State Funding for Higher Education Slipped in Fiscal 2016

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States remained stingy in funding public institutions of higher education last year, and midyear cuts to fiscal 2017 budgets and early signs from fiscal 2018 discussions suggest many will continue to dole out limited funds to their local colleges and universities.

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Average per-student funding fell to $6,954 in fiscal 2016 from $7,082 in fiscal 2015, according to a new report from the State Higher Education Executive Officers Association. The nationwide decline, which takes into account an inflation measure based on higher-education costs, was due in large part to a dramatic drop in Illinois, where a nearly two-year-old fiscal crisis has all but frozen the state’s coffers.

Thirty-three states actually increased their allocations for higher education last year, but average state and local government support is still lower than prerecession levels in 45 states. Funding rose slightly over that period in Indiana, Montana, Nebraska, and by a few thousand dollars per student in Wyoming and North Dakota.

Nationally, local per-student funding is 17% below 2008 levels.

“The recovery has been kind of tenuous” over the past year, especially in oil-rich states, said Andy Carlson, principal policy analyst at the association of state higher-education officials. While North Dakota, Wyoming and Alaska had been plowing more money into higher education in recent years, some of those gains are already being reversed.

As public funding for public universities dries up, schools have had to rely more on tuition revenue to cover operational expenses. The California State University system last month approved a nearly 5% tuition increase for next school year, while the University of California system’s oversight board approved a 2.5% increase.

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Tuition funds covered 47.8% of all educational expenditures in fiscal 2016, near the record 48% reached in fiscal 2013. Schools in half the nation’s states now get more money from tuition than from their local governments, according to the report.

“Some states, to even call it a state system is stretching it,” said Mark Hagerott, chancellor of the North Dakota University System. In that state, where an oil and gas boom helped fuel a 44% increase in higher-education funding over the past decade, tuition accounts for slightly less than half of all education revenue.

In Alabama, meanwhile, more than two-thirds of total educational revenue comes from net tuition, compared with 45.1% a decade earlier. Schools in Delaware rely on tuition to cover three-quarters of educational expenditures, and in Vermont tuition contributes 86.3% of all educational revenue.

Write to Melissa Korn at melissa.korn@wsj.com

(END) Dow Jones Newswires

April 20, 2017 00:15 ET (04:15 GMT)

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State Funding for Higher Education Slipped in Fiscal 2016

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