Higher Education Funding, Pt. 1

Around the country, legislatures are intensely debating funding for public higher education.

For #faculty, #staff, #administrators and #boards, It’s important to understand the nuance of public higher education funding, which I have been studying for the past year. Here goes…

More and more, states are transitioning from their historical approaches, to models that prioritize ROI and workforce alignment.

Driving this narrative, some states argue that they have invested a great deal in higher ed (which may be technically true), but have not gotten enough return (which I’d argue is not true).

But when you look at the specifics and take into account a variety factors, realities change.

*SHEEO reports that the Higher Education Cost Adjustment (HECA) increased 3.6% from FY2023 to FY2024, while national real education appropriations per FTE rose only 0.8% after inflation.

*Inflation outpaces appropriations. Funding isn’t keeping up with costs that are outside higher ed’s control.

*The use of one-time federal stimulus dollars to plug higher ed’s historically underfunded budgets, as opposed to consistent formula and data driven funding.

*Higher ed being forced to use a large portion of its appropriations to fund deferred maintenance as well as legacy retirement liabilities.

So what might appear to be adequate or purported “over” funding on paper, is actually neutralized and even deficient, when funds are gobbled up by these realities.

Bottom line is that in many states, not enough funding reaches the actual classroom and student support, and leaves nothing for innovating to meet 21st century student and societal demands. This is the problem we need to solve for.

It’s complicated—we don’t argue this terribly well in higher education. Sometimes we make the argument, with data, and it falls on deaf ears.

So, Leaders: what can we do to make this case more effectively? How can we bring more partners to the table? What are we not doing that we should and must do? What do we need our government and industry and community partners to bring to the table?

If we don’t get this right, what will happen to our institutions and our students? Comment please!

#highereducation #highereducationleadership #funding #workforcedevelopment #economicdevelopment #leadership