Differences Across States in Higher Education Finance Policy

In the United States, public higher education finance policy is primarily decided at the state level, and policies can vary dramatically across state lines. Data was used from 1989–1990 and 2008–2009 to describe these differences and how they have changed over time. Numerous aspects of each state's higher education system were examined—average four-year tuition and fees, average two-year tuition and fees, the share of each state's public enrollment that is located at two-year institutions, total state grant aid, total need-based state grant aid, and total non-need-based state grant aid. The findings reveal substantial variation across states, but these differences across states fell over time for most measures. The relationships between variables also changed. For example, the positive relationship between a state's tuition level and its financial aid offerings declined during the period. Our analyses produce insight into national trends in tuition and grant aid by examining the contribution of individual states to these trends. National figures have been heavily influenced by the decisions of a few large states with atypical finance policies and by the shifting of population away from high-tuition northern industrial states and towards low-tuition Sun Belt states.