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State Financing of Higher Education New America Foundation March 1, 2012 Paul Lingenfelter, SHEEO

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Page 1: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

State Financing of

Higher Education

New America

Foundation

March 1, 2012

Paul Lingenfelter, SHEEO

Page 2: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

Composition of Total State Expenditures by Function,

Fiscal 1987 - 2009

Source: National Association of State Budget Officers, 2009 State Expenditure Report

Page 3: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

State General Fund Expenditures, FY 1990 & 2009

Source: National Association of State Budget Officers, 1990 & 2009 State Expenditure Report

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Elementaryand Secondary

Education

All Other Medicaid HigherEducation

Corrections PublicAssistance

Transportation

1990

2009

Page 4: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

-0.5 -1

.0

-1.0 -1

.6 -2.1

-2.3 -2

.8

-2.9

-3.0 -3

.3 -3.8

-3.9 -4

.2

-4.2

-4.3

-4.3

-4.4

-4.4 -4

.8

-4.8

-4.8 -5

.1

-5.2

-5.2

-5.3 -5

.6

-5.6

-5.7

-5.7

-5.8

-5.8

-5.9 -6

.2

-6.3

-6.5

-6.7

-6.8

-6.9

-7.0

-7.0 -7

.4 -8.0

-8.2

-8.9 -9

.3-9

.3 -9.8

-10

.5

-10

.7

-5.7

-12

-9

-6

-3

0

Utah

Montana

New

Ham

pshireDelaw

areNew

JerseyMaine

Maryland

Massachusetts

WisconsinVerm

ontOhio

North D

akotaConnecticut

Kansas

ArkansasVirginia

Nebraska

Oklahom

aMinnesotaColorado

West V

irginiaKentucky

MichiganArizona

New

York

GeorgiaHaw

aiiIllinois

Pennsylvania

Alaska

Rhode Island

United S

tates

New

Mexico

California

Iowa

IndianaNorth C

arolinaFloridaIdaho

South C

arolinaSouth D

akotaMissouri

WashingtonOregonTexas

Nevada

TennesseeMississippiLouisianaAlabam

a

Source: NCHEMS; Don Boyd (Rockefeller Institute of Government), 2005.

Projected state and local budget deficits as a percent of revenues, 2013

Page 5: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

$7,4

79

$7,8

55

$7,9

93

$7,9

88

$7,8

69

$7,8

25

$7,6

07

$7,1

71

$6,9

12

$6,9

94

$7,2

27

$7,3

11

$7,5

47

$7,7

70

$7,9

61

$8,0

35

$8,0

76

$7,7

75

$7,2

11

$6,7

40

$6,6

62

$6,9

86

$7,1

95

$7,3

25

$6,9

51

$6,4

51

$2,2

74

$2,3

71

$2,4

34

$2,5

01

$2,5

50

$2,6

08

$2,6

91

$2,9

03

$3,0

82

$3,1

86

$3,2

71

$3,3

87

$3,4

19

$3,4

31

$3,4

28

$3,3

37

$3,3

48

$3,3

56

$3,4

31

$3,6

11

$3,7

60

$3,9

35

$4,0

68

$4,1

16

$4,1

78

$4,3

21

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

-

2.0

4.0

6.0

8.0

10.0

12.0

14.019

85

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

Do

llar

s p

er F

TE

Pu

bli

c F

TE

En

roll

men

t (M

illi

on

s)

Public FTE Enrollment and Educational Appropriations per FTE, U.S., Fiscal 1985-2010

Educational Appropriations per FTE (constant $) Net Tuition Revenue per FTE (constant $) Public FTE Enrollment (millions)

Note: Net tuition revenue used for capital debt service are included in the above figures.Constant 2010 dollars adjusted by SHEEO Higher Education Cost Adjustment (HECA).

Source: State Higher Education Executive Officers

Page 6: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

Educational Appropriations per FTE by State, FY 2010, Adjusted by COLA and EMI

Note: Net tuition revenue used for capital debt service are included in the above figures.

Source: State Higher Education Executive Officers

$-

$5,000

$10,000

$15,000

$20,000

Cal

ifo

rnia

Was

hin

gto

n

Flo

rid

a

Mo

nta

na

Uta

h

Ore

go

n

Co

lora

do

Geo

rgia

New

Mex

ico

Kan

sas

Oh

io

Lo

uis

ian

a

Mis

sou

ri

Ind

ian

a

New

Ham

psh

ire

Haw

aii

Wis

con

sin

Idah

o

Nev

ada

US

Min

nes

ota

Neb

rask

a

Mas

sach

use

tts

Vir

gin

ia

Iow

a

Ari

zon

a

So

uth

Dak

ota

No

rth

Car

oli

na

New

Yo

rk

Ten

nes

see

Ark

ansa

s

So

uth

Car

oli

na

Illi

no

is

Ala

bam

a

Ok

lah

om

a

Wes

t V

irg

inia

No

rth

Dak

ota

Mic

hig

an

Ken

tuck

y

Mis

siss

ipp

i

Tex

as

Pen

nsy

lvan

ia

Mar

ylan

d

Mai

ne

Rh

od

e Is

lan

d

New

Jer

sey

Co

nn

ecti

cut

Ver

mo

nt

Wyo

min

g

Del

awar

e

Ala

ska

Net Tuition Revenue per FTE (adjusted by COLA and EMI)

Educational Approriations per FTE (adjusted by COLA and EMI)

Page 7: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

-27.4%

-3.2%

26.6%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Rh

od

e Is

lan

d

New

Mex

ico

Mic

hig

an

Flo

rid

a

Kan

sas

New

Jer

sey

Ind

ian

a

So

uth

Car

oli

na

Geo

rgia

Pen

nsy

lvan

ia

Oh

io

New

Ham

psh

ire

Nev

ada

Idah

o

Mis

sou

ri

Ore

go

n

Ver

mo

nt

Vir

gin

ia

Mas

sach

use

tts

Cal

ifo

rnia

Was

hin

gto

n

Uta

h

Mai

ne

So

uth

Dak

ota

Ten

nes

see

Min

nes

ota US

Iow

a

Wis

con

sin

Del

awar

e

Wes

t V

irg

inia

Ken

tuck

y

Ari

zon

a

Ala

bam

a

Co

nn

ecti

cut

Ark

ansa

s

Wyo

min

g

New

Yo

rk

Mar

ylan

d

Neb

rask

a

Illi

no

is

Haw

aii

No

rth

Car

oli

na

Lo

uis

ian

a

Mo

nta

na

Mis

siss

ipp

i

Ala

ska

Co

lora

do

Tex

as

Ok

lah

om

a

No

rth

Dak

ota

Educational Appropriations per FTE Percent Change by State, Fiscal 2005-2010

Note: Dollars adjusted by 2010 HECA, Cost of Living Adjustment, and Enrollment Mix Index.

Source: State Higher Education Executive Officers

Page 8: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

23.3%

29.3%

34.7%40.3%

10%

15%

20%

25%

30%

35%

40%

45%

198

5

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

Net Tuition as a Percent of Public Higher Education Total Educational RevenueU.S., Fiscal 1985-2010

Note: Net tuition revenue used for capital debt service is included in net tuition revenue, but excluded from total educational revenue in calculating the above figures.

Source: State Higher Education Executive Officers

Recession

5 year

10 year

25 year

Page 9: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

12.4%

40.3%

83.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Wyo

min

g

New

Mex

ico

No

rth

Car

oli

na

Geo

rgia

Cal

ifo

rnia

Ala

ska

Idah

o

Nev

ada

Lo

uis

ian

a

Was

hin

gto

n

Haw

aii

Flo

rid

a

New

Yo

rk

Illi

no

is

Ok

lah

om

a

Tex

as

Ten

nes

see

Wis

con

sin

Neb

rask

a

Mis

siss

ipp

i

Mis

sou

ri

US

Uta

h

Co

nn

ecti

cut

Ken

tuck

y

Ark

ansa

s

Ari

zon

a

Kan

sas

Mas

sach

use

tts

Min

nes

ota

Mar

ylan

d

No

rth

Dak

ota

New

Jer

sey

Mo

nta

na

Ore

go

n

Ala

bam

a

Iow

a

Vir

gin

ia

Wes

t V

irg

inia

Oh

io

Mai

ne

So

uth

Car

oli

na

Ind

ian

a

Co

lora

do

So

uth

Dak

ota

Mic

hig

an

Pen

nsy

lvan

ia

Del

awar

e

Rh

od

e Is

lan

d

New

Ham

psh

ire

Ver

mo

nt

Net Tuition as a Percent of Public Higher Education Total Educational Revenue by State, Fiscal 2010

Note: Dollars adjusted by 2010 HECA, Cost of Living Adjustment, and Enrollment Mix.

Source: State Higher Education Executive Officers

Page 10: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

State Need-Based and Nonneed-Based Grants for Undergraduate StudentsConstant 2009 Dollars

Need-based Grants Nonneed-based Grants

Source: 40th Annual Survey Report on State-Sponsored Student Financial Aid, NASSGAP

Constant 2009 dollars adjusted using CPI

Page 11: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000A

rizo

na

New

Ham

psh

ire

Iow

a

Haw

aii

Kan

sas

Mic

hig

an

So

uth

Dak

ota

Uta

h

Idah

o

Oh

io

Mo

nta

na

Mis

siss

ipp

i

Ala

bam

a

Mai

ne

No

rth

Dak

ota

New

Mex

ico

Rh

od

e Is

lan

d

Mis

sou

ri

Ore

go

n

Tex

as

Ark

ansa

s

Mar

ylan

d

Wis

con

sin

Ver

mo

nt

Del

awar

e

Cal

ifo

rnia

Vir

gin

ia

Mas

sach

use

tts

Min

nes

ota US

Co

lora

do

Pen

nsy

lvan

ia

Illi

no

is

Ind

ian

a

Ok

lah

om

a

No

rth

Car

oli

na

Was

hin

gto

n

Lo

uis

ian

a

Ken

tuck

y

Flo

rid

a

New

Yo

rk

Wes

t V

irg

inia

New

Jer

sey

Wyo

min

g

Ten

nes

see

So

uth

Car

oli

na

Geo

rgia

State Aid to Students Attending Public Institutions per FTEFY 2010

Source: SHEEO SSDB

Page 12: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

$0

$2

$4

$6

$8

$10

$12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Public and Non-Public Aid per $100 of State SupportConstant 2010 Dollars

Public Aid per $100 of State Support Non-Public Aid per $100 of State SupportSource: SHEEO SSDB

Page 13: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10

Federal Student Aid per FTEConstant 2009 Dollars

Education Tax Benefits Federal Loans Pell Grants Other Federal Programs

Source: Trends in College Pricing, The College Board, 2010

Page 14: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

0

5,000

10,000

15,000

20,000

25,000

30,000

Pell Grant Trends 1977-2010

Total Pell Expenditures (in Millions) Maximum Pell Grant

Average Pell Grant per Recipient Number of Pell Recipients (in Thousands)

Source: The Federal Pell Grant Program End of Year Report, 2008-09 and projections from U.S. Department of Education, Office of Postsecondary Education.

Page 15: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

15%

20%

25%

30%

35%

40%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1976

-77

1977

-78

1978

-79

1979

-80

198

0-8

1

198

1-8

2

198

2-8

3

198

3-8

4

198

4-8

5

198

5-8

6

198

6-8

7

198

7-8

8

198

8-8

9

198

9-9

0

199

0-9

1

199

1-9

2

199

2-9

3

199

3-9

4

199

4-9

5

199

5-9

6

199

6-9

7

199

7-9

8

199

8-9

9

199

9-0

0

200

0-0

1

200

1-0

2

200

2-0

3

200

3-0

4

200

4-0

5

200

5-0

6

200

6-0

7

200

7-0

8

200

8-0

9

200

9-1

0

Pell Grant Recipients and Fall Headcount Enrollment

Fall Enrollment Number of Pell Recipients Pell Recipients as a Percentage of Fall Enrollment

Source: The Federal Pell Grant Program End of Year Report, 2008-09 and projections from U.S. Department of Education, Office of Postsecondary Education and the Digest of Education Statistics,

2010.

Page 16: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

Degree attainment by SAT scores and

socioeconomic status

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1200-1600 1100-1199 1000-1099 800-999 400-799

SAT Score

BA

+ A

ttain

ment R

ate

Top SES

2nd SES

3rd SES

Bottom SES

Source: Anthony Carnevale, Liberal Education, Fall 2008, p. 58.

Page 17: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

FY 2011 – what will SHEF show?

State support (with ARRA help) essentially flat, while enrollments continue to grow, except in a few places

Tuition continues to grow

Support per student drops again

Page 18: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

FY 2012 – what will SHEF show?

State support down 7.6 percent, with ARRA exhausted

Enrollments ?

Tuition continues to grow?

Support per student drops by X%?

Page 19: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

Three Wrong Ideas

The right formula will provide all the amounts and incentives needed to yield great performance.

The only way to get improved performance is to spend more money.

We can get the results we need without spending more money.

Page 20: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

Three “Right” Questions

What does the public need from higher education?

What can higher education do better with the money we have now?

Where can strategic investments help us get the results we need?

Page 21: State Financing of Higher Education · State Financing of Higher Education New America Foundation March 1, 2012 ... Elementary and Secondary Education All Other Medicaid Higher Education

THANK YOU!