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Rising Tuition and Declining Investment at Public Universities

Joseph Hines

Here's a plain fact: record disinvestment in higher education at the state level leads to record tuition hikes. In 2012, the trend escalated with the biggest single year jump on record. That’s clear from the Wall Street Journal’s analysis of a new State Higher Education Officers Association (SHEEO) report, which finds that average tuition at public universities rose by 8.3%, after grants and scholarship. Simultaneously, funding per full-time student fell an equivalent 9%, the largest drop since 1980. 

California, for example, cut 14.3% of its funding for public higher education, the highest percentage in the country. As a result, the Journal found that 20,000 qualified students per year are being turned away from the California State University system alone. Those are students who are potentially denied a pathway to the middle class that was available to their parents, and promised to them. 

All told, investment in public higher education is down 26% since 1990. But the trend away from investment in higher education accelerated during the Great Recession. Since 2007, almost every state slashed funding for higher education, while almost every state, in turn, raised tuition. That's directly proportional to disinvesment: The Chronicle of Higher Education finds that where in 1987 tuition revenue accounted for 23% of public college revenue, today it accounts for 47%. State funding, meanwhile, has cratered to less than half. The result? As Charles Blow noted in his column today, state and local appropriates per student "reached their high in 2001, at $8,670. In 2012, those appropriations fell by nearly one third, to just $5,896."

These tuition spikes and funding cuts have a disastrous impact on students, as all these trends come amidst a student-loan crisis that has already reached record heights. Student debt now totals $902 billion, larger than credit card debt. It averages around $27,000 per student in the class of 2011, according to estimates by the College Board. That’s debt that can’t be easily discharged in bankruptcy, that can be garnished from social security benefits or wages by the federal government. That’s debt taken on by students for a good that used to be public. Many of the same villains from the financial crisis are now profiting on the growth of student loans, with banks now marketing private student loans directly to students.

In his State of the Union, President Obama pledged to tackle the high cost of college and record student loan debt. Yet he didn't propose a solution. As Demos Vice President Tamara Draut said of the State of the Union, "while [Obama] rightly called on universities to be more accountable for rising costs, he failed to acknowledge the biggest driver behind skyrocketing tuition and college debt: a steady and swift decline in state funding for public colleges and universities."