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Public Institutions Rely on Tuition and Fees More Heavily Than Appropriations

October 3, 2012

According to the Delta Cost Project report, "Revenues: Where Does the Money Come From?" 2010 marked the first time that net tuition revenue was greater than state and local appropriations at public research and master's institutions. The report, published by the American Institutes for Research, shows metrics on total operating revenues by major sources and trends in sticker, gross, and net tuition revenues.

State and local appropriations have fallen from where they were a decade ago at all types of public institutions. Research and master's institutions saw a 24 percent reduction in state and local appropriations from 2000 to 2010, while community colleges and bachelor's degree granting institutions experienced a 20 percent loss of state and local support. In fact, while state and local appropriations have fallen, net tuition revenue has grown at public institutions, and for the first time at public research and master's institutions, net tuition revenue per full-time equivalent (FTE) was higher than the appropriations. At public bachelor's institutions, the two are nearly equal. FTE enrollment grew at all types of public and private institutions from 2000 to 2010.

Sticker price increased faster at public institutions (between 5 and 6.4 percent depending on the type of institution) than at private, not-for-profit institutions (approximately 3 percent) from 2009 to 2010. Net tuition revenue increases at public institutions ranged between 4.4 and 6.7 percent, while private institutions saw little to no growth in net tuition revenue (0.8 to 1.7 percent). Because the percent increase in net tuition revenue was below gross tuition revenue and sticker price percent increases, this implies that more institutional aid was awarded to students to help ease the strain of increased sticker prices. According to the report, the discount rate at private institutions grew 1 percent from 2009 to 2010, while public institutions did not increased their discount rate — or, as was the case with community colleges, lowered their discount rate.

Delta Cost Project dollar figures from 2000 to 2010 are in 2010 constant dollars and are reported by FTE in order to capture changes in enrollments.
The Delta Cost Project report, "Revenues: Where Does the Money Come From?" can be found on their web site.


Natalie Pullaro Davis
Manager, Research and Policy Analysis