August 30, 2014

Higher Education: Funding

Reven-U: Funding Higher Education

Here’s how Florida’s public universities plan to get the money they say they need to get better.

Mike Vogel | 6/27/2011
FIU President Mark Rosenberg
"We're not Chicken Little worried about the sky falling. We're moving ahead," says FIU President Mark Rosenberg, formerly chancellor of the State University System. [Photo: Roldan Torres-Moure]

In 2006-07, Florida's universities spent a total of $12,011 on each full-time student. More than three-quarters of that sum came from the state's general fund and other state money — the Bright Futures scholarship program, the Florida Lottery and various trust funds. Parents and students, for their part, paid 21% of the total bill in tuition.

Beginning in 2007, however, the Legislature began shifting more of the funding burden to students and their families. Lawmakers loosened the leash on what the schools can charge for tuition and since 2007 have cut base funding for the universities by $654 million.

By 2009-10, overall spending had fallen to around $11,000 per student, with an additional $500 from now-vanished federal stimulus money. More notable was the shift in where the money came from: Students and parents were paying 29% of the total in tuition. That percentage likely will be higher when figures for the most recent academic year are available.

This wrenching shift for schools and families will become more pronounced in years to come. Few expect the Legislature to restore the base level of state support to its previous share of the total. Meanwhile, the universities can increase tuition up to 15% each year until they hit the national average — which will take nine years, officials estimate — or until they start losing students to state (community) colleges, private and out-of-state schools.

In addition, since the burden-shifting hasn't produced any net increase in funding for the schools, Florida still ranks about where it did before in per-student spending — by various measures, among the bottom 10 states.

And so to get the money they say they need to get better, Florida's schools will be looking to drive revenue.

Graduation Rates
(for first-time-in-college undergrads graduating within six years at State University System schools)
? Enrollment 2000-06 2004-10
UF 50,116 7 9% 83.0%
FSU 40,764 67.2 72.4
New College 805 56.7* 68.3
UCF 56,338 56.5 62.7
USF 47,800 46.3 50.7
UWF 11,645 44.3 50.6
UNF 16,320 44.3 45.4
FGCU 12,038 32.4 44.8
FIU 44,010 45.4 43.5
FAU 28,390 35.3 40.2
FAMU 13,277 41.7 39.6
Systemwide 321,503 62.3 63.3
Note: New College was not a stand-alone institution in 2000. Its 56.7% rate is for 2001-07. Source: Florida Board of Governors

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Miami-based Florida International University is emblematic, at least among the state's younger, striving schools. State funding to FIU in 2006-07 was $218 million, with another $113 million coming from tuition. Last year, the shift shows $184 million from the state and $162 million from tuition.

To control its destiny, FIU expects to continue raising tuition and projects adding some 20,000 students over 10 years, which would make it bigger than Florida's largest university, the University of Central Florida, is now.

"It's forward-facing; it's aggressive," says FIU President Mark Rosenberg, formerly chancellor of the State University System.

Shrinking state support for public universities is a nationwide trend, as Medicaid and other entitlements along with rising public employee pension and healthcare costs force states to cut discretionary parts of their budgets, says higher education financial consultant John Curry, managing director of Huron Consulting Group in Boston.

A decade ago, public universities in America got 70% of their revenue from state appropriations, with the remainder coming from tuition. Today, they get 70% from tuition and the remainder from their states.

Nationally, universities have cut staff and slowed construction plans, but the outlook remains tough for all but the best-regarded private universities and public flagships as donors retreat, states cut spending and parents with falling incomes resist rising tuition, according to bond rating agency Moody's.

Public universities, meanwhile, face increasing competition from community colleges and for-profits that offer flexible schedules.

"Reliance on government appropriations has declined over the past five years as public universities have become increasingly market-driven, and we expect this trend to continue," Moody's reported in its 2011 outlook for higher education.

Against that backdrop, Florida has pluses. Like most southern and western states, it has superior growth demographics. To a degree, the Legislature has given its schools more leeway to pursue market-driven initiatives.

Tags: Education

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