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Tuition Climbs as State Funds Dwindle at U.S. Public Colleges

Tuition Climbs as State Funds Dwindle at U.S. Public Colleges

(Bloomberg) -- Tuition as a source of revenue for four-year public colleges and universities has surpassed government funding in more than half of U.S. states, creating a burden on much of the student body that’s seen debt levels spiral, according to a Washington think tank.

Some 27 states expected students to chip in more money for their education in 2018 than was provided by state and local sources, an increase from just 10 states a decade ago, the Center on Budget and Policy Priorities said in a report released this week.

As recently as 1988 only two states, New Hampshire and Vermont, charged tuition that exceeded state funding.

Tuition Climbs as State Funds Dwindle at U.S. Public Colleges

States on average spent 13% less per student last year, adjusted for inflation, than they did in 2008, the beginning of the Great Recession. Alabama, Arizona, Louisiana, Mississippi, Oklahoma and Pennsylvania cut funding by 30%, while Arizona slashed expenditures per student by 55%, according to the center.

Tuition Climbs as State Funds Dwindle at U.S. Public Colleges

In the meantime, the sticker price for tuition at public colleges has climbed 37% since the 2008 school year. It doubled in Louisiana and jumped 60% or more in Alabama, Arizona, California, Colorado, Florida, Georgia and Hawaii, according to the report.

“This long-term decline in state funding and growing expectation that students and families shoulder a greater load for college education has created a more costly and fraught path to completing college,” CBPP researchers said in the report.

Not surprisingly, debt levels have soared. About 43 million people carry student debt and the average amount is $33,500, according to a recent study by the New York Federal Reserve. A staggering 7% of borrowers, equating to 3 million people, have balances of $100,000 or more in education loans.

The CBPP researchers said the burdens created by lower funding fall disproportionately on students of color, low-income and those from non-traditional backgrounds. Among the solutions, they said, is for lawmakers to boost funding for public colleges and increase need-based aid programs.

“Rising tuition threatens affordability and access, leaving many students and their families -- including those whose annual wages have stagnated or fallen over recent decades -- either saddled with onerous debt or unable to afford college altogether,” the researchers said.

A few states bucked the trend of lower per-student spending on higher education over the decade through 2018, most notably Illinois, North Dakota and Wyoming.

--With assistance from Maria Elena Vizcaino and Wei Lu.

To contact the reporters on this story: Virginia Van Natta in San Francisco at vvannatta@bloomberg.net;Alex Tanzi in Washington at atanzi@bloomberg.net

To contact the editors responsible for this story: Linus Chua at lchua@bloomberg.net, ;Sarah McGregor at smcgregor5@bloomberg.net, Ros Krasny, James Ludden

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