and Montana) to over $2,000 per FTE in Louisiana and Tennessee.

Net Tuition Revenue Per FTE i i Net tuition revenue Net tuition revenue is the total amount of tuition and fees, minus state and institutional financial aid and medical tuition and fees. Net tuition is affected by changes in tuition rates as well as proportional differences in out-of-state, international, and graduate student enrollment. VIEW ALL DATA DEFINITIONS

Public institutions averaged $6,902 in net tuition revenue from in-state and out-of-state students in 2019. Net tuition revenue per FTE varied by state, from below $3,000 per FTE in California and Florida to nearly $17,000 in Delaware.

Following rapid increases in net tuition revenue in every state during the Great Recession, net tuition revenue declined for the first time this year since 2008. This decline was only 0.1 percent ($6 per FTE) and is entirely explained by the large increase in student financial aid, which is deducted from net tuition revenue.

Total Education Revenues Per FTE i i Total education revenues Total education revenues refer to the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service. VIEW ALL DATA DEFINITIONS

Total education revenues increased for the seventh year straight, reaching an all-time high of $15,018 per FTE (a 1.3 percent increase from 2018). This is the first time that nationally, public institutions have more than $15,000 per FTE in total revenues.

This trend does not hold for all institutions or states. Many institutions have been unable to increase tuition revenue to offset historical declines in state funding, and 16 states have not surpassed pre-recession levels of total education revenues. Total education revenues range from a low of $10,262 in Florida to almost $23,000 in Wyoming.

Student Share i i Student share The student share is a measure of the proportion of total education revenues at public institutions coming from net tuition revenue. VIEW ALL DATA DEFINITIONS

Throughout the SHEF dataset, the student share has risen from 20.9 percent in 1980 to 46 percent in 2019. Student share generally rises during economic recessions and levels off during economic recoveries. The sharpest increase in student share occurred during and immediately following the Great Recession.

In over half of all states, tuition revenue comprises more than 50 percent of total revenues. Three states had a student share above 75 percent in 2019 (Delaware, New Hampshire, and Vermont). Conversely, three states still have a student share of less than 25 percent (California, New Mexico, and Wyoming).

Implications

State and local funding for all higher education surpassed $100 billion for the first time in 2019, and total education revenues at public institutions reached an all-time high, exceeding $15,000 per FTE for the first time. Net tuition revenue per FTE declined this year, ending a decade-long trend of increases. On their surface, these trends suggest a healthy funding environment for public higher education institutions. The reality is much more complex. In more than half of all states, student tuition dollars now make up more than 50 percent of total education revenues at public institutions. Despite seven years of funding increases following the Great Recession, states have only recovered two-thirds of their lost state funding, and the average public institution still receives fewer education appropriations per FTE than in almost every pre-recession year in the SHEF dataset (which goes back to 1980).

The national numbers obscure very different funding situations across the United States. Seven states (Alaska, California, Hawaii, Nebraska, New York, Oregon, and Wyoming) have met or exceeded pre-recession education appropriation levels after declining during the Great Recession. However, another seven states (Alabama, Arizona, Delaware, Louisiana, Mississippi, Oklahoma, and Pennsylvania) remain more than 30 percent below their pre-recession education appropriations per FTE. In three Western states, student tuition dollars comprise less than 25 percent of total education revenues. On the other hand, student tuition accounts for over 75 percent of all revenues in three states in the Northeast.

Amidst these changes, many states have adopted ambitious attainment goals and committed to reducing inequality in educational attainment. These goals can only be met by addressing affordability concerns and ensuring that institutions have the resources to better serve students of color and other historically underserved groups. It is critical for states to continue to push for increased equity in attainment through the ups and downs of the economic cycle. Yet it is not clear what will happen to public institution revenues and student affordability if states continue to use higher education as a budgetary pressure release valve during the next recession.

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 these public revenues are provided, including general institutional operating expenses, student financial assistance, support for centrally funded research, medical education, and extension programs.

Higher education support is the third largest budget area of state spending. Still, the proportion of general funds allocated to higher education has steadily declined over time, from 12.9 percent in 1995 to 9.6 percent in 2019. 1 1National Association of State Budget Officers. (2019). State expenditure report: Fiscal years 2017-2019. NASBO. https://www.nasbo.org/reports-data/state-expenditure-report VIEW ALL FOOTNOTES 2 2Unlike the SHEF data, NASBO expenditures exclude employer contribution to pensions and health benefits. 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.

Sources

This section provides data and analysis of the sources of state and local government support for higher education over the last 15 years (2004-2019). The funding amounts in this section are not adjusted for inflation or enrollment.

National Trends

Table 1.1 shows that state and local government funding for higher education totaled $103 billion in fiscal year 2019. This was the first year in history with above $100 billion in state and local support for higher education, following a nominal increase of 4.3 percent over 2018. States contributed $92 billion, while local governments in 29 states contributed just over $11 billion, representing increases of 4.4 percent and 3.6 percent, respectively. The largest source of funding was state tax appropriations, i i State tax appropriations Appropriations from state government taxes for public and private higher education institution and agency annual operating expenses, excluding capital outlay (for new construction or debt retirement) and revenue from auxiliary enterprises. VIEW ALL DATA DEFINITIONS which accounted for $87 billion or 84 percent of total funding. Non-tax support (mostly from state lotteries) i i Non-tax support 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. VIEW ALL DATA DEFINITIONS increased 10.4 percent and totaled nearly $4 billion. Non-appropriated support, state-funded endowments, and other sources of state funding altogether increased 8.1 percent and contributed an additional $965 million.

Table 1.1

Sources of State and Local Higher Education Funding in the U.S., FY 2004-2019 (Unadjusted Dollars, In Millions)

Source 2004 2009 2014 2017 2018 2019 2019 % Distribution
ARRA Funds $0 $2,268 $0 $0 $0 $0 0.0%
Tax Appropriations $60,352 $74,459 $73,547 $82,462 $83,892 $87,322 84.4%
Non-Tax Support $1,641 $2,709 $3,031 $3,345 $3,538 $3,905 3.8%
Non-Appropriated Support $83 $81 $92 $122 $126 $140 0.1%
State-Funded Endowment Earnings $276 $398 $530 $541 $547 $600 0.6%
Other $92 $207 $323 $199 $220 $225 0.2%
(-) Funds Not Available for Use $52 $592 $81 $158 $76 $61 0.1%
Total State Support $62,391 $79,530 $77,442 $86,511 $88,245 $92,130 89.1%
Local Tax Appropriations $6,624 $8,354 $9,337 $10,406 $10,929 $11,317 10.9%
Total State and Local Support $69,015 $87,884 $86,779 $96,917 $99,174 $103,447 100.0%
Notes:
  1. Other includes multiyear appropriations from previous years and funds not classified in one of the other source categories.
  2. Funds not available for use include appropriations that were returned to the state, and portions of multiyear appropriations to be spread over other years.
  3. Total state support is the sum of American Recovery and Reinvestment Act (ARRA) funds, 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

Figure 1.1 shows how the sources of state and local funding have become more diversified since the Great Recession. Before 2008, tax appropriations routinely accounted for 87 to 88 percent of higher education support. Since then, tax appropriations are closer to 84 to 85 percent, and the portion of revenue from local appropriations increased by 1.8 percentage points while non-tax sources increased 1.2 percentage points.

State Spotlight : Arizona

AZ

Between 2001 and 2015, state tax appropriations in Arizona declined from 73.9 percent to 47.6 percent of all higher education funding. During this time, the portion of funding from local appropriations increased from 25.6 percent to 46.8 percent. This growing reliance on local appropriations reflected a steady disinvestment by the state in public two-year institutions.

In fiscal year 2016, the state eliminated all state funding for the two largest community colleges. 4 4Arizona Joint Budget Committee. (2018). Arizona community colleges general fund appropriations: FY 2010 through FY 2019. https://www.azleg.gov/jlbc/accgfapp.pdf VIEW ALL FOOTNOTES As a result, local appropriations reached 50 percent of all funding for the first time and have essentially remained at that level through 2019, making Arizona the only state that has a higher portion of funding coming from local sources than state tax appropriations.

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Figure 1.1

Distribution of State and Local Higher Education Funding Sources, U.S., FY 2004-2019

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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. Other includes non-appropriated funds, multiyear appropriations from previous years, and funds not classified in one of the other source categories.
  3. In all years, endowment and other sources accounted for less than 1 percent of U.S. state and local funding for higher education.
Source(s):
  • State Higher Education Executive Officers Association

State Comparisons

Table and Figure 1.2 show the states with funding sources other than state tax appropriations. The 10 states not listed in this table (and Washington, D.C.) rely on tax appropriations as the only major source of funding for higher education. 

Arizona is the only state where the majority of higher education funding did not come from state tax appropriations. Nearly half of higher education funding in Arizona comes from local appropriations. i i Local appropriations The sum of all tax appropriations from any government entity below the state level to public institutions for operating expenses. Excludes any grants from local nonprofit organizations such as chambers of commerce, charitable foundations, and other entities. VIEW ALL DATA DEFINITIONS Kansas, Michigan, and Oregon were the only other states that relied on local appropriations for at least 20 percent of higher education funding. Twenty-one states received no local tax appropriations. 

Several Southern states that have financial aid programs funded with lottery dollars were also less reliant on tax appropriations. Florida, Georgia, Kentucky, and South Carolina all relied on non-tax support i i Non-tax support 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. VIEW ALL DATA DEFINITIONS for at least 20 percent of higher education funding. 

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

  • Many states are increasingly reliant on local appropriations. Since 2004, the proportion of total funding from local appropriations has increased in 24 states. In seven states (Arizona, Iowa, Kansas, Nebraska, New Mexico, Oregon, and Texas), this proportion has increased by at least 5 percentage points.

  • Twenty states had increases in non-tax appropriations from 2004 to 2019. In five Southern states (Arkansas, Florida, Kentucky, South Carolina, and Tennessee), all with large lottery-funded student financial aid programs, non-tax support as a proportion of total funding increased by more than 5 percentage points.

Figure 1.2

Percentage of State and Local Higher Education Funding From Local Appropriations by State, FY 2019

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Notes:
  1. Excludes states with no funding from the selected source.
  2. Total state and local support is the sum of ARRA (American Recovery and Reinvestment Act) funds, 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.
  3. Constant dollars adjusted by the Higher Education Cost Adjustment (HECA).
Source(s):
  • State Higher Education Executive Officers Association
Table 1.2

Sources of State and Local Higher Education Funding by State, FY 2019 (Unadjusted Dollars)

State % Tax Appropriations

Tax appropriations are any appropriations from state government taxes to institutions for operations and other higher education activities.

 % Non-Tax Support

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.

 % Local Appropriations

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.

 % Endowment, Non-Appropriated, and Other Sources Total State and Local Support (Thousands)

State and local support is a broad measure of how much money the state provides to support all higher education. This measure does not include any sums for capital outlays and debt service or sums derived from federal sources, student tuition and fees, or auxiliary enterprises.

Alabama 99.7% 0.0% 0.3% 0.0% $1,662,998
Alaska 99.8% 0.0% 0.2% 0.0% $353,149
Arizona 43.7% 0.3% 49.5% 6.6% $1,792,832
Arkansas 86.8% 9.3% 3.6% 0.4% $1,033,281
California 80.5% 1.8% 17.7% 0.0% $19,183,591
Colorado 90.0% 2.3% 7.7% 0.0% $1,076,848
Connecticut 100.0% 0.0% 0.0% 0.0% $1,131,758
Florida 77.3% 22.2% 0.0% 0.5% $5,347,532
Georgia 75.8% 23.0% 0.0% 1.2% $3,635,835
Hawaii 99.5% 1.2% 0.0% 0.0% $778,348
Idaho 90.9% 0.0% 6.0% 3.1% $535,165
Illinois 84.1% 0.0% 15.9% 0.0% $5,057,380
Indiana 99.5% 0.5% 0.0% 0.0% $1,779,142
Iowa 88.8% 0.0% 11.2% 0.0% $918,526
Kansas 74.9% 1.2% 24.0% 0.0% $1,059,915
Kentucky 77.0% 20.4% 2.3% 0.4% $1,171,685
Louisiana 98.2% 0.0% 0.0% 1.8% $1,177,144
Maine 97.8% 2.2% 0.0% 0.0% $307,979
Maryland 82.3% 0.4% 17.3% 0.0% $2,501,580
Michigan 77.9% 0.0% 22.1% 0.0% $2,509,053
Mississippi 93.3% 0.3% 6.3% 0.1% $965,751
Missouri 75.7% 11.0% 13.8% 2.1% $1,158,879
Montana 95.5% 0.0% 3.4% 1.1% $253,242
Nebraska 78.4% 3.1% 18.6% 0.0% $936,301
New Jersey 91.3% 0.0% 8.7% 0.0% $2,361,103
New Mexico 78.0% 4.2% 15.4% 2.4% $1,027,091
New York 85.3% 0.0% 14.7% 0.0% $7,204,864
North Carolina 93.7% 0.2% 5.8% 0.4% $4,584,955
Ohio 92.0% 0.0% 8.0% 0.0% $2,500,499
Oklahoma 85.1% 3.2% 5.4% 6.3% $879,547
Oregon 77.6% 0.4% 22.1% 0.0% $1,134,144
Pennsylvania 93.3% 0.0% 6.7% 0.0% $1,883,040
South Carolina 60.4% 33.3% 6.3% 0.0% $1,253,542
South Dakota 97.3% 2.1% 0.0% 0.6% $238,879
Tennessee 82.9% 17.6% 0.0% 0.6% $1,924,837
Texas 73.6% 0.7% 19.6% 6.1% $9,426,196
Utah 99.3% 0.7% 0.0% 0.0% $1,113,971
Vermont 95.8% 0.0% 0.0% 4.2% $96,188
Virginia 98.9% 0.0% 1.1% 0.0% $2,143,403
West Virginia 92.3% 7.7% 0.0% 0.0% $491,889
Wyoming 87.1% 0.0% 8.2% 4.6% $419,371
U.S. 84.4% 3.8% 10.9% 0.9% $103,447,156
Notes:
  1. Connecticut, Delaware, District of Columbia, Massachusetts, Minnesota, Nevada, New Hampshire, North Dakota, Rhode Island, Washington, and Wisconsin are excluded from this table because tax appropriations are the only major source of state and local higher education funding in those states.
  2. 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.
  3. Total state and local support is the sum of ARRA funds, 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.
Source(s):
  • State Higher Education Executive Officers Association

Uses

This section provides data and analysis of the uses of state and local government support for higher education over the last 15 years (2004-2019). As with the prior section, the funding amounts in this section are not adjusted for inflation or enrollment.

National Trends

Table 1.3 shows that nationally, $80.8 billion or 78.1 percent of state and local higher education funding was allocated to support general operating expenses at public institutions. i i General operating The portion of state and local support appropriated directly to public institutions for the purposes of general operations. VIEW ALL DATA DEFINITIONS This represents an increase of 4.2 percent over fiscal 2018. Other uses of funding include:

  • Special purpose appropriations for research, agricultural extension programs, and medical education (RAM). i i RAM RAM is the portion of total state and local appropriations allocated for the direct operations of research, agriculture, public health care services, and medical schools. VIEW ALL DATA DEFINITIONS RAM funds increased 2.8 percent over 2018 to reach $10.7 billion.

  • Student financial aid, i i Total student financial aid Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans. VIEW ALL DATA DEFINITIONS which increased 5.8 percent to $11.4 billion. Nearly 78 percent of total student aid was allocated to students attending public institutions.

  • Operating support for independent institutions, i i Independent operating Sums of state support allocated to independent (private) institutions for operating expenses. VIEW ALL DATA DEFINITIONS which increased 4.7 percent to $225 million, and support for non-credit and continuing education, i i Non-credit State funding for students in continuing or adult education courses (non-credit) and non-credit extension courses which are not part of a regular program leading to a degree or certificate. VIEW ALL DATA DEFINITIONS which increased 5.7 percent to $315 million. Together, these uses of state and local funding constitute 0.5 percent of higher education funding.

Table 1.3

Uses of State and Local Higher Education Funding in the U.S., FY 2004-2019 (Unadjusted Dollars, In Millions)

Use 2004 2009 2014 2017 2018 2019 2019 % Distribution
General Public Operations $53,781 $68,785 $67,208 $76,270 $77,460 $80,784 78.1%
Research - Agriculture - Medical (RAM) $9,096 $10,516 $10,049 $10,243 $10,449 $10,745 10.4%
State Public Financial Aid $3,678 $5,481 $6,685 $7,499 $8,337 $8,838 8.5%
Out-of-State Student Aid $33 $39 $37 $34 $33 $34 0.0%
Independent Student Aid $1,980 $2,498 $2,296 $2,319 $2,382 $2,508 2.4%
Independent Operating Support $259 $253 $188 $215 $215 $225 0.2%
Non-Credit and Continuing Education $188 $313 $314 $337 $298 $315 0.3%
Total Student Financial Aid $5,691 $8,018 $9,018 $9,852 $10,752 $11,380 11.0%
Total Independent Support $2,238 $2,751 $2,485 $2,533 $2,597 $2,733 2.6%
Total State and Local Support $69,015 $87,884 $86,779 $96,917 $99,174 $103,447 100.0%
Notes:
  1. General public operations are any state and local support for higher education not allocated to one of the subsequent categories.
  2. Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans.
  3. Total independent support is the sum of state funds for private institutions (independent student aid and independent operating support).
Source(s):
  • State Higher Education Executive Officers Association

Figure 1.3 shows that the most significant change in uses of higher education funding has been with the portion of funding allocated to public financial aid, which increased from 5 percent in 2004 to 9 percent of all state and local support in 2019. Financial aid to students attending independent or out-of-state institutions declined by 1 percentage point in 2016 and has remained at 2 percent of total funding since then.

Overall, except for a growing portion of funding allocated to financial aid, the uses of state and local higher education funding have remained relatively constant on a national level over time. While the percent of funding allocated to general operations at public institutions dipped to 77 percent following the Great Recession, it rebounded to at least 78 percent in each year since 2015.

Figure 1.3

Distribution of State and Local Higher Education Funding Uses, U.S., FY 2004-2019

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Notes:
  1. In all years, other uses accounted for less than 1 percent of U.S. state and local funding for higher education.
  2. Other uses include funding for non-credit and independent operating.
  3. Other financial aid includes any state appropriated student financial aid to students attending independent (private) or out-of-state institutions.
Source(s):
  • State Higher Education Executive Officers Association

State Comparisons

Table and Figure 1.4 show significant variation in the uses of state and local funding for higher education.

Twenty states allocated at least 80 percent of funding for general operations at public institutions. Only Louisiana and Washington, D.C., allocated less than half of all funding to general operations. Delaware, Michigan, New Hampshire, and Rhode Island each allocated at least 90 percent of funding to general operations at public institutions.

Support for research, agricultural extension programs, and medical education ranged from zero percent in Rhode Island to 29 percent in West Virginia. Thirty-six states allocated at least 10 percent of funding to these areas in 2019.

State support for student financial aid i i Total student financial aid Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans. VIEW ALL DATA DEFINITIONS ranged from zero percent in New Hampshire to 45.8 percent in Washington, D.C. 5 5Washington, D.C., was not able to provide data on financial aid for students attending in-district public institutions. VIEW ALL FOOTNOTES Five states (Arizona, Hawaii, Michigan, Montana, and New Hampshire) allocated less than 1 percent of funding to student financial aid. Seven states (Indiana, Kentucky, Louisiana, New Jersey, South Carolina, Tennessee, and Vermont) allocated more than 20 percent of funding to financial aid.

Support for independent institutions i i Independent support Independent support refers to support for independent institutions or the students attending them. It is the sum of state allocations for independent operating expenses and financial aid awarded to students attending independent institutions. VIEW ALL DATA DEFINITIONS is generally one of the smallest allocations of state and local funding. Only seven states (Indiana, Iowa, Kentucky, New Jersey, New York, Pennsylvania, and South Carolina) gave more than 5 percent of funding to these institutions. In these states, funding for independent institutions was predominantly allocated to student financial aid.

Figure 1.4

Percentage of State and Local Higher Education Funding Used for Research - Agriculture - Medical (RAM) by State, FY 2019

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Notes:
  1. Excludes states with no funding allocated to the selected use.
  2. Total state and local support is the sum of ARRA (American Recovery and Reinvestment Act) funds, 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.
  3. Constant dollars adjusted by the Higher Education Cost Adjustment (HECA).
Source(s):
  • State Higher Education Executive Officers Association

Over the last 15 years, there were substantial shifts in proportion of state funding allocated to general operating and financial aid:

  • From 2004 to 2019, 36 states increased the portion of total state and local support they appropriated to student financial aid. Twenty-three of those states had an increase of more than 3 percentage points, and three states had an increase above 10 percentage points (Louisiana, New Jersey, and Tennessee).

  • More than half of all states (31) decreased their general operating appropriations as a proportion of total funding from 2004 to 2019. The largest decreases (all above 10 percentage points) were in Louisiana, New Jersey, and Tennessee—the same group of states with the largest shift toward student financial aid.

State Spotlight : Washington

WA

Washington is one of the few states with a recent increase in general operating allocations as a percent of all support. This change is primarily due to a statewide tuition rate decrease in 2016 and 2017, during which tuition rates declined by 5 percent at Washington community colleges and between 15 and 20 percent at four-year institutions. To pay for the tuition reduction, the state appropriated a more than $200 million increase in general operating support and reduced financial aid funding to public institutions. 6 6W.A. Legis. S.B. 5954. 3rd Special Session 2015. http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Session%20Laws/Senate/5954-S.SL.pdf?q=20200225085531 VIEW ALL FOOTNOTES These funding shifts resulted in a 3.5 percentage point increase in the portion of funding going to general operations.

This change in the uses of state funding is expected to revert in the coming years, at least partially. In 2019, Washington enacted a significant overhaul of the state’s need-based aid program to ensure all eligible students will receive grants. State financial aid appropriations are expected to increase significantly in the coming years.

Table 1.4

Uses of State and Local Higher Education Funding by State, FY 2019 (Unadjusted Dollars)

State % General Public Operations

The portion of state and local support appropriated directly to public institutions for the purposes of general operations.

 % Research - Agriculture - Medial (RAM)

RAM is the portion of total state and local appropriations allocated for the direct operations of research, agriculture, public health care services, and medical schools.

 % Total Student Financial Aid

Total student financial aid is the sum of any state appropriated student financial aid for public, independent, and out-of-state institutions, excluding loans.

 % Total Independent Support

Independent support refers to support for independent institutions or the students attending them. It is the sum of state allocations for independent operating expenses and financial aid awarded to students attending independent institutions.

 Total State and Local Support (Thousands)

State and local support is a broad measure of how much money the state provides to support all higher education. This measure does not include any sums for capital outlays and debt service or sums derived from federal sources, student tuition and fees, or auxiliary enterprises.

Alabama 67.0% 24.5% 6.8% 1.2% $1,662,998
Alaska 86.0% 8.7% 5.4% 0.4% $353,149
Arizona 88.1% 11.0% 0.9% 0.0% $1,792,832
Arkansas 66.0% 21.9% 12.1% 1.2% $1,033,281
California 83.2% 5.3% 11.5% 1.5% $19,183,591
Colorado 70.6% 13.7% 15.7% 0.9% $1,076,848
Connecticut 74.6% 22.4% 3.0% 0.5% $1,131,758
Delaware 90.0% 3.7% 6.2% 0.1% $237,444
Florida 72.1% 8.8% 18.6% 4.7% $5,347,532
Georgia 69.7% 10.1% 19.6% 1.7% $3,635,835
Hawaii 85.6% 13.8% 0.6% 0.0% $778,348
Idaho 87.1% 10.1% 2.8% 0.4% $535,165
Illinois 87.4% 3.8% 7.6% 3.1% $5,057,380
Indiana 65.2% 14.2% 20.7% 5.7% $1,779,142
Iowa 79.7% 14.2% 6.2% 5.2% $918,526
Kansas 78.6% 19.2% 2.1% 0.8% $1,059,915
Kentucky 66.6% 11.2% 20.8% 6.3% $1,171,685
Louisiana 48.8% 23.2% 28.0% 2.0% $1,177,144
Maine 85.1% 10.0% 4.9% 1.0% $307,979
Maryland 82.3% 11.6% 3.9% 3.0% $2,501,580
Massachusetts 89.5% 3.6% 6.6% 2.6% $1,606,272
Michigan 93.4% 6.1% 0.5% 0.3% $2,509,053
Minnesota 74.7% 12.6% 12.7% 4.6% $1,630,558
Mississippi 68.0% 27.7% 4.4% 0.4% $965,751
Missouri 87.7% 1.2% 11.1% 2.2% $1,158,879
Montana 84.6% 14.8% 0.6% 0.0% $253,242
Nebraska 75.9% 22.2% 1.9% 0.4% $936,301
Nevada 70.6% 14.3% 15.1% 0.0% $655,333
New Hampshire 90.1% 9.9% 0.0% 0.0% $128,543
New Jersey 67.0% 11.9% 21.1% 5.9% $2,361,103
New Mexico 84.8% 12.4% 2.3% 0.0% $1,027,091
New York 77.7% 6.4% 15.3% 5.3% $7,204,864
North Carolina 78.4% 11.7% 6.5% 3.7% $4,584,955
North Dakota 73.3% 21.7% 5.0% 0.7% $358,491
Ohio 84.7% 8.8% 5.4% 2.1% $2,500,499
Oklahoma 70.7% 15.2% 14.0% 1.1% $879,547
Oregon 81.8% 10.0% 8.2% 0.5% $1,134,144
Pennsylvania 75.5% 4.2% 18.6% 10.0% $1,883,040
Rhode Island 91.9% 0.0% 7.5% 1.6% $208,435
South Carolina 56.7% 11.2% 31.0% 7.9% $1,253,542
South Dakota 76.2% 19.5% 4.4% 0.6% $238,879
Tennessee 59.0% 17.0% 24.0% 4.9% $1,924,837
Texas 79.9% 16.3% 3.8% 0.9% $9,426,196
Utah 85.1% 12.0% 2.5% 0.0% $1,113,971
Vermont 58.9% 20.1% 21.0% 4.8% $96,188
Virginia 74.7% 10.2% 13.6% 4.6% $2,143,403
Washington 78.3% 5.1% 16.6% 2.4% $2,037,367
West Virginia 52.9% 29.0% 18.0% 1.8% $491,889
Wisconsin 79.4% 10.7% 9.5% 2.4% $1,573,280
Wyoming 81.9% 10.6% 6.8% 0.0% $419,371
U.S. 78.1% 10.4% 11.0% 2.6% $103,447,156
District of Columbia 47.5% 6.8% 45.8% 1.6% $87,353
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 operating is the portion of state and local support appropriated directly to public institutions for the purposes of general operations.
  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.
  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 American Recovery and Reinvestment Act (ARRA) funds, 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.
Source(s):
  • State Higher Education Executive Officers Association

This section explores 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 revenue. From this section on, the SHEF report highlights trends in higher education revenues and enrollment for public institutions only. Throughout the report, a key set of derived metrics is analyzed first at the U.S. level and then across states. 7 7It is important to note that the U.S. totals 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 FTE across the 50 states. It is not the average of each of the 50 states’ individual per-FTE calculations. VIEW ALL FOOTNOTES Finance metrics are provided on a per-student basis (using FTE enrollment) and are modified using three adjustments.

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).

 

Table 2.1 shows the effects of 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 revenue from students and families, and enrollment over time. Note that the state adjustments (COLI and EMI) do not impact the U.S. average. 

Table 2.1

Impact of Inflation and Enrollment on SHEF Metrics, U.S., FY 1994-2019

1994 2004 2009 2014 2018 2019 1-Year % Change 5-Year % Change 10-Year % Change 15-Year % Change 25-Year % Change
Unadjusted Dollars (Millions)
State Public Financial Aid N/A $3,678 $5,481 $6,685 $8,337 $8,838 6.0% 32.2% 61.2% 140.3% N/A
General Public Operations N/A $53,781 $68,785 $67,208 $77,460 $80,784 4.3% 20.2% 17.4% 50.2% N/A
Education Appropriations $36,368 $57,459 $74,266 $73,894 $85,797 $89,621 4.5% 21.3% 20.7% 56.0% 146.4%
Net Tuition Revenue $16,569 $30,437 $44,311 $64,778 $74,083 $75,476 1.9% 16.5% 70.3% 148.0% 355.5%
Total Education Revenue $52,937 $87,638 $118,100 $137,917 $159,044 $164,225 3.3% 19.1% 39.1% 87.4% 210.2%
Constant Inflation Adjusted Dollars (Millions)
HECA 0.5270 0.7125 0.8226 0.9025 0.9776 1.0000 2.3% 10.8% 21.6% 40.3% 89.8%
State Public Financial Aid N/A $5,162 $6,663 $7,408 $8,528 $8,838 3.6% 19.3% 32.6% 71.2% N/A
General Public Operations N/A $75,479 $83,622 $74,471 $79,237 $80,784 2.0% 8.5% -3.4% 7.0% N/A
Education Appropriations $69,014 $80,640 $90,285 $81,879 $87,765 $89,621 2.1% 9.5% -0.7% 11.1% 29.9%
Net Tuition Revenue $31,442 $42,717 $53,869 $71,779 $75,783 $75,476 -0.4% 5.2% 40.1% 76.7% 140.0%
Total Education Revenue $100,456 $122,995 $143,574 $152,821 $162,692 $164,225 0.9% 7.5% 14.4% 33.5% 63.5%
Constant Inflation Adjusted Dollars (Per FTE)
FTE Enrollment 8,123,619 9,685,811 10,749,886 11,194,139 10,969,226 10,934,890 -0.3% -2.3% 1.7% 12.9% 34.6%
State Public Financial Aid N/A $533 $620 $662 $777 $808 4.0% 22.1% 30.4% 51.7% N/A
General Public Operations N/A $7,793 $7,779 $6,653 $7,224 $7,388 2.3% 11.0% -5.0% -5.2% N/A
Education Appropriations $8,495 $8,326 $8,399 $7,314 $8,001 $8,196 2.4% 12.1% -2.4% -1.6% -3.5%
Net Tuition Revenue $3,870 $4,410 $5,011 $6,412 $6,909 $6,902 -0.1% 7.6% 37.7% 56.5% 78.3%
Total Education Revenue $12,366 $12,698 $13,356 $13,652 $14,832 $15,018 1.3% 10.0% 12.4% 18.3% 21.5%
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, excluding appropriations for research, hospitals, and medical education.
  3. State public financial aid is the part of education appropriations used for student financial aid at public institutions, excluding loans.
  4. General public operations are the portion of state and local support appropriated directly to public institutions for the purposes of general operations.
  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.
  7. The Higher Education Cost Adjustment (HECA) measures cost inflation experienced by colleges and universities.
Source(s):
  • State Higher Education Executive Officers Association

Education Revenues

The historical data in Figure 2.1 (the wave chart) demonstrate the impact of the economic cycle on public higher education revenues from 1994 to 2019.

National Trends

The red line in the wave chart shows FTE enrollment i i Net full-time equivalent (FTE) enrollment Full-time equivalent (FTE) enrollment converts student credit hours to full-time academic year students. FTE excludes medical students. VIEW ALL DATA DEFINITIONS , which has broadly increased over time from 6.85 million in 1980 to 10.93 million in 2019. Enrollment increases sharply during recessions and levels off or declines during economic recoveries—2019 is the eighth straight year of enrollment declines, although annual declines have been less than 1 percent since 2015.

The blue bars show change over time in education appropriations i i Education appropriations Education appropriations measure state and local support available for public higher education operating expenses and exclude research, hospitals, and medical education. VIEW ALL DATA DEFINITIONS per FTE enrolled student. Education appropriations are made up of general operating funds for public institutions and state public financial aid. The bars make the shape of a wave over time because per-student education appropriations generally fluctuate with the economic cycle. During economic recessions, state funding declines as states either cut funding to higher education or fail to keep up with changes in inflation and enrollment.

  • Historically, states would reinvest in public higher education as the economy recovered. Beginning with the tech bust in 2001, however, education appropriations declined and have never fully recovered.

  • Fiscal 2019 marks the seventh consecutive year of growth in education appropriations since 2012, the height of the Great Recession and the record low for state funding. Education appropriations in 2019 increased 2.4 percent beyond inflation, from $8,001 to $8,196.

  • States have only recovered about two-thirds (63.5 percent) of the total decline seen during the Great Recession.

The green bars in Figure 2.1 show net tuition revenue i i Net tuition revenue Net tuition revenue is the total amount of tuition and fees, minus state and institutional financial aid and medical tuition and fees. Net tuition is affected by changes in tuition rates as well as proportional differences in out-of-state, international, and graduate student enrollment. VIEW ALL DATA DEFINITIONS per FTE over time. Net tuition revenue measures tuition and fee revenue at public institutions, excluding state and institutional financial aid. Unlike education appropriations, net tuition has increased steadily over time, with an average annual increase 2.9 percent above inflation since the start of the SHEF dataset in 1980. However, after reaching an all-time high in 2018, tuition revenue per FTE decreased by 0.09 percent from $6,908 to $6,902 in 2019. Notably, this is only the third time there has been a decline in net tuition revenue per FTE since the SHEF dataset began in 1980. The two prior decreases were in 2000 and 2008, both years which immediately preceded economic recessions.

The total of the bars in the wave chart shows the approximate total education revenues i i Total education revenues Total education revenues refer to the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service. VIEW ALL DATA DEFINITIONS available to public institutions on a per-student level. Total education revenues combine the two primary sources of funding for public higher education—education appropriations and net tuition. In 2019, total revenues increased 1.3 percent to $15,018 per FTE, surpassing $15,000 for the first time in the SHEF dataset. On average, institutions have more than made up for declines in education appropriations by increasing net tuition revenues.

Figure 2.1

Public FTE Enrollment, Education Appropriations Per FTE, and Net Tuition Revenue Per FTE, U.S., FY 1994-2019 (Constant Dollars)

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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, excluding appropriations for research, hospitals, and medical education.
  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. Constant dollars adjusted 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

State Comparisons

Revenues in the SHEF wave chart vary considerably by state. Figure 2.2 and Table 2.2 provide an expanded view of the 2.1 wave chart for all states in fiscal 2019. States range in their total revenues (the sum of the blue and green bars) and in the distribution of revenues that comprise that total. For example, Florida has the lowest total revenues per FTE, but 73.5 percent of total revenues come from state funding. Louisiana has similar total revenues, but only 52 percent of funding comes from education appropriations. At the other end of the spectrum, Delaware and Wyoming have the two highest total revenues. Yet they could not be more different in where they get those funds: the state provides 24 percent of revenue in Delaware compared to 83 percent in Wyoming.

Figure 2.2

Education Appropriations and Net Tuition Revenue Per FTE by State, FY 2019 (Adjusted)

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Notes:
  1. Education appropriations are a measure of state and local support available for public higher education operating expenses, excluding appropriations for research, hospitals, and medical education.
  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. Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
  4. 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 2019 (Adjusted)

State FTE Enrollment

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

 Education Appropriations

Education appropriations measure state and local support available for public higher education operating expenses and exclude research, hospitals, and medical education.

 Net Tuition Revenue

Net tuition revenue is the total amount of tuition and fees, minus state and institutional financial aid and medical tuition and fees. Net tuition is affected by changes in tuition rates as well as proportional differences in out-of-state, international, and graduate student enrollment.

 Total Education Revenue

Total education revenues refer to the sum of education appropriations and net tuition, excluding net tuition revenue used for capital debt service.
Alabama 203,627 $7,031 $13,775 $19,844
Alaska 16,721 $16,164 $5,639 $21,803
Arizona 292,856 $5,247 $8,228 $13,133
Arkansas 112,722 $8,368 $7,067 $14,544
California 1,555,997 $9,078 $2,432 $11,511
Colorado 183,745 $4,653 $10,572 $15,225
Connecticut 83,793 $8,458 $10,997 $19,456
Delaware 36,410 $5,431 $16,988 $22,325
Florida 603,916 $7,542 $2,720 $10,262
Georgia 355,223 $9,638 $5,062 $14,698
Hawaii 35,254 $14,698 $5,032 $19,730
Idaho 54,421 $9,983 $4,286 $14,269
Illinois 310,561 $14,846 $7,498 $21,889
Indiana 246,301 $6,139 $9,861 $15,795
Iowa 123,666 $6,320 $10,499 $16,819
Kansas 132,253 $6,929 $7,304 $14,233
Kentucky 142,002 $7,444 $7,655 $15,099
Louisiana 163,932 $5,795 $5,250 $11,045
Maine 33,947 $7,684 $7,250 $14,934
Maryland 229,239 $7,824 $7,404 $15,228
Massachusetts 160,327 $7,859 $6,101 $13,960
Michigan 366,298 $7,152 $14,052 $21,204
Minnesota 184,359 $7,638 $9,403 $17,042
Mississippi 129,499 $6,637 $8,066 $14,704
Missouri 182,499 $7,238 $6,598 $13,836
Montana 36,371 $6,427 $7,732 $14,160
Nebraska 75,941 $10,116 $6,975 $16,850
Nevada 71,016 $8,179 $4,741 $12,920
New Hampshire 36,353 $2,871 $10,368 $13,239
New Jersey 262,246 $6,550 $9,584 $16,135
New Mexico 79,980 $11,922 $3,583 $15,505
New York 537,113 $9,139 $4,935 $14,075
North Carolina 393,922 $10,896 $5,449 $16,346
North Dakota 33,683 $8,679 $9,404 $18,084
Ohio 390,905 $6,262 $9,950 $16,212
Oklahoma 128,845 $6,617 $8,065 $14,683
Oregon 137,942 $6,703 $8,883 $15,587
Pennsylvania 346,265 $4,477 $12,685 $17,162
Rhode Island 30,204 $6,286 $9,587 $15,873
South Carolina 162,050 $6,465 $11,696 $17,213
South Dakota 32,816 $6,397 $9,918 $15,643
Tennessee 185,912 $9,291 $7,127 $16,148
Texas 1,066,707 $7,888 $5,632 $13,520
Utah 128,130 $7,688 $5,996 $13,684
Vermont 20,458 $2,914 $15,315 $17,617
Virginia 304,997 $5,805 $9,786 $15,506
Washington 235,292 $7,424 $5,430 $12,854
West Virginia 66,577 $5,261 $7,704 $12,139
Wisconsin 209,403 $6,846 $6,794 $13,640
Wyoming 22,194 $18,960 $4,047 $22,966
U.S. 10,934,890 $8,196 $6,902 $15,018
District of Columbia 3,518 $11,783 $8,621 $20,404
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, excluding appropriations for research, hospitals, and medical education.
  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.
  5. The U.S. calculation does not include the District of Columbia.
  6. Adjustment factors to arrive at constant dollar figures include Cost of Living Index (COLI), Enrollment Mix Index (EMI), and Higher Education Cost Adjustment (HECA). The COLI is not a measure of inflation over time. The District of Columbia is not adjusted for COLI or EMI.
Source(s):
  • State Higher Education Executive Officers Association

Financial Aid

States allocate financial aid to students attending both public and independent (private) institutions. A small portion of financial aid (less than 1 percent) is allocated to students attending out-of-state institutions. SHEF focuses specifically on state funding for public institutions. For this reason, financial aid to independent and out-of-state institutions is excluded from education appropriations. This section examines allocations to state financial aid for students attending public in-state institutions.

National Trends

Figure 2.3 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.

  • On a per-FTE basis and after adjusting for inflation, state financial aid to public institutions has increased 72.7 percent, from $468 in 2001 to $808 in 2019. State aid increased 4 percent in the last year and 8.7 percent from 2017-2018.

  • SHEF data show that states primarily protect financial aid during economic downturns. During the worst years of the Great Recession, from 2008 to 2012, aid increased 6.5 percent while appropriations dropped 23.9 percent. As a result, state public financial aid as a percent of appropriations i i State aid as a percent of education appropriations State aid as a percent of education appropriations measures allocations to state scholarships or other state financial aid for students attending public in-state institutions, as a proportion of total state and local support available for public higher education operating expenses. VIEW ALL DATA DEFINITIONS increased from 6.7 to 9.4 percent.

Figure 2.3

Public Higher Education State Financial Aid Per FTE and as a Percent of Education Appropriations, U.S., FY 2001-2019 (Constant Dollars)

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Notes:
  1. Constant 2019 dollars adjusted by the Higher Education Cost Adjustment (HECA).
  2. State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. Some respondents could not separate tuition aid from aid for living expenses.
  3. Education appropriations are a measure of state and local support available for public higher education operating expenses, excluding appropriations for research, hospitals, and medical education.
  4. Constant dollars adjusted 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

Trends in state-funded student financial aid for students attending public institutions differ substantially from trends in aid for students attending independent institutions. The composition of state financial aid has also changed over time. The SHEF issue brief on state financial aid explores trends over time in state financial aid to public and private institutions, by state.

SHEF Issue Brief: Changing Trends in State Financial Aid

State Comparisons

States vary considerably in how much of their total funding is allocated to student financial aid. On the low end, New Hampshire does not have an aid program, and Michigan has a very small aid program that comprises only 0.3 percent of its total education appropriations. On the high end, in two Southern states (Louisiana and South Carolina), financial aid comprises more than one quarter of their total funding for public higher education (see Figure 2.4 and Table 2.3).

Figure 2.4

Public Higher Education State Financial Aid as a Percent of Education Appropriations by State, FY 2019

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Notes:
  1. State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. Some respondents could not separate tuition aid from aid for living expenses.
  2. Education appropriations are a measure of state and local support available for public higher education operating expenses, excluding appropriations for research, hospitals, and medical education.
  3. The District of Columbia did not provide data on public financial aid.
  4. New Hampshire ended its public financial aid program in 2011.
  5. Constant dollars adjusted by the Higher Education Cost Adjustment (HECA).
  6. Adjusted to account for interstate differences using the Enrollment Mix Index (EMI).
  7. 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 2.3

Public Higher Education State Financial Aid as a Percent of Education Appropriations by State

State 2004 2009 2014 2018 2019 1-Year Change 5-Year Change 10-Year Change 15-Year Change
Alabama 2.0% 2.9% 5.7% 9.4% 8.8% -0.6 3.1 5.9 6.8
Alaska 0.0% 0.6% 3.1% 4.9% 4.5% -0.4 1.4 3.9 4.5
Arizona 0.4% 0.6% 0.8% 0.7% 0.7% 0.0 -0.1 0.1 0.3
Arkansas 4.4% 4.8% 15.6% 13.1% 13.6% 0.4 -2.0 8.8 9.1
California 4.2% 4.4% 10.3% 10.8% 10.7% -0.1 0.4 6.3 6.5
Colorado 13.3% 13.0% 17.0% 17.5% 17.3% -0.2 0.2 4.3 4.0
Connecticut 3.1% 4.4% 3.0% 3.5% 3.2% -0.2 0.2 -1.1 0.1
Delaware 5.4% 6.0% 6.5% 6.2% 6.2% 0.0 -0.3 0.2 0.8
Florida 10.6% 14.5% 11.8% 14.2% 16.6% 2.4 4.8 2.1 6.0
Georgia 18.6% 22.4% 19.9% 20.4% 20.6% 0.2 0.7 -1.8 2.0
Hawaii 0.1% 0.4% 0.9% 0.5% 0.4% 0.0 -0.4 0.1 0.4
Idaho 1.9% 2.1% 1.6% 2.3% 2.8% 0.5 1.2 0.6 0.8
Illinois 7.1% 6.0% 4.4% 5.1% 4.9% -0.1 0.6 -1.1 -2.1
Indiana 9.1% 12.1% 16.5% 19.2% 18.7% -0.5 2.2 6.6 9.6
Iowa 0.9% 1.6% 1.8% 1.1% 1.3% 0.2 -0.6 -0.4 0.4
Kansas 0.9% 1.5% 1.6% 1.4% 1.6% 0.2 0.1 0.1 0.7
Kentucky 12.8% 12.3% 14.3% 17.5% 17.8% 0.3 3.5 5.5 5.0
Louisiana 10.8% 12.3% 27.2% 34.2% 34.7% 0.4 7.5 22.3 23.9
Maine 3.9% 3.3% 2.8% 3.7% 3.7% -0.1 0.8 0.4 -0.2
Maryland 5.1% 4.8% 5.1% 3.9% 3.6% -0.3 -1.5 -1.2 -1.5
Massachusetts 5.3% 4.6% 4.8% 4.3% 4.6% 0.4 -0.2 0.1 -0.7
Michigan 4.5% 5.6% 0.2% 0.3% 0.3% 0.0 0.1 -5.3 -4.2
Minnesota 5.9% 7.2% 9.7% 9.0% 9.9% 0.8 0.1 2.7 4.0
Mississippi 4.6% 3.3% 4.2% 4.8% 5.4% 0.6 1.2 2.1 0.8
Missouri 2.3% 4.8% 7.1% 8.9% 9.2% 0.3 2.1 4.4 6.9
Montana 2.5% 3.4% 3.0% 0.7% 0.7% 0.0 -2.3 -2.7 -1.8
Nebraska 1.3% 1.3% 1.8% 1.8% 1.9% 0.1 0.1 0.6 0.7
Nevada 13.4% 11.8% 17.3% 18.0% 17.6% -0.3 0.3 5.8 4.2
New Hampshire 1.9% 1.7% 0.0% 0.0% 0.0% 0.0 0.0 -1.7 -1.9
New Jersey 8.5% 11.1% 14.0% 17.3% 18.5% 1.2 4.5 7.4 10.0
New Mexico 4.9% 3.8% 2.9% 2.6% 2.5% -0.1 -0.4 -1.3 -2.4
New York 13.7% 10.1% 11.7% 12.3% 12.0% -0.3 0.3 1.9 -1.7
North Carolina 4.4% 4.1% 4.0% 3.6% 3.4% -0.2 -0.6 -0.7 -1.1
North Dakota 0.9% 1.6% 4.2% 5.6% 5.5% -0.1 1.3 3.9 4.6
Ohio 4.8% 6.8% 3.7% 3.9% 3.8% -0.1 0.1 -3.0 -1.0
Oklahoma 5.8% 9.9% 10.3% 14.2% 15.4% 1.2 5.1 5.5 9.6
Oregon 3.2% 10.2% 7.7% 8.0% 8.6% 0.6 0.8 -1.6 5.3
Pennsylvania 9.9% 9.4% 16.1% 12.5% 11.9% -0.6 -4.2 2.5 2.0
Rhode Island 3.4% 4.6% 4.7% 5.4% 6.7% 1.3 2.0 2.1 3.3
South Carolina 23.1% 29.3% 35.9% 30.2% 29.1% -1.1 -6.8 -0.2 6.0
South Dakota 0.1% 1.9% 2.4% 4.8% 4.7% -0.1 2.3 2.8 4.6
Tennessee 3.3% 18.4% 22.1% 24.2% 24.4% 0.3 2.3 6.0 21.1
Texas 0.5% 1.5% 2.6% 3.4% 3.5% 0.1 0.9 2.0 3.0
Utah 1.1% 2.0% 1.9% 2.3% 2.8% 0.5 0.9 0.9 1.7
Vermont 13.2% 13.3% 13.3% 14.6% 16.0% 1.4 2.6 2.6 2.8
Virginia 7.1% 8.1% 11.7% 12.4% 12.3% -0.1 0.6 4.2 5.3
Washington 9.8% 11.6% 20.1% 15.9% 15.4% -0.4 -4.7 3.8 5.6
West Virginia 12.3% 17.1% 21.9% 24.9% 23.5% -1.4 1.6 6.3 11.1
Wisconsin 4.6% 6.5% 8.7% 8.8% 8.6% -0.2 0.0 2.1 4.0
Wyoming 5.0% 7.0% 7.7% 8.0% 7.7% -0.4 0.0 0.6 2.7
U.S. 6.4% 7.4% 9.0% 9.7% 9.9% 0.1 0.8 2.5 3.5
Notes:
  1. State public financial aid is any state appropriated student financial aid for public institutions, excluding loans. Some respondents could not separate tuition aid from aid for living expenses.
  2. Education appropriations are a measure of state and local support available for public higher education operating expenses, excluding appropriations for research, hospitals, and medical education.
  3. The District of Columbia did not provide data on public financial aid.
  4. New Hampshire ended its public financial aid program in 2011.
Source(s):
  • State Higher Education Executive Officers Association

Student Share

Figure 2.5 provides a 25-year look at the growing reliance on net tuition as a revenue source—the student share. i i Student share The student share is a measure of the proportion of total education revenues at public institutions coming from net tuition revenue. VIEW ALL DATA DEFINITIONS The measure of student share shows the proportion of total education revenues that comes from net tuition. Net tuition 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 revenue (from 21 percent to 46 percent) since the start of the SHEF dataset in 1980. The student share increases most rapidly during periods of economic recession, shifting more of the cost of higher education to students and families. When the economy stabilizes, a new level is established. Because of this trend, the student share will likely pass 50 percent during the next recession.

National Trends

Over the last 25 years, the U.S. average student share increased 14.7 percentage points from 31.3 percent in 1994 to 46 percent in 2019. Student share grew rapidly during the Great Recession, increasing from 35.7 percent in 2008 to an all-time high of 47.5 percent in 2013. Since that high point, the share from net tuition declined slightly, returning to 46 percent in 2019. Decreases in student share occur when growth in education appropriations outpaces growth in net tuition revenue.

There are regional differences in the student share, but the overall trend of sharp increases during economic recessions holds across each region. Student share is highest in the Midwest and Northeast; the South tracks closely to the U.S. average; and the West has