Students Are Bankrolling Public Colleges Now More Than Ever Before

State funding used to account for a greater portion of the schools' revenue, but times have changed.

Jason Bache/Flickr

Thanks to state and federal grants, public colleges and universities have historically been the most economical way to get a quality education in the United States.

But little by little, through funding cutbacks and tuition hikes, these institutions have shifted their financial dependencies, relying less on state coffers and more on students (or their parents). According to a new study by the U.S. Government Accountability Office, these schools now receive a greater portion of revenues from student tuition than from state funding.

The study looked at the total breakdown of college revenues between 2003 and 2012. In 2003 state funding accounted for 32 percent of total revenues, while student tuition supplied just 17 percent. By 2012, the tables had turned: Students paid for 25 percent of total revenue, while states funded 23 percent. The additional revenue comes from federal grants and other sources, including private gifts and grants and auxiliary revenue streams, like hospitals and football games.

Public College Revenue From Tuition and State Funding

Here’s the total percentage breakdown of revenue:

Percent of Public College Revenue From All Funding Sources

The increase in tuition revenue seems—logically—to have come from a hike in tuition. In 2012 dollars, the average net cost to students—a value that measures what students actually pay, after all expenses and financial aid—rose 19 percent, from $1,874 in 2003 to $2,226 in 2012. (This might not seem like a big dollar amount compared to oft-cited astronomical tuition numbers, but keep in mind that we’re looking at all public schools, including community colleges, which are generally much cheaper.)

The good news is that, since 2012, state funding seems to have increased somewhat. But that’s no big surprise: Most states’ economies are finally starting to bounce back from the recession, and can roll back the drastic budget cuts they made during the down years.

In real dollars, however, state funding is still less than it was before the recession. And if history is any indicator, we shouldn’t expect these trends to change. Funding has been falling, and tuition has been rising, for the past 25 years.