Dive Brief:
- State funding for higher education in fiscal 2025 rose 4.3% year over year before inflation and by roughly a third from five years ago, according to the State Higher Education Executive Officers Association’s annual Grapevine report.
- The $129.1 billion in state funding for higher ed marked the fourth year of spending over the $100 billion mark.
- Excluding federal stimulus money, 41 states increased or held flat their higher ed funding, with seven of them raising it by 10% or more. Nine decreased their spending on the sector overall. The Grapevine data is based on initial allocations from October 2024 to January 2025 and could change.
Dive Insight:
Along with their own support, states put more federal dollars toward higher ed.
State allocations of federal funding rose 2.2% in fiscal 2025 compared to the prior year. The $637.9 million in added federal stimulus money brought total state support to $129.7 billion for the year, according to the Grapevine report.
Going back to 2020, states have allocated over $10 billion of federal stimulus funding to higher ed, money that helped buttress institutions against the financial turbulence of the COVID-19 pandemic.
Most — but not all — states increased their higher ed funding
Percent change in annual FY2025 state funding, excluding allocations of federal dollars.
Not all states increased their funding for colleges for fiscal 2025. Excluding allocations of federal money, Alabama, Arizona, Connecticut, Louisiana, Maryland, New Hampshire, Texas, Utah and Vermont decreased their funding. Accounting for state use of federal funds, the list is longer, with Michigan and Rhode Island also included.
Excluding federal funds, Nebraska had the largest leap in state support, a 32.2% increase, followed by Kansas with a 18.6% jump. On the other end, Alabama, Arizona and Vermont all decreased their support by over 7%.
California and Texas led the way in total higher ed funding, at $22.3 billion and $11.5 billion respectively.
The top 10 states for higher ed funding
State support in total dollars.
State funding includes tax appropriations, nontax support, nonappropriated support and returns from state-funded endowments, per SHEEO.
In a press release, SHEEO described the Grapevine report as “a first, tentative look at state higher education funding in the new fiscal year.” But the organization also added what it called “an important caveat” — that the data does not account for inflation.
Inflation in the sector has been higher than usual in recent years, though it is typically higher than consumer inflation. According to the Commonfund Institute’s latest Higher Education Price Index, costs for institutions rose 3.4% in fiscal 2024.
