States' spending on public college surpasses 2008 levels: Report

State funding for public colleges and universities grew 4.9% without adjusting for inflation last year and surpassed pre-recession spending per student for the first time since 2008, according to data released Thursday.

State spending per full-time equivalent student in fiscal 2022 ranged from $3,699 in New Hampshire to $22,970 in Illinois, the State Higher Education Executive Officers Association found in an annual report. Nationwide, state education allocations per student were 3.1% higher than in 2008 with federal stimulus money included and 0.6% higher without COVID-19 relief funds.

State and local government funding for higher education totaled $120.7 billion, including more than $2.5 billion in federal stimulus funding. Among public schools, two-year institutions received $55 per student and four-year institutions $169 per student in federal stimulus money.

That marks the biggest investment from state governments in public colleges since sweeping cuts stripped $33.8 billion from them during the 2008 recession, according to the association’s State Higher Education Finance report.

The increase "defied several long-term trends in higher education finance,” the report noted.

“The continued decline in net tuition revenue puts greater pressure on states to not cut funding to public higher education in the coming years,” the report’s authors wrote.

The report noted that full-time enrollment dropped for the 11th straight year in 2022 and plummeted more quickly during the pandemic.

And while tuition increased, net revenue has declined due to the growing reliance on federal student loans to pay for public higher education.

Public universities enrolled 10.31 million students in 2022, down 2.5% from 2021 and 11.5% from the historic peak in 2011. By comparison, enrollments declined by less than 1% annually on average from 2015 to 2020.

State public financial aid increased by 2% from 2021 to 2022, hitting an all-time high of $990 per enrolled student.

Net tuition revenue per student declined by 7.4% at two-year colleges and 0.2% at four-year colleges, the report found. Overall, net tuition revenue fell 5.8% over five years, reversing a long-term trend of growth dating back to 1980.

According to CollegeBoard, which does not adjust its numbers for inflation, the average tuition for in-state students at a four-year public university rose 1.8% from $10,740 in fall 2021 to $10,950 in fall 2022. For out-of-state students, public college tuition rose 2.2% from $27,560 to $28,240 over the same period.

Last year’s state spending surge contradicts the State Higher Education Executive Officers Association's 2020 report, which predicted pandemic lockdowns would force states to cut public higher education to an extent not seen since the 2008 recession.

According to the 2022 report, state appropriations rose 3.8% at community colleges and 4% at four-year public institutions from the previous year instead.

The state funding increases occurred as federal COVID-19 stimulus money dried up, sparking clashes in various state legislatures about their obligation to bail out schools.

Inflation-adjusted federal stimulus money for higher education fell by $1.4 billion or more than 36% from 2021 to 2022 as many states burned through funds from the American Rescue Plan Act, the report said.

Despite national-level increases, the report found that education appropriations per student declined in 21 states and Washington, D.C., over that period.

Allocations dropped by more than 20% in three states: Minnesota (21.8%, or $2,729 per student), New Hampshire (20.1%, or $931 per student), and Wyoming (35.1%, or $9,801 per student). The District of Columbia trimmed allocations by 28.0% or $10,572 per student.

"These declines were entirely due to states decreasing the amount of stimulus funds allocated to higher education in 2022,” the report noted.

Meanwhile, education funding per student increased by more than 10% in 29 states. The largest increases were in Georgia (30.3%, or $3,174 per student), New Jersey (25.0%, or $1,790) and Connecticut (23.9%, or $2,859).

"The increase in Georgia was largely, but not entirely, due to federal stimulus funds,” the report said. "The increase in New Jersey was primarily due to state investment in public operating. In Connecticut, the increase was due to a combination of federal stimulus funds and state investment in public operating."