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Brief Paper: Higher Education Funding
Brief Paper: Higher Education Funding
Tishita Washington
Liberty University
EDU-C 663
March 10, 2024
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Brief Paper: Higher Education Funding
Abstract
The landscape of higher education funding is complex and riddled with questions about
the size of public investment, efficiency within institutions, and the most sustainable revenue
sources. Over the years, the context and structure have changed, especially after the COVID-19
error. "Declines in state funding of higher education will likely worsen due to the economic
ramifications of COVID-19." (Ward,. Et. al 2020) The impact of each area on postsecondary
institutions is analyzed, considering factors such as accessibility, resource allocation, and
program offerings. Furthermore, the social and political context surrounding funding decisions
explores and highlights the influence of economic conditions, political ideologies, and public
perception. Finally, the paper incorporates a biblical perspective, emphasizing wise stewardship,
shared responsibility, and ensuring access to knowledge. This multi-faceted approach provides a
comprehensive understanding of the challenges and opportunities of funding higher education.8
Three Detrimental Considerations in Funding Higher Education
The size of funding allocated to higher education institutions significantly impacts their
ability to provide quality education. Research and historical data have shown that the state's
contributions have declined due to the Recession and COVID-19, while federal contributions to
higher education have increased.8
"States and the federal government have long provided substantial funding for higher
education, but changes in recent years have resulted in their contributions being more
equal than at any time in at least the previous two decades. Historically, states have
provided a far greater amount of assistance to postsecondary institutions and students, 65
percent more than the federal government on average from 1987 to 2012. But this
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Brief Paper: Higher Education Funding
difference narrowed dramatically in recent years, particularly since the Great
Recession…(Oliff,2015.)
When evaluating the size of funding for any institution of higher learning, we have to
explore the components that impact how and how much funding is distributed. The first
component considered is enrollment growth; institutions must secure adequate resources to
maintain educational standards as student populations increase. To increase college enrollment,
campus leaders must be smart, flexible, and innovative. … "To positively increase enrollment,
colleges should be willing to make changes in multiple areas." (Carballo, 2021) Balancing
enrollment growth with funding availability is essential. Adequate funding allows for smaller
class sizes, better facilities, and more faculty support, all contributing to a more prosperous
learning environment. However, as stated in the PBS News Hour covering the documentary
"Ivory Tower," concerns arise about rising student debt and tuition and the potential for
inefficient use of funds within institutions. (PBS NewsHour, 2014, 1:01:00)
While the size of the school may dictate funding, ensuring equitable funding distribution
across institutions and student demographics is another crucial component. Historically,
marginalized groups should receive fair access to educational opportunities.8
"The U.S. continues to struggle to broaden access and success in higher education to the
groups who have been historically underrepresented and excluded from higher education,
particularly students who identify as American Indian, Alaska Native, Black, Latinx,
Native Hawaiian, and Pacific Islander, or come from low-income households."
(Laderman et.al 2023)
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Brief Paper: Higher Education Funding
Institutions serving under-resourced communities often require more funding to bridge
the student preparation and support services gap. Research by the Center for American Progress
indicates that low-income students attending such institutions experience higher graduation rates
with increased financial support. (Leinweber, S., & Burd, S.2017) Furthermore, investing in
initiatives that address equity gaps, such as financial aid for low-income students or mentorship
programs for first-generation college students, can contribute to a more diverse and equitable
higher education landscape. Therefore, prioritizing equity in funding decisions is essential for
fostering a more inclusive and accessible higher education system.8
Efficiency and Productivity: Being a Good Steward
The efficiency and productivity of higher education institutions are crucial considerations
for public funding, and productivity plays a pivotal role in higher education funding. Graduation
rates, faculty workload, and administrative costs are scrutinized. For any institution of higher
education to thrive, there must be checks and balances. Institutions that demonstrate strong
performance and efficient resource allocation are more likely to attract public funding.
Conversely, those with high administrative costs or low graduation rates may face funding cuts.
This incentivizes institutions to focus on measurable outcomes and optimize resource utilization.
Economies of scale in economics suggest that larger facilities can achieve8lower unit
costs8due to specialization of inputs, improved management, and other technical
advantages. The assumption is that as an institution grows, costs decrease…. The
findings from this study indicate that8curricula and complexity play a crucial role in
per-student costs. It's not merely about size; the intricacies of an institution matter
significantly. Whether an institution is large or small, complex or single purpose, the
need for expenditures often exceeds available resources. This challenge has led to various
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Brief Paper: Higher Education Funding
funding allocation methods, including formula funding based on assumptions and rules
that vary by state. (McLaughlin et al. 1980)
In essence, efficient and productive funding use involves strategic budget allocation, innovative
teaching methods, and effective administrative practices. Balancing financial constraints with
educational excellence remains an ongoing endeavor for institutions worldwide.
Revenue Sources: Diversifying and Stabilizing the Funding Platform
While public funding is significant, it is only one thread in a finely woven infrastructure
of funding higher education. Institutions also rely on a multitude of funding pools, such as tuition
fees, grants, endowments, and private donations. A diversified revenue stream provides stability
and minimizes dependency on a sole contributor. Economic conditions, political priorities, and
competing demands for public funds often influence government appropriations. Tuition fees
contribute to institutional revenue but can also affect access for low-income students.
Diversification of revenue sources, such as through partnerships with industries and
philanthropic efforts, can also enhance financial stability. These resources allow institutions to
cater to a broader range of students by offering scholarships and financial aid. However, an over-
reliance on tuition fees can create affordability issues, potentially excluding deserving students
from low-income backgrounds.
Higher education funding in the U.S. is complex and distributed through multiple funding
sources that change over time with important differences across states, public and private
institutions, and institution types. This chapter provides an overview of the major sources
of funding for U.S. higher education and how they have ebbed and flowed over time. We
investigate the potential ramifications of changes in state funding, which has long been
the primary source of revenue for public institutions. (Laderman et.al 2023).
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Brief Paper: Higher Education Funding
Ultimately, the question of revenue sources for public funding boils down to diversifying
the financing and social responsibility. A diversified approach to revenue sources is crucial for
the long-term sustainability of public funding for higher education. By combining public
investment with tuition fees, grants, endowments, and private donations, institutions can create a
robust financial foundation that can withstand economic fluctuations and changing political
priorities. Investing in higher education is an investment in the future, and by doing so, it ensures
that the benefits of higher education are accessible to all, regardless of socioeconomic
background. This shared responsibility creates a virtuous cycle where a well-educated populace
contributes to the society that empowers them.
Social and Political Context – The Knot
The social and political context significantly influences funding decisions. Economic
conditions, political ideologies, and public perception of higher education all play a role. In times
of economic hardship, funding may be cut as governments prioritize other concerns. Political
leaders may favor specific institutions or programs depending on their ideology. In turn, shifts in
the social and political landscape can dramatically impact institutional resources. Institutions
may need to adapt their programs, tuition fees, or fundraising strategies based on the prevailing
climate. "States should strategically marshal local, state, and federal higher education resources
to ensure that the students and institutions with the greatest needs receive the most support."
(Ward et al., 2020). When it is all said and done, there is a delicate balance act, and revenue
sources and the social-political context intersect to shape higher education funding. Balancing
affordability, quality, and accessibility remains a critical challenge for postsecondary institutions.
As we approach a new generation of higher education in a post-COVID-19 society, societal and
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Brief Paper: Higher Education Funding
political constraints will undoubtedly impact the nuances of higher education and funding as they
are intertwined in a complex web of instability and uncertainty.
Biblical Perspective: Thus Says the Lord
In watching the assigned videos, reading the assigned text, and researching each
impactful subject matter, I was reminded that God has given us a guideline so we never have to
guess what we should do. For every question asked in this assignment, God had an answer.
When placing a biblical worldview into this discussion, my key takeaway involved using
wisdom in resource allocation, responsible stewardship, and shared responsibility. For the last
four weeks, these have been the key takeaways in one aspect or another. The scripture that
summed this up for me was the Parable of the Faithful Steward.8
Luke 12:42-48 states that The Lord said, "Who then is the faithful and wise steward [of
the estate], whom his master will put in charge over his household, to give8his
servants8their portion of food at the proper time?843,Blessed (happy, prosperous, to be
admired) is that servant whom his master finds so doing when he arrives.844,I assure
you8and8most solemnly say to you, he will put him in charge of all his
possessions….8848,but the one who did not know it and did things worthy of a beating,
will receive only a few [lashes]. From everyone to whom much has been given, much
will be required; and to whom they entrusted much, of him they will ask all the more."
(AMP)
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Brief Paper: Higher Education Funding
God reminds us that we should remain grounded in Godly principles because the more
we do, the more he will place upon us. He trusts us with small things, and if we govern ourselves
accordingly and follow his direction, he will bless us with significant things. As the saying goes,
"Heavy is the head that wears the crown." Once God anoints you and appoints you, there is no
compromise.8
Conclusion
In summation, funding higher education requires a delicate balance. From its inception,
seeking and funding higher education has always been challenging. While we would want things
black and white, separate like church and state, balancing the need for adequate funding with
concerns about efficiency and affordability is a constant challenge. In addition, adequate funding
is essential for maintaining educational quality and accessibility. However, funding decisions
must also align with ethical principles and societal values, including equitable distribution and
care for the marginalized. When all of those aspects do not align to create a better society, we fail
ourselves, our society, and most importantly, our God.8
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References
Ward, J. D., Pisacreta, E. D., Weintraut, B., & Kurzweil, M. (2020, December 10).+An
Overview of
State Higher Education Funding Approaches: Lessons and Recommendations.
https://doi.org/10.18665/sr.314511
Carballo, S. (2021, September 6). 7 Smart Ways to Increase College Enrollment.
Element451.
Retrieved March 9, 2024, from https://element451.com/blog/7-smart-ways-to-
increase-
college-enrollment
Oliff, P. (2015, June 11). Federal and State Funding of Higher Education A changing
landscape. Pew.
Retrieved March 9, 2024, from https://www.pewtrusts.org/en/research-and-
analysis/issue-
briefs/2015/06/federal-and-state-funding-of-higher-education
[PBSNewsHour]. (2014, June 23). Documentary explores why higher education has a
higher price
[Video]. Youtube. https://www.youtube.com/watch?v=GwXDnhjjNJE
Leinweber, S., & Burd, S. (2017, January 12). Why investing in low-income students
is good for the
economy. Center for American Progress. Retrieved March 9, 2024,from
+https://www.americanprogress.org/topic/poverty/
Laderman, S., Cummings, K., Lee, J.C., Tandberg, D., Weeden, D. (2023). Higher
Education Finance
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Brief Paper: Higher Education Funding
in the United States: Sources of Funding and Impacts of State Investments.
In: Jungblut, J.,
Maltais, M., Ness, E.C., Rexe, D. (eds) Comparative Higher Education Politics .
Higher
Education Dynamics, vol 60. Springer, Cham. https://doi.org/10.1007/978-3-
031-25867-1_7
Bible Gateway/ Amplified Bible. Biblica,
2011https://www.biblegateway.com/passage/?search=Luke%2012%3A42-
48&version=AMP Accessed 10 March. 2024.
