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SHEEO Releases FY10 State Higher Education Finance Report

March 11, 2011

State and local financial support for public higher education institutions fell 6 percent (from $88.9 billion to $83.7 billion) during the fiscal year 2008 to 2010 period, according to the State Higher Education Finance (SHEF) FY10 report, released recently by the State Higher Education Executive Officers (SHEEO). A steep decline in state tax appropriations to postsecondary institutions accounted for a large share of this total loss. Tax-based appropriations to colleges and universities fell to $71.6 billion in FY10 from $77.5 billion two years earlier. Non-tax-based support, in contrast, rose to $2.8 billion from $2.3 billion in the same time period. However, $4.8 billion in federal funds provided under the American Recovery and Reinvestment Act brought total funding to $88.5 billion, roughly equivalent to 2008 levels.

Many states increased their tuition and fee dollars to make up for the loss in tax appropriations. Net tuition revenue (total tuition and fee dollars minus spending on student financial aid grants and other awards) jumped 11.4 percent between FY09 and FY10, and net tuition revenue as a share of total revenue for general operating expenses for higher education increased from 33.6 percent in 2008 to 36.2 percent in 2010.

Enrollment Climbs

Despite the increase in tuition and decline in overall state support, full-time equivalent student enrollments at publicly supported colleges and universities rose from 2008 to 2010. Over the last ten years, FTE enrollment grew by about 35 percent. Over the past five years, every state except Louisiana saw enrollment growth during this five-year time span, with nine states experiencing growth of 20 percent or more. Due to the rapidly rising enrollment and overall falling revenue, funding per FTE for students in public institutions fell by 7.2 percent, from $7,325 in FY08 to $6,454 in FY10.

The full SHEF report is available online.


Ken Redd
Director, Research and Policy Analysis