State Higher Education Finance Report: 2014

By Betsy Prueter

The State Higher Education Executive Officers (SHEEO) Association recently released their annual State Higher Education Finance report, revealing that tuition dollars make up just over 47 percent of revenue for public higher education for the third straight year (a figure that has doubled in the last 25 years). As result, tuition rivals state appropriations as the main source of funding for public colleges and universities. While state appropriations did increase slightly from 50.4 percent in 2013 to 51.1 percent in 2014, overall, they have been trending downward over the last decade. The report also points out that public colleges now rely on tuition dollars significantly more than they did before the economic downturn for basic functioning and operations.

Among some of the other findings:

• Enrollment at public institutions has increased from 7.5 million in 1989 to 11.1 million in 2014 but has declined slightly for each of the past three years.
• Net tuition revenue was up 2.7% in 2014 from the previous year, up over 26% from five years ago and up 107% from 25 years ago (inflation adjusted).
• On a positive note, states are starting to reinvest in postsecondary education- 37 states increased financial support in 2014 and on average, states spent 5% more per student in 2014 than they did the year before.
  • Unfortunately, per student spending is still 13% lower than it was five years ago and 24% lower than it was 25 years ago (inflation adjusted).