Study Links State Higher-Education Spending to Demographics and Economy

A new analysis of state spending on higher education finds that states with a diverse economy, low unemployment, and a history of support for higher education are likely to maintain public spending on colleges. Conversely, states that do not have those characteristics have a hard time overcoming fiscal challenges to create a robust system of higher education.

The study, described in a report titled “College Funding in Context: Understanding the Difference in Higher Education Appropriations Across the States,” was conducted by researchers at the University of Minnesota-Twin Cities’ department of organizational leadership, policy, and development. It found that states that are leaders in higher-education spending tend to stay at the top of that category, creating a kind of “virtuous cycle.” The study was published by Demos, a nonpartisan organization that studies and advocates for government spending to promote economic equality.

Specifically, the study found that a one-percentage-point increase in unemployment correlates with a seven-percentage-point decline in state appropriations per full-time-equivalent student, or “FTE.”