10 Dubious Claims About Higher Ed Decline

A large number of recent reports and articles have heralded the demise of American higher education, either with regard to inadequate financing of the system or the eroding scope of the enterprise. But a closer analysis of the data behind these reports indicates that many of the statements are at best misleading and, more often, half true or simply untrue. Below is further analysis of 10 of the most prominent of these statements.

1) Federal funding for higher education has declined substantially over the past decade. Untrue. Contrary to many assertions about declines in federal funding, all major sources of federal support for higher education have grown substantially over the past decade in real terms when adjusted for inflation. Pell Grant funding, for example, has more than doubled in real terms since 2000, much of it the result of the unprecedented increases in funding that was part of the economic stimulus package of 2009. As federal student loan volume has grown to $100 billion per year and outstanding student loans have reached $1 trillion, federal spending for in-school interest payments, defaults and other student loan related items has also roughly doubled in real terms. Tax expenditures for higher education have also more than doubled in real terms through expansion of tuition tax credits and tax-sheltered Sec. 529 college savings plans. For the other major form of federal support of higher education – funding of university-based research — even with recent slowdowns, the trend in the 2000s was that spending for research at universities or government-sponsored labs grew by roughly 50 percent in real terms.

2) States have been disinvesting in higher education for decades.Half true. State funding per student has declined in real terms since 2000 and especially between 2007 to 2012, when it fell by 25 percent in real terms. But in terms of the longer run, states consistently increased their funding for higher education over the second half of the 20th century; in real terms, state funding per student peaked in the late 1990s. Moreover, trends in state funding per student are very much inversely tied to trends in enrollments. When enrollment growth is rapid, as in the 2000s, per-student funding tends to decline in real terms, but when enrollment growth is slow, as in the 1990s, state funding per student has tended to rise. Fully half the 25 percent decline in state funding per student in the past five years is attributable to a 15 percent increase in public sector enrollments during that time.

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