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With an increasing federal share in the funding of higher education comes motivation and responsibility for monitoring quality and outcomes, raising questions about how federal and state governments should work together. This brief suggests strategies for meeting national goals for postsecondary education while preserving and enhancing states’ roles.
Each state has its own system of public higher education. In many states, local governments also provide funds, particularly for community colleges. At the same time, the federal government provides a growing share of the funding for these institutions, and with the funding come motivation and responsibility for monitoring quality and outcomes. This trend raises difficult questions about how federal and state governments should work together to ensure the efficient and equitable use of public funds to provide high-quality widespread postsecondary educational opportunity.
- State funding for higher education ebbs and flows with economic cycles and has not kept up with increasing enrollments.
- College prices are rising throughout the nation, making access to higher education difficult for low- and moderate-income students.
- Too many students are enrolling in college but leaving without earning a credential, frequently borrowing to fund this effort.
- States vary considerably in funding levels, institutional structures, prices, and student aid, generating very different educational opportunities for residents of different states.
- There are no clear routes to improving efficiency and productivity in higher education, enabling us to offer more high-quality degrees at lower cost.
- Even if states operate their systems efficiently, the rigid lines between states may lead to significant inefficiencies from a national perspective.
- State and federal policies are not well coordinated; state policies sometimes reinforce national goals but sometimes work at cross purposes.
Federal financial aid has grown rapidly in recent years, while per student state appropriations for public colleges and universities have declined. There are good arguments for the federal government to provide states stronger incentives to strengthen and better target their funding and to diminish the gaps in educational opportunities across states. There are also good reasons the federal government should not take primary responsibility for colleges and universities or impose extensive new regulations. But the federal government should ensure that its funding achieves its goals.