State Funding, Private Donations to US Colleges Increasing

09 March, 2019

After several years of financial difficulties, colleges and universities in the United States may finally be seeing their economic situation improving.

Recent studies show that state support for American higher education increased last year for the fifth year in a row. And financial gift-giving to institutions reached its highest level on record.

But some experts still worry that there are still improvements that must be made.

Every year, researchers at Illinois State University publish a report on the levels of financial support that state governments provide to higher education. The group released its findings for the 2018-2019 fiscal year in January.

The report is known as the Grapevine. The latest one shows that, overall, state spending on higher education increased by about 3.7 percent.

James Palmer is a professor of higher education at Illinois State, and the editor of the Grapevine. He told VOA that any amount of growth is a good sign, because colleges and universities across the country have dealt with serious funding problems since 2008.

That year, the U.S. economy faced a major recession, causing many states to reduce their spending -- including on higher education. This led to many schools increasing tuition prices in order to cover their operating costs.

Palmer says that, in 1992, student tuition payments represented about 28 percent of the money colleges and universities were generating. In 2017, tuition payments made up 47 percent of that money.

Former University of Southern California student and film director George Lucas, left, and USC president Steven Sample talk with reporters before the ceremonial groundbreaking for a new building at the USC School of Cinematic Arts.
Former University of Southern California student and film director George Lucas, left, and USC president Steven Sample talk with reporters before the ceremonial groundbreaking for a new building at the USC School of Cinematic Arts.

The effects of changing support
Many experts considered increasing tuition costs to be creating unnecessary additional barriers, especially for poorer students.

But Palmer argues that states were not trying to make it harder for students to enter higher education. They simply had other competing needs in their budgets, such as healthcare and public education for children. And in many states, lawmakers have been reducing taxes on their citizens.

Palmer admits that the past five years of increases in state funding have been fairly small. But the increases do demonstrate that lawmakers do value higher education and the effects it has on society.

"Regardless of the long-term decline in state funding that we've seen over the past 40 years, I believe that state legislators still feel very strongly that their states must maintain strong higher education systems," said Palmer. "It's just that economic conditions have made it very difficult for states to increase funding for higher education beyond ... [what] we have seen."

Gifts and donations from outside groups are also on the rise. They reached $46.73 billion in 2018. That number comes the Council for the Advancement and Support of Education, or CASE. The organization produces a yearly report on voluntary support for American higher education.

Linda Durant is the vice president of development for CASE. She notes that donations to schools increased by 7.2 percent last year. Gifts of these kinds have played an important part in the finances of even the oldest American colleges and universities, Durant told VOA.

Donations from companies have gone down in recent years, but gift-giving from former students and outside organizations is rising.

Huge donations, especially -- such as the $1.8 billion businessman Michael Bloomberg gave to Johns Hopkins University last November -- have gotten a lot of media attention.

But Durant notes there has also been an increase in smaller donations, mostly due to efforts on the parts of the schools. "Higher education has done a better job of really publicizing the good work that they're doing and talking about the success of their students when they graduate," she said.

How the money may be used
Some experts say that private donations do not have as much of an effect on improving high education, as they usually come with special requirements. A donor may demand that the school use the financial gift on a given project – like building a new laboratory or sports center. State funding usually goes toward the general operations of the school.

But Durant notes that more of these gifts have been going towards things like student financial aid. That was the case with Bloomberg's donation. In fact, CASE's latest report found that gifts that went directly to fund general operations increased by about 6 percent last year.

Andrew Carlson is vice president of finance policy for the State Higher Education Executive Officers Association. His organization helps gather data for the Grapevine.

Carlson says that it is mostly large, well-known schools that are able to depend on donations.

He also notes that, average state spending per college student is still $1,000 less than it was right before the recession hit in 2008. And during the 2018-2019 fiscal year, five states actually decreased their spending on higher education.

He worries about what may happen when the next economic recession hits.

"Will...states and institutes of higher education just be able to raise tuition?" Carlson said. "Will this kind of status quo be able to go forward again?"

I'm Pete Musto.
And I'm Dorothy Gundy.

Pete Musto reported this story for VOA Learning English. Ashley Thompson was the editor. We want to hear from you. How has private and public financial support for higher education changed in your country in recent years? Write to us in the Comments Section or on 51VOA.COM.


Words in This Story

institution(s) – n. an established organization

fiscal yearn. a 12-month period used by a government, business, or organization to calculate how much money is being earned or spent

fundingn. the process of providing money for something

tuitionn. money that is paid to a school for the right to study there

declinen. to become lower in amount or less in number

maintainv. to cause something to exist or continue without changing

graduatev. to earn a degree or diploma from a school, college, or university

status quon. the way things are now