Ongoing enrollment declines remain an area of concern across higher education, but a new report shows that colleges and universities are struggling with declining tuition incomes due to strong state allocations and federal support in the last fiscal year.
The State Higher Education Finance report, released today by the State Higher Education Executive Officers Association, found that state funds rose 4.5 percent over inflation in FY 2021, with state governments declining expectations due to the coronavirus epidemic. The allocation was withdrawn by the federal government’s stimulus fund related to the epidemic. The SHEF report focuses on the fiscal year 2021, the period between July 1, 2020 and June 30, 2021, when significant federal dollars were being disbursed – funds that would essentially run out by 2023 – and before economic inflation accelerates.
SHEEO’s analysis also noted the 10th consecutive year of enrollment decline and warned that challenges for many colleges may be on the horizon as they deal with fewer students.
“Liberal federal stimulus funds protect state revenues and directly support higher education, reducing the need for states to cut funding during epidemics and short-term economic downturns,” a SHEEO press release said. “However, sharp declines in student enrollment and net tuition and fee revenue signals have continued to rise for the public’s higher education revenue.”
Some of the findings from this year’s SHEF report include:
- From 2020 to 2021 full-time enrollment dropped by 3 percent or 323,952 students. The decline in enrollment was largely driven by the decline in the number of community colleges.
- The inflation-adjusted education allocation increased to সময়ের 400 per full-time student, reaching $ 9,327 per student, and deprived the former funding trend in enrollment declines.
- Net tuition revenue fell 3.2 percent in the last fiscal year, with public institutions receiving $ 6,723 per full-time enrollment in net tuition and fee revenue. SHEEO notes that this is “the second-largest decline in inflation-adjusted net tuition earnings per FTE.”
- The federal stimulus fund makes up 1.3 percent of total education allocations.
- Community colleges are beginning to catch up with their four-year counterparts, with two-year institutions receiving 5.4 percent more full-time enrollment than four-year colleges in 2021, largely thanks to local allocations.
- Investment in state funding is growing faster than institutional funding. Inflation-consistent state financial support increased 8.8 percent in FY 2021, reaching an all-time high of $ 921 per full-time student and 9.9 percent of all-time educational allocations.
- Between 2020 and 2021, net income from tuition and fees per full-time enrollment declined in about three-quarters of the states. Nationally, net tuition and fee revenues in the four-year institution fell 4.8 percent.
- Total education income per full-time student increased 1.1 percent in 2021 to an all-time high of $ 15,959 per full-time enrollment, a number raised by the federal stimulus dollar. If federal stimulus funds are excluded, total education revenue is 0.3 percent lower.
Sophia Lauderman, Associate Vice President of SHEEO, said: “Our initial research, and the most surprising thing to us, is that state funding has increased significantly in 2021.” “It’s very contrary to our expectations, because based on past patterns and what we’ve seen since the past economic downturn, we expect state funding to decline this year. But instead, funding per student has risen 4.5 percent on top of inflation.”
Laudermann noted that multiple factors have led to the above results.
“The first is that the federal government has allocated stimulus funds to states to try to help with budget deficits and increased costs due to the COVID-19 epidemic. So the states initially received much more revenue than expected and were able to dedicate it to all their different budgets, meaning higher education, which usually shows the most cuts, was not so deeply affected, “Lederman said.” Funded, and all but five states have diverted some of the funding to higher education একটি a large part of the growth we are seeing is due to federal stimulus funds, but also because states have prioritized higher education and opted not to cut funding. “
Some higher education observers have noted that fiscal year 2021 has fallen short of expectations.
Robert Kelchen, professor and head of the Department of Educational Leadership and Policy Studies at the University of Tennessee in Knoxville, says the prospect of enrollment driven by a struggling economy is an example of an expectation that has not materialized.
“I think we were expecting enrollment growth because we were expecting a worse economy,” Kelchen explained. “We expected the funding to be a challenge because of the impact of the epidemic on the state budget, but instead, the state budgets came in pretty good shape through the epidemic and put federal aid funds on top.”
Given the need for many other funds for state governments, some experts believe that the overall outlook for colleges in terms of finances is fairly positive, especially considering the situation.
“After all, it’s a story of stability,” said Johnny Finney, a higher education consultant and former director of the Research Institute on Higher Education at the University of Pennsylvania. “Except when you look at individual states, they are all over the place. There are examples of investment, but above all, the country is moving in the right direction in supporting higher education, especially since state governments have had to take on much more responsibility. They have been very successful in retaining their share. This is the national story. Now, the story of each state is completely different. “
According to SHEEO’s analysis, education allocation for full-time enrollment declined in 18 states from 2020 to 2021 and increased in 32 other states, and Washington, D.C., in addition, 29 states continued funding for education below 2008, when the Great Depression hit. Hane 6
But Lederman warns that understanding the context is important when looking at the fall.
“There are states that either did not fund federal stimulus toward higher education or did less than in previous years,” Lederman said. “One thing to keep in mind is that states that have had reductions this year may have had reductions because they had more federal stimulus funds last year, so it looks like a reduction, but not necessarily a reduction in actual state funding. “
Above all, Kelchen notes that FY 2021 was good for allocations although it was bad for enrollment. State allocations for federal stimulus funds were largely good. And while the SHEF report offers a good snapshot of 2021, it does not indicate where higher ad is going, especially as inflation extends above 8.5 percent, under pressure from colleges and consumers.
“This report is a final recording of what happened at the beginning of the epidemic. But it does not give us much information about where we are going now, because the environment has changed a lot in the last two years. We are now in a world where enrollment across higher education is still low, but with the rapid rise in inflation, most states are less likely to maintain state funding, “Kelchen said.