This study investigates whether public universities respond to declines in state appropriations by increasing nonresident freshman enrollment. State higher education appropriations declined ...substantially during the 2000s, compelling public universities to become more dependent on net-tuition revenue. State policy controls often limit the growth of resident tuition price. Therefore, public universities have an incentive to grow non-resident enrollment in order to grow tuition revenue. Drawing on resource dependence theory, we hypothesize that public universities respond to declines in state appropriations by growing nonresident freshman enrollment. Furthermore, we hypothesize that this response will be strongest at research universities because research universities enjoy strong demand from prospective nonresident students. We tested these hypotheses using a sample of all US public baccalaureate granting institutions and an analysis period spanning the 2002–2003 to 2012–2013 academic years. Fixed effects panel models revealed a strong negative relationship between state appropriations and nonresident freshman enrollment. This negative relationship was stronger at research universities than master's or baccalaureate institutions. These results provide empirical support for assertions by scholars that state disinvestment in public higher education compels public universities to behave like private universities by focusing on attracting paying customers.
Dominant explanations of state higher education policy tend to emphasize economic models that foreground the business cycle or political approaches that cast ideology as fairly fixed. We instead ...foreground changing social context to conceptualize state appropriations as predicted not only by these classic explanations, but also by the interplay of racial representation and political party control. Drawing on the racial backlash hypothesis and quantitative analyses, we show that party control of state government and racial representation in higher education jointly explain state appropriations. Unified Republican governments spent more than Democratic or divided governments when White students were overrepresented. Republicans spent less otherwise. These results suggest that partisan attitudes toward racial representation in higher education may shape state government support for colleges and universities.
The balance wheel hypothesis--a classic tenet of USA state-level policy analysis that suggests state funding for higher education varies in response to macroeconomic cycles--has held up to scrutiny ...over time. However, new social conditions within the Republican Party, namely growing hostility toward independent institutions, call for a more nuanced understanding of the relationship between state budgets and higher education. Drawing on recent research in political science and political economy, we conceptualize declining state appropriations to higher education in Republican-dominated U.S. states as an instance of democratic backsliding. Using a panel of state-level data we found that political partisanship conditioned state appropriations to higher education during and after the Great Recession. Our finding that the balance wheel operated differently in states with and without unified Republican control not only suggests partisan hostility toward higher education is a potentially worrisome indicator of democratic backsliding, but also the importance of updating models to consider the extent to which they still hold as contexts change over time.
We explore a new mechanism to understand state funding for public colleges and universities by leveraging data on the educational experiences of state legislators, specifically if and where they ...received postsecondary education. Using novel, hand-collected data from 2002 through 2014, we provide comprehensive documentation – for the first time in the literature – on the educational backgrounds of state legislators. We find a statistically significant, positive association between the share of legislators who attended their states' public institutions and state funding for their entire public higher-education system. We also find a similar positive relationship between the share of state legislators who attended particular campuses of the state's public university system and funding for those campuses. This relationship is more pronounced among publicly educated legislators who represent legislative districts close to their alma mater's district, and becomes most consequential when the legislator's district contains his or her alma mater. We discuss the implications of our findings for academic studies on how politics and legislators' personal experiences influence support for higher education.
•State legislatures with more in-state public college alumni spend more on education.•This link is more pronounced during the 6-year period following the Great Recession.•This link is more pronounced with legislators representing the alma mater's district.
Public colleges and universities depend heavily on state appropriations and legislatures must decide how much to fund higher education. This study applies punctuated equilibrium theory to ...characterize the distribution of annual changes in higher education appropriations and defines the threshold for a dramatic budget cut. Using data for the 50 states from years 1980 to 2009, this study investigates the relationship between such unique policy events and state characteristics using a Cox proportional hazards model. Results show that economic and political conditions are most predicative of dramatic budget cuts. High unemployment rates increase the probability of cuts while rapid increases in tax revenue and wider income inequality are protective against cuts. Unified Republican and unified Democratic governments are both more likely to cut spending compared to a divided government. Sensitivity analyses of state characteristics associated with small budget cuts demonstrates that large cuts are indeed unique events catalyzed by different conditions.
The 2010 health reform bill, the Patient Protection and Affordable Care Act, included a provision that would expand eligibility of the public insurance program Medicaid. One concern raised about ...implementing the Medicaid expansion is that it would lead to reductions in state spending in other policy domains. In this study, we test whether adopting expansion is associated with changes in higher education appropriations. Using a difference-in-difference model, we find no significant changes in higher education appropriations between expansion and non-expansion states. Implications of these findings for universities and state policymakers are discussed.
Over the past few decades, public universities have faced significant declines in state funding per student. We investigate whether these declines affected the educational and research outcomes of ...these schools. Declining funding induced public universities to shift toward tuition as their primary source of revenue. Selective research universities enrolled more out-of-state and international students who pay full fare and increased in-state tuitions, moderating impacts on expenditures. Public universities outside the research sector had fewer options to replace stagnating state appropriations, requiring diminished expenditures and increased in-state tuitions. We find suggestive evidence that cuts have negatively affected research, and more definitive evidence that they adversely affected degree attainment at both the undergraduate and graduate levels.
Objective: We investigate whether performance funding—an increasingly prevalent state policy that allocates appropriations based on outcomes that prioritize retention and completion—places ...minority-serving institutions (MSIs) at a financial disadvantage due to these institutions serving a greater proportion of historically underrepresented students. Method: Using data from 2004-05 to 2014-15 within Texas and Washington, we compare state funding allocations to 2-year institutions designated as MSIs versus non-MSIs, before and after performance funding policies are implemented. We additionally compare funding allocations for each performance metric. Results: On average, MSIs in Texas and Washington are allocated the same or less in per-student state funding after performance funding compared to non-MSIs. MSIs in Texas are advantaged in performance metrics for transfers and for gateway courses in math (credit-bearing courses that serve as a “gateway” to continued study), and MSIs in Washington are advantaged in developmental education courses. However, MSIs are typically disadvantaged in metrics for degree completions. Conclusion: Our findings suggest that MSIs in Texas and Washington are not financially disadvantaged due to performance funding because the funding formulas in both states incentivize milestones in addition to outputs. We recommend that policy makers consider incorporating performance metrics for developmental education and gateway courses in addition to retention rates and degree completions, and tailor metrics to the student population of institutions to mitigate the potentially inequitable funding consequences of performance funding policies.
When state appropriations decrease, public universities respond by raising tuition. Students borrow more in response to both tuition increases and appropriation cuts. This article investigates the ...feedback of how borrowing and tuition influence state appropriations. Using a panel data set of 450 four-year public universities from 1999 to 2012, we employ three-stage least squares techniques to control for the endogeneity between state appropriations, tuition and student borrowing. There is evidence that state policy-makers respond to increases in university tuition and student borrowing by decreasing future appropriation levels. After controlling for the effect of appropriations on tuition and borrowing, a one-dollar increase in student borrowing reduces state appropriations per student by $0.06, and a one-dollar increase in tuition results in a decrease of $0.45 in state appropriations per student. When universities increase tuition for reasons other than a reduction in state appropriations, policy-makers respond with a significant cut in future appropriations which could signal an incentive strategy.
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