State Spending on Higher Education Has Dropped. Hispanic and Black Families are Bearing the Costs

While state revenues have generally returned to pre-recession levels, state spending on higher education is 16 percent lower than in 2008 – and the higher tuitions at public colleges and universities intended to fill the funding gap are especially punitive for low-income families, according to a new report by the Center on Budget and Policy Priorities.

A decade after the Great Recession, state spending per student on higher education remains 16 percent lower than 2008 levels so public colleges and universities raised tuition fees 36 percent between 2008 and 2018 while the real median income grew only 2 percent, according to the report by the Center on Budget and Policy Priorities, which conducts research aimed at reducing poverty.

The center analyzed 49 states from 2008 to 2018, excluding Illinois because data was only available through 2017, and found that only four states are spending more on colleges now than in 2008 — California, Hawaii, North Dakota, and Wyoming.

Nationally, the average cost of in-state tuition in more than 20 states absorbs over 20 percent of black and Hispanic people’s median household incomes, significantly higher than the 15 percent average for white households, the report, which was released last week, said.

South Carolina’s and Pennsylvania’s in-state tuition absorbed the highest percentage of black and Hispanic median household incomes.

 In South Carolina, just over 37 percent of the median household income for black people went toward the tuition fees — $12,194 of their annual median income of $32,175. In Pennsylvania, Hispanics spent about 35 percent of their median income — $13,950 of $39,973.

Even in Maryland, where just under 15 percent of black median household incomes goes toward tuition, Derrick Hinton, a sophomore at Bowie State University in Maryland and president of the university’s NAACP chapter, said tuition has risen over $2,000 since last year.

“It’s supposed to help us more than be a burden and at the moment it feels like a burden because we’re paying all this money with the limited programs we have,” said Hinton.

Although he described his family as middle class, he said the weight of his and his sibling's in-state tuition payments has altered his family’s lifestyle.

“My parents already put on extra hours, staying at work until 10 o’clock at night, working from 7 a.m. to 10 p.m.,” Hinton said. “With two of us being in college and only one of us on scholarship, it takes a toll.”

Governors John Kasich of Ohio, and John Hickenlooper of Colorado, focused on tuition as a key problem in higher education at the recent Brookings Institution event.

“At a certain point these universities are not going to be able to raise their tuitions year after year,” said Hickenlooper. “They are going to hit a ceiling.”

New York’s Excelsior Scholarship and Tennessee’s Promise programs sought to alleviate financial pressures that hit lower-income students and families disproportionately.

The Institute for Higher Education Policy evaluated both states’ programs and found that in Tennessee, "low-income students who receive federal Pell Grants receive less, if any, Promise funding than students who are ineligible for Pell.” Similarly, in New York, the group said, “low-income students who receive need-based Pell Grants and New York’s Tuition Assistance Program grants receive less — if any — Excelsior funding than students who are ineligible for Pell or TAP.”

“The lowest income students today need to find a way to finance more than 150 percent of their families’ annual income in order to go to a four-year college for one year,” said Mamie Voight, vice president of policy research at the institute. “That’s after taking into account all of the grants and scholarships the students received.”

Despite the higher costs, lower income students are enrolling at rates that are about the same as high-income students 40 years ago, said Voight.

“When more and more people go to college then you need more and more money to fund it,” said Sandy Baum, a nonresident fellow in the Education Policy Program at the Urban Institute. “They haven’t figured out how to do that.”

Thomas Harnisch, director of state relations and policy analysis at the American Association of State Colleges, said tuition income doesn’t come close to covering the costs of running colleges and universities. Harnish also said university administrators have to weigh improving campus infrastructure and hiring faculty against students’ interest in holding down tuition.

“At the campus level they have been making cuts. They have been increasing class sizes, cutting programs, cutting administrative programs,” he said. “In places like Wisconsin, they’ve had to offer fewer classes, larger class sizes. Sometimes students can’t get the classes they need to graduate.”