State support for higher ed projected to rise 8.5% in fiscal 2022 before inflation

Higher Ed Dive

Natalie Schwartz

February 1, 2022

Dive Brief: 

• State support for higher education is projected to increase 8.5% in fiscal 2022 over the previous year, according to the latest Grapevine survey, though this figure doesn’t account for inflation or federal stimulus funds.

• The increase marks the first time state support for higher education would surpass $100 billion, according to the survey, which is administered by the State Higher Education Executive Officers Association and Illinois State University’s Center for the Study of Education Policy. Just five states reported year-over-year declines in higher ed funding.

• The jump in funding is partly due to states reversing higher ed cuts implemented during the early days of the coronavirus pandemic. Some of the states that filled those budget gaps using federal relief funding were once again able to fund higher education with their own support.

Dive Insight: 

The Grapevine report offers a brighter outlook for public higher ed funding than it has in recent years. However, the inflation rate from fiscal 2021 to fiscal 2022 — which ends in June for most states — isn’t yet known, and it will likely eat up a substantial chunk of the increase. Inflation rates in recent months have hit levels not seen in decades.

Credit ratings agencies agree inflation poses a risk to colleges. Although the move back to in-person learning, high endowment returns and strong state budgets helped raise college revenues, inflation is undercutting some of that growth.

The agencies also note that colleges will have to adjust to federal coronavirus relief drying up. Along with about $76 billion in direct relief to colleges, spending packages sent discretionary funds to states.

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