State Disinvestment in Higher Education Is a Myth

You can't go long reading about higher education before coming across a lament about cuts in state funding for higher education, often called state disinvestment. There's just one problem--as documented in a new Cato briefing paper, states have been increasing funding over the past few decades, not cutting it. The figure below shows inflation-adjusted state funding per student over the last 43 years (the black line) as well as the long-term trend as given by the regression line (the blue line). The long-term trend line shows that state funding increases by $48 (+-$18) per student per year. This increase in funding over time means that state disinvestment is a myth. But while state disinvestment at the national level is a myth, there is some variation by state. The figure below shows the estimate of the long-term trend by state. There is statistically significant evidence that 24 states have increased funding over time (green), that 6 have decreased funding over time (red), and that there is no convincing upward or downward trend in 20 states (grey). So while there are six states for which state disinvestment is real, for each one of those, there are four states that have increased funding and more than three states that have seen essentially no change in funding over time.