In FY 2014, per-student state appropriations for higher education were 24 percent below the funding level in 1989. The result, also shown in the chart, is that net tuition revenue (the tuition received by public colleges and universities after grant aid is subtracted) has more than doubled during this period. Considering that three-quarters of all undergraduates are enrolled in public institutions, it’s not surprising that this increase in tuition prices has led to a large increase in student loan borrowing. This relationship between state funding and tuition costs has been well documented by a number of studies, including a recent one by the think tank Demos
If you look closely at the chart, you’ll see a repeating pattern -- higher education appropriations hit a peak just about as a recession hits the nation, and then decline for a few years following.