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ERIC Number: ED594133
Record Type: Non-Journal
Publication Date: 2019-Feb
Pages: 26
Abstractor: ERIC
Consequences of State Disinvestment in Public Higher Education: Lessons for the New England States. Research Report 19-1
Zhao, Bo
Federal Reserve Bank of Boston
Public higher education produces many benefits that are vital to the New England economy, but it is increasingly at risk following years of state budget cuts. In 2017 in New England, real per-student state funding for higher education was lower than it was in 2008, with a double-digit decline in each of the region's states except Maine. States have reduced funding for higher education to address short-term budget gaps caused by recessions and long-term budget gaps attributed to the growing costs of Medicaid and public pensions. Research in this report shows that reductions in state appropriations have resulted in higher tuition and fees, greater student loan debt, decreased resources for education and research, and fewer graduates and approved patent applications from public colleges and universities. If the New England states wish to better meet the educational needs of the region's students and the workforce requirements of employers, policymakers will need to restore some of the reduced appropriations and safeguard public higher education against future budget cuts. This report recommends that policymakers provide robust financial support for public higher education, particularly community colleges, which are the most vulnerable to the negative consequences of state disinvestment. To reduce the chances of having to make state funding cuts, or to at least mitigate future cuts, policymakers should consider both short-term and long-term solutions such as strengthening state budget stabilization funds and addressing long-term state budget gaps. If states need to raise more revenues to safeguard public colleges and universities, the social, economic, and fiscal benefits associated with public higher education likely will justify the additional costs to taxpayers. [The New England Public Policy Center of the Federal Reserve Bank of Boston promotes better public policy in New England by conducting and disseminating objective, high-quality research and analysis of strategically identified regional economic and policy issues.]
Federal Reserve Bank of Boston. P.O. Box 55882, Boston, MA 02205. Tel: 617-973-3000; Tel: 617-973-3397; e-mail:; Web site:
Publication Type: Reports - Research
Education Level: Higher Education; Postsecondary Education; Two Year Colleges
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Federal Reserve Bank of Boston
Identifiers - Location: New Hampshire; Rhode Island; Vermont; Connecticut; Massachusetts; Maine
Grant or Contract Numbers: N/A