While states cut back spending after the 2008 financial crisis hammered their budgets, those subsidies resumed their long-term upward trend by 2019. Last year, they averaged $12,081 per student, up from $7,677 in 1980, adjusted for inflation.
There is considerable variation between states: 26 consistently increased funding, 19 held roughly steady and five cut spending. But, on the whole, government is spending more on higher ed.
Why does the conventional wisdom suggest the opposite? Gillen finds that advocates often cherry-pick comparison years. For example, they’ll start with an abnormally high year for funding (2001) and end with the post-financial crisis nadir of 2012.
Comparisons also tend to use a bespoke inflation measure, called the Higher Education Cost Adjustment (HECA), rather than the standard measure. This does not adjust for changes in the general price level but for assumed increases of input costs, such as professor salaries. That’s a helpful way to examine cost pressures on colleges, but it leaves out broader inflationary context.