State and local funding for higher education rose 3.7% in FY 2023

Higher Ed Dive

Natalie Schwartz

May 8, 2024

Dive Brief: 

• State and local funding for public higher education rose 3.7% in the 2023 fiscal year after accounting for inflation, marking the 11th straight year of increases, according to an annual report from the State Higher Education Executive Officers Association released Wednesday.

• Appropriations per full-time equivalent enrollment at public institutions — which translates credit hours into full-time status — reached $11,040, the report found. This is only the second time that appropriations per FTE have exceeded amounts seen since 2008, which SHEEO considers pre-Great Recession levels. The Great Recession lasted from December 2007 to June 2009.

• The per-FTE increase is attributed in large part to rising state funding for higher education and federal coronavirus relief given to states. Dramatic declines in FTE enrollment were also a major contributor, as dwindling headcounts have resulted in public funding being spread among fewer students.

Dive Insight: 

The report comes several years after a short-lived recession in 2020 caused by the pandemic. Usually, state appropriations decrease and higher education enrollment increases in the years following an economic downturn, but the new report finds those trends have been reversed.

Net FTE enrollment, excluding medical students, fell 0.5% to 10.2 million students in 2023, marking 12 years in a row of enrollment declines. Overall, that figure has plummeted 12.1% since 2011, when it peaked following the Great Recession.

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