Of the $86.3 billion state and local governments contributed to higher education in fiscal year (FY) 2014, $8.9 billion went to financial aid for students at public institutions, according to a new report.
That funding is an increase over the prior fiscal year, the State Higher Education Executive Officers Association (SHEEO) writes in "State Higher Education Finance: FY 2014." Compared to FY 2013, total higher education spending increased 5.7 percent.
"Despite the challenges of the economic downturn, states have maintained support for these programs, although the enrollment growth that occurred throughout the downturn likely led to decreased purchasing power of these funds (because more students were eligible for and may have received aid)," the report notes.
Public university students saw most of the aid-specific funding, as approximately $6.67 billion went to students enrolled at a public institution, up from $6.56 billion in FY 2013. Another $2.231 billion went to students attending independent institutions, an increase over FY 2013’s $2.229 billion. Funding for out-of-state students decreased only slightly, from $35 million in FY 2013 to $34 million in FY 2014.
In total, student aid amassed about 10.4 percent of total higher education funding. The bulk of the funds – 78.6 percent – went to operational costs. Another 12.2 percent was doled out for special purpose or restricted state appropriations for research, agricultural extension, and medical education.
Though the increases signal a positive trend, funding levels have yet to rebound to the highs reached before the recession. NASFAA continues to advocate for a partnership approach to higher education funding, as help from states and local governments alleviates some of the pressure on institutions to increase funds through tuition. In the last fiscal year, net tuition revenue accounted for 47.1 percent of per-student funding at public institutions – the lowest it’s been since 2008.
Publication Date: 4/14/2015