State Higher Education Funding During COVID-19: Lessons From Prior Recessions and Implications for Equity

Abstract

States provide substantial support for higher education through appropriations to public colleges and universities that can be used to maintain relatively low tuition levels and funds for financial aid. Higher education often receives disproportionate cuts during recessionary periods, and it faces potentially unprecedented reductions in coming years amid a pandemic that has left some states with revenue shortfalls. How states approach higher education cuts has the potential to exacerbate existing inequities among racially minoritized and low-income students and historically underfunded institution types. In this study, we document trends in higher education funding over time and use latent profile analysis to identify distinct approaches states have taken to higher education funding. We then examine the trajectories of higher education funding within each approach over time, particularly during prior recessions. We conclude by discussing the implications of each approach for equity, particularly in light of states’ early responses to the current economic downturn.