Page 212 - Crisis in Higher Education

Government’s Role in Higher Education • 183

$22,995 per year. Middle- and low-income families, even families in the
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lower reaches of the upper-income group, would find it anywhere from
impossible to challenging to pay almost $200,000 for a four-year degree
from a not-for-profit, private university. According to the U.S. Census
Bureau, the median household income in 2015 was $55,775. Thus, a fam-
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ily in the middle of the middle class would pay nearly all of its income
for four years so one of its children could graduate from a not-for-profit,
private university. The cost to attend a public university would be about
half that, which is still too much. Funds from state and local government
help to keep tuition low at public universities, and federal funds enable
students to pay part of the cost regardless of whether they select a public
or private university.
The data in Table 9.3 provide a summary of government funding for
2013–2014. The following sections discuss this two-pronged approach,
describe the different types of government funding, and make recommen-
dations for how the allocations might be improved.

9.3.1 State and Local Funding
Public universities, which are subsidized by state and local tax dollars,
are an alternative to private universities and are important competitors
that serve about 60% of the full-time and part-time students seeking bach-
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elor’s degrees. In 2013, state and local funding totaled $81.9 billion, and
$62.2 billion or about 76% were general appropriations that are used to sub-
sidize tuition for the average student. All of the local funding, $9.2 billion,
was general appropriation dollars. As shown in Table 9.3, the other two
parts were state financial aid grants totaling $9.6 billion, which are schol-
arships and other funds given to state residents, and $10.1 billion in spe-
cific appropriations for research, agriculture, and medical education. State
funding per FTE student varied widely from $3,465 in New Hampshire to
$19,575 in Alaska. Local funding varies widely from zero in some states to
a few thousand dollars per FTE students in others. The following sections
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discuss each of these options and make recommendations.

9.3.1.1 State and Local General-Purpose Appropriations

This is the largest part of the subsidy, and it has been declining, not
in absolute dollars but as an amount provided per FTE student and as
a percent of university revenue. The bottom line is that state and local
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