16 States That Are Cutting College Funding
Money + Markets

16 States That Are Cutting College Funding

iStockphoto/The Fiscal Times

State and local funding for higher education fell 1.8 percent on a per capita basis in the U.S. last year, although much of that decline was driven by a budgetary anomaly in Illinois, where funding dropped by 80 percent after lawmakers couldn’t agree on a state budget and enacted a meager stopgap measure instead.

Excluding Illinois, per-student funding by states and cities rose by 3.2 percent in 2016 compared with 2015, with 34 states boosting their support year over year, according to a report from the State Higher Education Executive Officers Association. SHEEO analyzes revenues used for higher education, from sources including taxes, lotteries and endowments.

Related: 5 Alarming Facts About America’s $1.3 Trillion in Student Loan Debt

However, even though funding is rising in most states, overall financial support per student still lags 2008 levels by 17 percent. Only five states have yet to surpass pre-recession levels.

Fifteen other states in addition to Illinois cut back on per-student spending last year, largely due to lower revenue from local energy businesses (such as in North Dakota and Oklahoma) or increasing state costs for health care and pensions.

Here are the 16 states spending less per capita on higher education in 2016:

State and Local Educational Appropriations per Student

School Funding by State

Comparing higher education support to pre-recession levels paints a bleaker picture. Only Indiana, Montana, Nebraska, North Dakota, and Wyoming are spending more per-student than in 2008. Support in 20 states was at least 20 percent lower last year than in 2008.

Retirement and health care costs are competing with higher education for the same limited resources from states and cities, and the report forecast that a recovery in higher education funding wouldn’t be as robust as in the past. It predicts that “students and their families to make increasingly greater financial sacrifices in order to complete a postsecondary education.”

Related: College Endowments Take a Big Hit

The report also found that tuition revenue increased 2.1 percent per student, adjusted for inflation, marking the slowest year-over-year increase since 2009. Tuition last year contributed 47.8 percent of the revenue needed to support education, up from 46.8 percent in 2015.

Student enrollment last year declined as a reduction in community college enrollment offset a small increase at four-year universities and colleges. More than half of the enrollment decline came from Illinois, which has the fourth largest student enrollment in the country. Enrollment in the state dropped by 46,000 students, or about 11 percent of the state’s total student enrollment.