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Higher Ed Funding

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Funding for Colleges and Universities: Overcoming the Lack in State Appropriations
Emilee Sides
Arkansas State University

Abstract

As higher education enrollment increases, the ability for states to provide sufficient funding to their institutions decreases. This paper will examine a variety of practices that colleges and universities can use to offset the shortage of appropriations. These courses of action include tuition increases, attempting to increase enrollment through out-of-district campaigning, finding additional charitable donations, partnering with private companies, and looking at unconventional bond issuing. Each method of fund-raising has its own advantages and disadvantages. All of these methods, along with their benefits and drawbacks will be discussed.

According to the State Higher Education Executive Officers Association (2012), enrollment for colleges and universities has experienced an overall growth of 16.9 percent since 2006 and an overall growth of about 33 percent in the last ten years (p 19). While this should be good news for higher education, unfortunately, state appropriations have not matched this exciting growth in enrollment. According to the report, appropriations per FTE dropped from an all-time high in 2001 of $8,316 to $6,290 in 2011 – lower than any year since 1980. This data indicates that while school must serve a growing number of students, they have fewer resources with which to serve each individual. Obviously the easiest solution is to look for ways to save money – lower spending and increase efficiency. However, cutting costs can only get an agency so far. In order to truly make up for such a deficiency, agencies must look for ways to raise revenue. Tobenkin (2013) lists several initiatives that schools can undergo to raise revenue: reevaluating tuition, pursuing nonresident students, increasing

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