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Funding swings create persistent pressures for colleges and universities that rely on state appropriations for staffing, student aid, and core services. When public investment falls, tuition and fee burdens often rise, while states may also cap tuition increases. The brief analyzes historical trends through recessions and the pandemic, and highlights new fiscal constraints tied to proposed caps on indirect costs for funded research.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/nea-research-brief-state-funding-update-the-fiscal-and-political-crossroads-facing-public-higher-education/586183/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/nea-research-brief-state-funding-update-the-fiscal-and-political-crossroads-facing-public-higher-education/586183.png","ImageObject",300,407,{"name":92,"@type":93},"Taylor Morgan","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-10-15",true,{"@type":102,"interactionType":103,"userInteractionCount":34},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"Why does state funding for higher education fluctuate over time?","Question",{"text":112,"@type":113},"State funding has long tracked broader economic cycles, expanding in growth periods and contracting during downturns. State fiscal conditions and political priorities further amplify the volatility.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How do tuition and fees relate to reductions in state investment?",{"text":117,"@type":113},"When public investment declines, students and families often absorb the gap through higher tuition and fees. States may also cap tuition increases, adding additional pressure on institutional finances.",{"name":119,"@type":110,"acceptedAnswer":120},"What new revenue pressure does the report emphasize?",{"text":121,"@type":113},"The brief highlights mounting financial pressure from proposed caps on indirect costs for funded research, a revenue stream that supports research infrastructure for higher education institutions.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},586183,1792065651,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":34,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":34,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},1099523885336,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","NEA RESEARCH BRIEF  \nState Funding Update: The Fiscal and Political Crossroads Facing Public Higher Education  \nState funding for higher education in the United States has long followed the broader economic cycle—expanding during periods of growth and contracting during downturns. State fiscal health and political priorities have further amplified this financial volatility, resulting in uneven and unpredictable funding landscapes across the country. These fluctuations pose persistent challenges to public colleges and universities, which depend heavily on state appropriations to support faculty and staff salaries, provide student aid, and maintain essential services.  \nStates often see higher education as having an alternate funding mechanism—tuition—unlike most state budget items. So, when public investment falls, students and their families frequently absorb the financial burden in the form of higher tuition and fees. This perceived substitute makes higher education particularly vulnerable to cuts. However, along with funding cuts, states also often cap increases in tuition, putting even greater pressure on institution finances.  \nState funding became especially volatile during the Great Recession in 2008 and the COVID-19 pandemic, both of which caused states to make significant cuts in public investment. Some states were unable to fully recover. As the country emerges from the pandemic, we are experiencing a new period of fiscal and political uncertainty marked by inflation, shifting budget priorities, and Trump administration policies. The current administration has intensified its attacks on higher education, including efforts to dismantle diversity, equity, inclusion, and accessibility (DEIA) initiatives; restrict free speech; freeze or halt publicly funded research; significantly raise the tax on endowments; and limit indirect cost reimbursement for research activities. At a time when strong state appropriations could make a critical difference, many colleges and universities instead are facing tightened budgets and mounting political scrutiny, with continuous threats to education equity, academic freedom, and institutional stability.  \nThis report examines how state funding for higher education has fluctuated across economic cycles, drawing on national trends, historical state-level data, and contextualized examples from individual states. By integrating findings from NEA’s prior reports in other research areas, we assessed the structural vulnerabilities that make public colleges and universities particularly susceptible to fiscal downturns and shifting political priorities. In addition, we highlight in this brief the mounting  \nNEA RESEARCH BRIEF | 1  \nfinancial pressures facing these institutions due to the proposed caps on indirect costs for funded research—an often-overlooked but critical revenue stream that supports the infrastructure necessary for higher education institutions to conduct research.  \nHISTORICAL TRENDSi  \nThe Great Recession and Recovery. State funding for higher education was at a historic high in the 2008 fiscal year (FY08), just before the Great Recession. During the recession and into the recovery years, funding levels dipped significantly but then began to recover in the years just before the pandemic, and by FY20, higher education appropriations were at higher levels than FY08 funding in 40 states. However, adjusting for inflation and measured on a per-student basis, only 18 states’funding recovered to pre-recessionary levels; 32 states had not completely recovered, although many were on the upswing.  \nThe COVID-19 Pandemic. The economic effects of the pandemic began in mid-FY20, putting states and institutions into an economic tailspin. As a result, most states slashed their FY21 higher education budgets. Inflation-adjusted higher education appropriations declined in 37 states between FY20 and FY21, and among the other 13 states, increases were small. At the same time, enrollment declined, re","cbCaiqyR4aoVc64g","https://ap.wps.com/l/cbCaiqyR4aoVc64g","pdf",622368,"English","# Historical Trends\n## The Great Recession and Recovery\n## The COVID-19 Pandemic\n## FY23\n## FY24\n## FY25","[{\"question\":\"Why does state funding for higher education fluctuate over time?\",\"answer\":\"State funding has long tracked broader economic cycles, expanding in growth periods and contracting during downturns. State fiscal conditions and political priorities further amplify the volatility.\"},{\"question\":\"How do tuition and fees relate to reductions in state investment?\",\"answer\":\"When public investment declines, students and families often absorb the gap through higher tuition and fees. States may also cap tuition increases, adding additional pressure on institutional finances.\"},{\"question\":\"What new revenue pressure does the report emphasize?\",\"answer\":\"The brief highlights mounting financial pressure from proposed caps on indirect costs for funded research, a revenue stream that supports research infrastructure for higher education institutions.\"}]","NEA Research Brief - State Funding Update - The Fiscal and Political Crossroads Facing Public Higher Education | PDF",1792057177,18]