Trends and Patterns in Higher Education Finance



Trends and Patterns in Higher Education Finance

Enrollment and Tuition/Fees at Institutions of Higher Education

The overall enrollment and tuition cost for almost all institutions of higher education in Connecticut, Hawaii, Michigan and Missouri have increase from 2000 to 2006. The smallest increase was a 4% in the state of Hawaii while the largest was 30% increase in the state of Missouri. The following information was gathered from the National Center for Public Policy and Higher Education’s Measuring Up Report Card on Higher Education:

| |Enrollment in 2000 |2006 |Change |%change |

|Connecticut | | | | |

|4yr public |39670 |49421 |9751 |24.5% increase |

|2yr public |40326 |45743 |5417 |13.4% increase |

|4yr private |38385 |41353 |2968 |7.7% increase |

| | | | | |

|Hawaii | | | | |

|4yr public |15139 |18267 |3128 |20.6% increase |

|2yr public |24899 |25898 |999 |4% increase |

|4yr private |12252 |12689 |437 |3.5% increase |

| | | | | |

|Michigan | | | | |

|4yr public |196964 |221471 |24507 |12.4% increase |

|2yr public |195392 |211174 |15782 |8% increase |

|4yr private |72867 |93312 |20445 |28% increase |

| | | | | |

|Missouri | | | | |

|4yr public |96922 |105792 |8870 |9.1% increase |

|2yr public |73987 |86241 |12254 |16.5% increase |

|4yr private |74328 |97248 |22920 |30.8% increase |

Analyzing the information above shows that largest increases in enrollment were for four-year public schools except for Missouri, which had the most growth for four-year private schools. Michigan saw the largest total enrollment increase of 60,734 students. Missouri had the second largest increase with 44,044 additional students enrolling in 2006 compared to 2000. Connecticut and Hawaii each saw increases in enrollment of 18,136 and 4,564 respectively.

What are the interesting things to think about when analyzing this information? It is interesting to note that the largest increase in enrollment for Missouri was in four-year private and two-year public higher education institutions and not four-year public instituitions. This could be due to better financial aid offered by private institutions, lower costs associated with two-year institutions, or potentially the perceived low quality of education at four-year institutions. Hawaii had the lowest increases in enrollment. We can assume this is due to the small size of the state and its remote location from the main United States. Its low increases might also be due to the high cost of living that is typically associated with living in Hawaii. Connecticut and Michigan show expected increases in enrollment for all their higher education institutions.

The following graph shows the cost of tuition in higher education for each state from 2000 to 2006:

|Connecticut |2000 |2006 |Change |% Change |

|4yr public |$4,270 |$6,710 |$2,440 |57.1% increase |

|2yr public |$1,814 |$2,536 |$722 |39.8% increase |

|4yr private |$18,301 |$26,197 |$7,896 |43.1% increase |

| | | | | |

|Hawaii | | | | |

|4yr public |$2,788 |$3,235 |$447 |16% increase |

|2yr public |$956 |$1,225 |$269 |28% increase |

|4yr private |$6,800 |$10,280 |$3,480 |51.1% increase |

| | | | | |

|Michigan | | | | |

|4yr public |$4,134 |$6,943 |$2,809 |67.9% increase |

|2yr public |$1,618 |$2,082 |$464 |28.6% increase |

|4yr private |$9,896 |$13,483 |$3,587 |36.2% increase |

| | | | | |

|Missouri | | | | |

|4yr public |$3,389 |$5,835 |$2,446 |72.1% increase |

|2yr public |$1,311 |$2,249 |$938 |71.5% increase |

|4yr private |$10,779 |$15,881 |$5,102 |47% increase |

What can we conclude from the information on tuition change from 2000 to 2006? The first thing to mention is that the highest dollar amounts for each state was for four-year private institutions. The lowest was Michigan with an increase of $3,587, but the lowest overall cost for four-year private was Hawaii with a tuition cost of $10,280. It is also interesting to note that the highest percentage increase for every state, except Hawaii, was for four-year public institutions. This is interesting because we can likely conclude that four-year public institutions are now being forced to cover more costs. This could be due to a decrease in state appropriations or an increase in costs to maintain a college/university. Hawaii still maintains the lowest overall tuition at four-year public schools with a cost of $3,235. The increase for Hawaii was $447 at four-year public schools, which $2000 less than any of the other states we compared. Hawaii is likely keeping the cost low because the cost of living in Hawaii is higher than other states.

State Appropriations

| |

|State: |Connecticut |Hawaii |Michigan |Missouri |

| |$649,663,000 |$241,346,000 |$1,397,011,000 |$841,584,000 |

|Sources: | | | | |

|Federal government |72.10% |79.20% |58.70% |64.50% |

|State and local governments |1.10% |3.70% |6.00% |4.40% |

|Industry |3.90% |8.80% |4.40% |3.40% |

|The institution itself |12.70% |8.20% |25.30% |22.70% |

|Other |10.20% |0.10% |5.60% |4.90% |

The above graph shows the amount of funding per state allocated towards research. These numbers are based on 2006 data made available through the Chronicle of Higher Education. The largest amount of funding is spent by Michigan with approximately $1.4 billion. The lowest was Hawaii with only $241 million being allocated towards research. However, Hawaii has recently been in contract negotiations with the United States Navy to begin military research at one of the major public universities. This potential partnership has both support and scrutiny by Hawaii’s higher education system. The higher education system could see increase funding from this partnership, but it would require the information to be kept classified. This compromises the academic ideals where learning in open and not kept secret.

It is interesting to note the difference in where this money comes from across the various states. For instance, 25% of Michigan’s research funding comes from the institutions. Missouri follows closely behind with around 23% being spent by higher education institutions in Missouri. The main source of research funding for each state came from the federal government. Hawaii had the largest with 79% coming from directly from the federal government. However Hawaii did have the largest support from industry with almost 9% of their funding coming directly from various industries. We can assume that because of Hawaii’s climate and agricultural uniqueness they obtain additional funding for research in the agricultural sector. The highest state appropriations for research came from Michigan with a total of 6%. Almost all of the states had very low funding from state and local government with a majority of funding coming from federal government, the higher education institution, or from industry.

Merit and Need Based Financial Aid

| |Need Based |Non-need based |Non-grant based |Total |

|Connecticut |$36,433,000 |$340,000 |$29,000,000 |$65,773,000 |

|Hawaii |$418,000 |$0 |$9,700,000 |$10,118,000 |

|Michigan |$96,076,000 |$105,134,000 |$49,663,000 |$250,874,000 |

|Missouri |$24,293,000 |$32,839,000 |$11,297,000 |$68,430,000 |

The above graph shows the dollar amount allocated to students based on need and merit in the form of financial aid. The highest amount of financial aid appropriated by the four analyzed states was Michigan with $250 million. The state of Michigan awards around $190 million more than any other state we analyzed in financial aid. Another interesting column to be notice is the non-need based financial aid. The state of Hawaii and Connecticut award almost no aid based on non-need (merit) requirements. Connecticut awards only $340,000 while Hawaii gives no money based on merit. However, Hawaii’s total cost for tuition is much lower than many other states which can explain why there is so little in aid awarded.

The amount of aid awarded by Connecticut and Missouri is almost identical at $65 million and $68 million respectively. However these figures are interesting when thinking about the number of students enrolled in each state. Missouri has around 150,000 more students enrolled than Connecticut, but has only about $3 million more awarded in financial aid. It is also interesting to note the difference in how these states appropriated funds based on need, non-need, and non-grant based aid. Missouri and Michigan appropriate a majority of their financial aid in non-need based aid while Hawaii appropriates almost all of its financial aid in the form of non-grant based aid. Connecticut divides its financial aid between need based ($36 million) and non-grant based financial aid ($29 million).

Overall themes

There are a few overall themes that we can examine from the trends in state appropriations, enrollment, research funding allocation, and financial aid being awarded. The first thing to note is that costs are continuing to increase in every state. States are asking for more money to cover the costs of research, salaries and overhead of operating expenses. We know that student enrollment is always increasing which should mean an increase in tuition dollars. However, we can also see that all states are increasing tuition to help cover the costs of operating their specific institution of higher education. Government officials, university officers, and students will need to work together in the future to find additional sources of revenue to help offset the increasing tuition and operating costs.

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