College & Workforce Readiness

Student Spending at Public Universities Found to Be Eroding

By Caralee J. Adams — June 15, 2012 2 min read
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The bulk of new enrollment in higher education over the past decade has been at public institutions, where increases in money spent on students has been smaller than increases in tuition and fees.

Trends in Public Higher Education: Enrollment, Prices, Student Aid, Revenues,and Expenditures

just released by the College Board notes that in the fall of 2009, three-quarters of all undergraduate students and 70 percent of full-time undergraduates were enrolled in public two-year and four-year institutions. There has been an influx of about 5 million students since 2000, bringing the total postsecondary enrollment up by 25 percent to 20.4 million.

On average, published in-state prices at four-year public universities over the past decade increased at an annual rate of 5.6 percent beyond general inflation and 3.8 percent beyond inflation at public two-year schools.

But students aren’t necessarily getting more for their money. Between 2002 and 2008, per-student expenditures rose at an annual pace of just 1 percent at all public institutions. Faculty aren’t getting much of the slice either, with salaries increasing just 1 percent to 2 percent over the past decade, according to the brief authored by Sandy Baum, Jennifer Ma, and Kathleen Payea.

Severe cuts in state funding for higher education has led many institutions to raise prices to make up for the shortfall.

Public two-year colleges rely most on state and local appropriations, and that dropped from 64 percent to 57 percent of total revenues between 1998-99 and 2008-09, the brief explains.

More federal aid has helped students keep up with rising prices. The College Board brief shows that full-time undergraduates at public four-year colleges and universities received about 45 percent of their grant aid from the federal government and 19 percent from state governments in 2010-11. Those at public two-year colleges got 81 percent of their grant aid from the federal government and 9 percent from the states.

With the help of grant aid from federal and state governments, as well as employers and private sources, the net price students pay is often much lower than the published prices. All told, these sources amounted to $5,750 in assistance in 2011-12 for full-time undergraduates enrolled in public four-year institutions. At public community colleges, on average, grant aid and tax benefits covered tuition and fees in 2011-12, leaving about $810 to help students pay for books and supplies and living costs, the brief notes.

A version of this news article first appeared in the College Bound blog.