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State and Local Support for Higher Education Drops Slightly in FY16

April 27, 2017

Total state and local government funding for postsecondary education totaled $90.5 billion in FY16, down slightly from $90.9 billion in the fiscal year prior, results of SHEF FY 2016: State Higher Education Finance show.

The SHEF report is published annually by the State Higher Education Executive Officers Association. This year’s data show state funding dropped from $81.8 billion in FY15 to $80.8 billion in FY16, while local funding ticked up to $9.6 billion from $9.1 billion.

Of the $90.5 billion in total funding, about $70 billion was allocated to support institutions’ general education and operations; $10.6 billion went to medical education, hospitals, agricultural programs, and research; and nearly $10 billion was directed to state-based student financial aid programs. While overall state and local spending for colleges and universities declined, support for state-based student financial aid programs increased by 8 percent.

Much of the decline in total state support can be attributed to one state, Illinois, which enacted only a "stopgap" budget for the fiscal year. On a per-student basis, higher education support in Illinois fell by 80 percent. Overall, 33 states increased their higher education state/local support per student, while 17 states, the District of Columbia, and Puerto Rico reduced support.

Per-student state and local government support for colleges and universities is 17 percent below the level achieved before the 2008 economic recession. Tuition and fee revenue has risen to make up this decline. On a per-student basis, net tuition revenue (defined in the report as total tuition and fees dollars minus institutional financial aid, tuition waivers or discounts, and medical student tuition and fees) grew from $6,176 in FY15 to $6,305 in FY16. In inflation-adjusted dollars, net tuition revenue has risen nearly 36 percent since FY08.

The full SHEF report is available online at no charge.


Ken Redd
Director, Research and Policy Analysis