Declining Investment in Higher Ed Hurts Students

April 18, 2012 | | U.S. News and World Report |

In the past three decades, college costs have risen significantly faster than inflation and are now at roughly 25 percent of the average household's income. This isn't true just for private schools. According to "The Great Cost Shift," a recent report by Demos, prices for tuition and fees at public, four-year universities more than doubled between 1990-1991 and 2009-2010, rising by 112.5 percent, while prices of two-year colleges rose 71 percent.

So what's causing tuition to rise at such a rapid pace? A major factor in tuition increases at public institutions has been the withdrawal of state and local funding.

According to "The Great Cost Shift," states' disinvestment in public institutions over the past two decades has resulted in "an irreversible slide of U.S. higher education being a collectively-funded public good to that of an individually purchased private good."

The report, which examines the impact of states' reduction and restructuring of financial support, is chock-full of statistics. Below is some of the more striking information:

  • From 1990-1991 to 2010-2011, total state appropriations rose from $65.1 billion to $75.6 billion. But state funding actually declined in relative terms. 
  • If states had provided the same level of per capita support as in 1990-1991, they would have invested $80.7 billion in 2010-2011.
  • If states had provided the same level of funding per public, full-time equivalent student as in 1990-1991, total appropriations in 2009-2010 would have equaled approximately $102 billion, an amount 35.3 percent higher.
  • The proportion of their revenues that public colleges and universities received from state appropriations dropped from 38.3 percent in 1991-1992 to 24.4 percent in 2008-2009. Rising tuition, fees, and room and board represent a shift in support from the state as a whole to individual students and their families.

In addition, the financial aid system has failed to keep pace with escalating costs, forcing students and their families to rely on financing strategies that reduce their odds of completing school.

[Find out how to finish community college.]

  • States reoriented their financial aid programs away from need-based assistance to merit-based aid, which favors wealthier students. Students not only pay more than they used to but also borrow more extensively.

As the report explains:

"The tuition solution is an imperfect one. Because state appropriations generally contribute a much larger share of public university revenue than tuition, any specific percentage reduction in state aid requires much larger percentage rises in tuition. Such increases price low- and moderate-income students out of higher education (while also eroding state support for higher education).

"Educational quality may erode, and some students forego higher education entirely."

So as you can see, it's not so easy for students to obtain a higher education without borrowing, and many factors are contributing to the dilemma. The Student Loan Ranger believes we all must recognize that students who are seeking this education are doing so at a much higher cost than in the past and are forced to find ways to pay.