State Support for Higher Education on the Upswing, Report Finds
By Owen Daugherty, NASFAA Staff Reporter
Following months of concern over states slashing their higher education budgets to balance their books due to an economic recession amid the pandemic, state education budgets are rebounding and advocates are feeling more optimistic about spending levels, according to a new report.
The annual “Grapevine” report from the State Higher Education Executive Officers Association (SHEEO) in conjunction with Illinois State University shows that state funding for higher education in 2022, excluding federal stimulus funds, was up more than 8% compared to the previous year.
With the $7.5 billion in federal stimulus funding over the last three years taken into account, states reported a 6.5% increase in higher education support between 2021 and 2022, the largest single-year increase since 2008 — and a welcomed sign among higher education stakeholders.
Notably, with federal stimulus money excluded, only five states saw a decline in funding for higher education: Alaska, Hawaii, New Hampshire, Vermont, and Wyoming.
With federal stimulus funds taken into account, 18 states reported a decline in support for higher education from 2021 to 2022. However, the report notes that decline is due to the reduction in federal money, not a change in state support.
It’s important to note that the data in the report do not account for inflation, and the authors note that while year-over-year inflation from fiscal year 2021 to 2022 is yet to be known, it will likely account for a significant portion of the increase. Another caveat is the fact that the current fiscal year does not end until June 30, so funding levels for some states could change before then.
Still, it’s a marked improvement from the dire condition many state budgets were in roughly a year ago. Overall, state spending on higher education has increased nearly 10% since 2020, excluding federal stimulus funding, and by 21% since 2017.
The report underscores how impactful federal funds from three stimulus packages have been for higher education and states’ higher education budgets, allowing early cuts to be reversed and funding restored, with help from an economic recovery.
More will be known in the coming months as governors and state legislatures across the country work out their budgets for the fiscal year that begins in July. Budget proposals already released from some states — including Michigan, Arkansas, and Kentucky to name a few — call for increases to state higher education appropriations for fiscal year 2023.
Governors in dozens of other states will be releasing budget proposals in the coming weeks and onlookers are hopeful that an improving economy and surpluses will lead to increased investments in higher education.
Publication Date: 2/16/2022
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