For the first time, state funding to public colleges exceeds per-student funding levels seen prior to the Great Recession

WASHINGTON, May 25, 2023 /PRNewswire/ -- The latest State Higher Education Finance (SHEF) report finds that in 2022, public higher education appropriations increased 4.9% beyond inflation, surpassing pre-recession per-student funding levels for the first time since 2008. The SHEF report also finds that fiscal year 2022 saw the second largest public FTE enrollment decline since the start of the SHEF dataset in 1980, and tuition revenue continued to decline.

After a short recession in 2020 due to the COVID-19 pandemic, historical patterns following economic recessions reversed in 2021 and 2022. Instead of the typical decrease in state funding following a recession, education appropriations increased for the 10th straight year, rising $932 per full-time equivalent (FTE) from 2020 to 2022. Inflation-adjusted education appropriations per FTE were greater than pre-recession funding levels in 2008, by 3.1% or $304 per FTE. The increase in education appropriations per FTE can be attributed to three notable trends: increasing state commitments to higher education funding, a sharp decline in FTE enrollment, and generous federal stimulus funding.

Additional findings from this year's report include:

• Public FTE enrollment has now declined for 11 straight years to 10.31 million in 2022, down 2.5% since 2021, and down 11.6% from an enrollment peak in 2011.
• State and local government funding for higher education totaled $120.7 billion in fiscal year 2022, including more than $2.5 billion (2.1%) in federal stimulus funding. Inflation-adjusted federal stimulus funding for higher education declined $1.4 billion or 36.4% from fiscal year 2021.
• Education appropriations increased 3.8% at two-year institutions and 4.0% at four-year institutions. Although national-level education appropriations have recovered to 2008 levels, 28 states continue funding higher education at a lower level than prior to the Great Recession.
• State public financial aid per FTE increased 2.0% from 2021 to 2022 and reached an all-time high of $990 per FTE enrolled student. These funds made up 9.7% of all education appropriations.
• Inflation-adjusted net tuition revenue decreased 1.0% in 2022 and has declined 5.8% in the last five years. Public institutions received $7,244 per FTE in net tuition and fee revenue in 2022.
• Total education revenue increased 2.4% from 2021 to 2022, reaching an all-time high of $17,393 per FTE. However, total education revenue is at an all-time high in only 11 states, and many institutions are not at an all-time high for total education revenue. Additionally, the increase in total education revenue since the start of the COVID-19 pandemic is explained by federal stimulus funding and the enrollment decline. Excluding federal stimulus funding, and if enrollment had held constant at 2020 levels, total education revenue per FTE would have declined 2.4% from 2020 to 2022.
• The student share decreased from 43.1% in 2021 to 41.7% in 2022, and for the first time since 2016, the student tuition and fees funding public higher education comprised less than 50% of total revenues in more than half of all states and Washington, D.C., even after excluding federal stimulus funding.

As these findings demonstrate, fiscal year 2022 defied several long-term trends in higher education finance and showed growth in education appropriations.

Explore the SHEF website to read the full report and customize the interactive data visualizations. The SHEF website also includes individual state profiles, an additional report on state effort and capacity to fund higher education, and data resources exploring additional higher education finance topics like student residency, performance-based funding, and capital appropriations.

For the full press release, visit https://bit.ly/SHEF22_Release.

SOURCE State Higher Education Executive Officers Association (SHEEO)