NPR reported yesterday on a Government Accountability Office (GAO) report which finds that as of Fiscal Year 2012 (the 2011-12 school year), more of public colleges’ revenues came from students’ tuition than from state (public) funding. The following graph from the GAO report shows the breakdown in revenue sources over the previous 10 years:
As a faculty member at Missouri’s flagship public university, all I can say is, “Welcome to the party! What took you so long?” At the University of Missouri, tuition topped State appropriations for the first time in 2004. According to the FY13 Budget Book for the University of Missouri System (which includes four autonomous campuses and two hospital systems), State appropriations constituted less than 15% of total revenue, with another 2% from State grants. The table to the right shows the breakdown by each “business segment” of the University system. For the flagship campus (MU), net tuition and fees were 40% more than State appropriations. The largest source of income for the University came from “sales and services of educational activities and auxiliary enterprises.” That includes things like Residential Life and Campus Dining (which are also paid by students), Parking & Transportation Services, the University Store (which is much more than just textbooks, but includes those as well), and Athletics (which proudly boasts that it is self-funding from ticket sales, radio and television revenues, licensing, etc.).
The neighboring graph from the University’s 2014 Budget Update shows the breakdown of MU’s Operating Budget revenue, which might be considered the heart of the direct educational expenses. It shows that over the past 25 years, State support has dropped from 70% to just 32% of operating revenue. Meanwhile, tuition has increased from just 27% to 62% of operating revenue. And this over a period of time that operating expenditures increased, so tuition is a much bigger slice of an even bigger pie. Looking at the University as a whole (not just operating), students foot the bill for about 33% of total revenues (including room and board) compared to just under 17% in State funding. And that doesn’t include parking fees or bookstore purchases.
Some complain about the cost of higher education skyrocketing, and total expenditures have increased substantially (largely a result of increased administrative expenses). However, when students complain about the costs of higher education, they are focused on their tuition bills. And tuition has gone up at public universities, no doubt. Since 2000, the average annual increase in tuition at MU is about 16% (much of that in the early 2000s), which is much higher than the rate of inflation. But students (and their parents) need to recognize that the reason tuition rates have grown so much is to offset the decline in State appropriations (which not coincidentally, started hitting hard in the early 2000s). Expenditures have gone up nowhere near what tuition has.
Which is all to say, the myth of “public higher education” is really just that; a myth. Yes, there is still some State funding for “public” universities, but it is an increasingly small percentage. Public universities are now much more dependent on tuition–just like private universities–than on State funds. And while that scale may have tipped just recently across the country as a whole, in Missouri it has been that way for quite some time.