Getting What We Pay For: State Community College Funding Strategies that Benefit Low-Income, Lower-Skilled Students
December 09, 2010
"Community colleges across the nation appear to be facing a "perfect storm" during which surging enrollments, tepid state funding, and strong accountability forces are colliding to severely threaten access to and completion of postsecondary education and credentials by lower-skilled and low-income students.[i] In the last few years, record enrollments have resulted in classes filling up faster, colleges closing courses sooner, and institutions capping enrollments...
...One approach to survive this perfect storm is to consider how states can fund community colleges differently to improve access and outcomes, further state economic goals, and ensure lower-skilled and low-income students are served effectively. State funding is a powerful tool to influence institutional priorities and practices. As the authors of a recent report from the Delta Project on Postsecondary Education Costs, Productivity, and Accountability so simply and elegantly put it: "revenues dictate functionality in higher education."[ii]
This policy brief describes strategies state policymakers can use to realign community college financing-including tuition policies-to improve postsecondary access and success for lower-skilled and low-income students and to achieve stronger state economic health."
What follows are visualizations of some of the datasets provided in this policy brief, "Getting What We Pay For: State Community College Funding Strategies that Benefit Low-Income, Lower-Skilled Students."
The charts available include:
- Appendix A: State-by-State Breakdown of Community College Revenue Sources (2008)
- Appendix B: State Appropriations to Community Colleges as Percentage of Total State Expenditures (FY 2007)
- Appendix D: State Spending By Function as a Percent of Total State Expenditures (FY 2008)
- Appendix E: State Use of Formula Funding for Community Colleges
All public higher education institutions-including two- and four-year institutions-receive revenue primarily from state and local governments, student tuition, the federal government, philanthropic donors, and auxiliary enterprises such as contract training.
The exact mix of community college revenue sources varies significantly by state. On average, community colleges across the country receive 48 percent of revenues from state and local governments, 21 percent from net tuition (the amount of tuition revenue after factoring in institutional aid and tuition waivers), 14 percent from the federal government, 7 percent from state and local grants and contracts, and 9 percent from other sources.
Source: Author's calculations using data from the Integrated Postsecondary Education Data System (IPEDS) of the National Center for Education Statistics at the U.S. Department of Education. The data were provided by the National Center for Higher Education Management Systems (NCHEMS) in August 2010.
Although state funding can be a significant portion of a community college's revenue stream, funding for community colleges is a small percentage of total state expenditures. On average, states appropriated only 1.08 percent of their total expenditures to community colleges in FY2008.
Source: Author's calculations using state community college appropriations data from the U.S. Department of Education's Integrated Postsecondary Education Data System (IPEDS) Finance Survey 2007-2008. The data were provided by National Center for Higher Education Management Systems (NCHEMS) in August 2010. Total state expenditure data is from the National Association of State Budget Officers (NASBO) FY 2008 State Expenditure Report.
In the overall context of a state budget, higher education spending-including for community colleges and four-year colleges and universities-is a relatively small slice, at about 10 percent. There are many other categories of spending competing for policymakers' attention, including elementary and secondary education and Medicaid. (Figure I in the report provides an aggregate overview.)
Source: National Association of State Budget Officers (NASBO) State Expenditure Report; Fiscal Year 2008 (Fall 2009).
States fund community colleges using either formula (at least 32 states) or straight non-formula (at least 15 states) allocations.[iii] Although the majority of states use a formula to determine community college allocations, few have fully funded their formula allocations in recent years. In a 2007 state community college director survey, AACC found that just 41 percent of states had fully funded their formula allocations.
Source: American Association of Community Colleges, Funding Issues in U.S. Community Colleges (2008).
[i] Thank you to Michael Hansen, President of the Michigan Community College Association, for permission to use his compelling "perfect storm" metaphor.
[ii] Donna M. Desrochers et al., Trends in College Spending 1998-2008: Where Does the Money Come From? Where Does It Go? What Does It Buy?, The Delta Project on Postsecondary Education Costs, Productivity, and Accountability, 2010.
[iii] Stephen G. Katsinas et al., Funding Issues in U.S. Community Colleges: Findings from a 2007 Survey of the National State Directors of Community Colleges, American Association of Community Colleges, 2008.