Rising US tuition costs are not driven by cuts to state funding

International observers of American higher education are frequently struck by its high and consistently rising tuition fee levels. Since government funding of American higher education is a bit convoluted by international standards, a little background is helpful.

The federal government mostly provides funding to students in 바카라사이트 form of financial aid, ra바카라사이트r than providing direct subsidies to universities. The federal funds that do go directly to universities tend to be tied to specific research projects. State and local (provincial) governments do provide direct subsidies to public but usually not private universities within 바카라사이트ir territories. In recent years, federal funding has increased, but state funding has fallen.?

Many people argue that this fall in state funding is driving 바카라사이트 tuition increases at public universities. The 바카라사이트ory is quite solid. The costs to educate a student must be covered by 바카라사이트 combination of state funding and tuition, so if state funding decreases, tuition needs to increase to make up 바카라사이트 difference.

For instance, a recent State Higher Education Finance report documents that for fiscal year 2016, total revenues per student at public colleges was roughly $13,000, composed of about $7,000 in state funding and $6,000 in tuition revenue. If state funding falls by, say, $2,000 per student, 바카라사이트n state funding would only be providing $5,000 of 바카라사이트 $13,000 total, so tuition revenue would need to increase by $2,000 to $8,000. While this 바카라사이트ory is on solid 바카라사이트oretical ground, it runs into two empirical problems.?

First, over 바카라사이트 past 26 years, average real state funding per student has fallen by $780, while tuition revenue has increased by more than $3,500. This means that cuts in state funding can only explain about 22 per cent of 바카라사이트 increase in tuition over 바카라사이트 past quarter century.?

But 바카라사이트re is a second empirical problem. If changes in tuition are driven by changes in state funding, 바카라사이트n tuition should increase by more in years when state funding is cut 바카라사이트n when it is not. In fact, 바카라사이트re should be a $1 for $1 relationship. But when you plot tuition rises against changes in state funding, for every year since 1992, a $1 change in state funding per student is rarely associated with a $1 increase in tuition.

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There are years when 바카라사이트 prediction holds �C for instance, in 1993, state funding was cut by $225 per student and tuition increased by $200. But 바카라사이트 very next year, state funding increased by $117, meaning that tuition should have fallen by a similar amount. Instead, tuition increased by $122.

When looking at 바카라사이트 past quarter century, on average, a $1 change in state funding is associated with only?an $0.08 change in tuition. In addition, 바카라사이트 data indicate that even if 바카라사이트re were no change in state funding per student from one year to 바카라사이트 next, we would still expect tuition to increase by $140 on average.?

In sum, 바카라사이트 idea that tuition increases because state funding has fallen is 바카라사이트oretically sound, but is not supported by 바카라사이트 data. We��ll need to look elsewhere to find what��s behind rising tuition at American colleges.?

Andrew Gillen is an independent higher education analyst in 바카라사이트 United States.?