Paying More for College? Blame Government Cuts
Policy + Politics

Paying More for College? Blame Government Cuts

iStockphoto/The Fiscal Times

Amid mounting complaints from parents and students about rising college tuition, staggering student debt and declining quality of education, a new study blames much of the problem on the sharp reduction in state government support for higher education since the 2008 financial crisis and recession.

Nearly eight years of cuts in state funding for public colleges and universities “have driven up tuition and harmed students’ educational experiences by forcing faculty reductions, fewer course offers, and campus closings,” according to a report by the liberal-leaning Center on Budget and Policy Priorities.

Related: Black Students Take on More Debt than Asian, White Low-Income

These budgetary policy choices have made college far less affordable — and less accessible — for millions of students who need undergraduate and graduate degrees to make it in today’s highly competitive economy, according to the report written by the center’s Michael Mitchell, Michael Leachman and Kathleen Masterson.

State funding for public two- and four-year colleges and universities is now $8.7 billion below pre-recession levels, after adjusting for inflation, according to the new analysis. Of the 45 states that enacted full higher education budgets for the 2015-2016 academic year, all but four — Montana, North Dakota, Wisconsin and Wyoming — are spending less money per student than before the recession began, according to the study.

Average state spending per student is $1,525 for the current year, or 17 percent less than the per-student spending before the onset of the Great Recession. The most glaring examples of declining support for public colleges and universities can be found in Alabama, Arizona, Idaho, Kentucky, Louisiana, New Hampshire, Pennsylvania and South Carolina. Funding per student in those states is down by more than 30 percent since the start of the recession.

These cuts have had a ripple effect on public colleges and universities. They have forced those schools to substantially raise tuition and cut back on the size of the faculty, course offerings and extra-curricular activities.

Related: How You Can Escape Student Loan Repayment

According to the report, annual published tuition at four-year public colleges rose by $2,333, or 33 percent, since the 2007-08 school year. In Arizona, tuition at four-year schools is up 90 percent since that time, while published tuition soared by more than 60 percent in Alabama, California, Florida, Georgia, Hawaii and Louisiana.

“These sharp tuition increases have accelerated longer-term trends of college becoming less affordable and costs shifting from states to students,” the report states. “Over the last 20 years, the price of attending a four-year public college or university has grown significantly faster than the median income. Although federal student aid and tax credits have risen, on average they have fallen short of covering the tuition increases.”

There are many factors that have contributed to this situation. The economic recovery has been uneven throughout the country, and many states had little choice but to cut spending on higher education while addressing shortcomings in state revenues, soaring deficits in state budgets, underfunded public employee pension funds and increased demands for social services and unemployment insurance.

In some cases, however, states opted for major tax cuts for middle and upper-income people to try to stimulate the economy. Those generous tax cuts for the rich had to be offset by reductions in spending on higher education and other important public programs. Those states that cut taxes include Wisconsin, Louisiana, Kansas and Arizona.

Related: Guess Who in Congress Has $100,000 in Student Loans

According to College Board, the average cost of tuition and fees for the 2015-16 school year was $9,410 for state residents in public universities and colleges and $23,893 for out-of-state students attending public universities. At private colleges, the average was $32,405.

While private institutions rely heavily on charitable donations and large endowments to help fund instruction and supplement tuition, public colleges and universities depend heavily on state and local appropriations. For instance, in 2015, more than half of the funds used by public institutions of higher learning for teaching and instruction came from state and local government sources, according to the budget center’s report.

Many states have made an effort in the past year to modestly boost spending on higher education, with per-student funding rising on average by $275, or 4 percent, across the nation. But in 11 states, the per-student funding declined from the previous year’s levels. In three of those states — Arkansas, Kentucky and Vermont — higher education funding has declined for two years in a row.

Related: Here’s Why It Takes Women Longer to Pay Off Student Loans

“Sufficient public investment can only occur . . . if policymakers make sound tax and budget decisions,” the report concludes. “State revenues have improved significantly since the depths of the recession but are still only modestly above pre-recession levels. To make college more affordable and increase access to higher education, many states need to supplement that revenue growth with new revenue to fully make up for years of severe cuts.”