Demos: "Dramatic" decline in state funding to blame for tuition hikes

A new report out from Demos today confirms what students and their families have been experiencing for some time:  state disinvestment in higher education is the main reason for tuition increases over the last decade or so.

During the 2001 to 2011 time period, state funding per student fell $3,081 at research universities and $2,067 at nonresearch universities, a decline that was “in near lockstep with tuition increases,” according to the report. The result is a “dramatic shift” in who is paying for the cost of a public education.

The Causes of Rising Tuition

The report also debunks allegations that rising tuition costs are due primarily to administrative bloat, increased student aid, or spending on campus construction.

We find that declining state appropriations for higher education is indeed the primary driver of rising tuition, responsible for 79 percent of tuition hikes at public research universities between 2001 and 2011 and 78 percent of tuition hikes at public master’s and bachelor’s universities over the same decade. Increased spending on administration accounts for another 6 percent and 5 percent, respectively, at the two categories of institutions, and increased grant and loan aid has had a negligible effect, at most. Finally, the purported construction boom’s impact on tuition has been minimal as well, as we estimate spending on construction has accounted for 6 percent of tuition increases at both research and master’s/bachelor’s universities.

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