Colleges Now Get More Money from Students Than From States

Students and Families Face Growing College Costs

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Activist Demonstrate Against High Cost Of College. David McNew/Getty Images

Growing tuition fees coupled with shrinking state funding has resulted in America’s public colleges now getting more money from students than from the states, according to the Government Accountability Office (GAO).

Again proving the “good old days” never last forever, the GAO reported that from fiscal years 2003-2012, state funding for public colleges and universities “decreased by 12 percent overall while median tuition rose 55 percent across all public colleges.”

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During that period, the percentage of total revenue realized by public colleges from state funding fell from 32% to 23%, noted the GAO, suggesting that the decline in state funding for public colleges may have been due in part to the impact of the recent recession on state budgets.

And, of course, as state funding to colleges went down, tuition and other student fees went up. A lot.

The GAO report shows that starting in 2003, tuition revenue for public colleges increased from 17% to 25% of total revenue, surpassing state funding by fiscal year 2012. At the same time, reported the GAO, average net tuition, which is the estimated tuition after grant aid is deducted, also increased by 19 percent.

“These increases have contributed to the decline in college affordability as students and their families are bearing the cost of college as a larger portion of their total family budgets,” wrote the GAO.

What About Federal Support for Education?

Federal support for higher education is mainly targeted at funding student financial aid, rather than state-based college programs.

According to the GAO, federal aid to students in 2013 exceeded $136 billion in loans, grants, and work-study programs.

The GAO suggested ways in which the federal government could encourage the states to make college more affordable, such as creating new grants, offering more information on college costs, or changing current federal student aid programs.

“Each of these approaches may have advantages and challenges, including cost implications for the federal government and consequences for students,” noted the GAO.

The GAO made no specific recommendations to federal agencies it its report.