Oregon Lags Most States in Public Higher Education Funding, Report Finds

The Oregon Legislature continues to spend far less on higher education than other states, according to a new report, leading to some of the highest costs of attendance among universities in the West.

Oregon is ranked 44th in the nation for public funding of higher education and 37th in the nation for per-pupil funding, according to the latest annual State Higher Education Finance report from the Colorado-based State Higher Education Executive Officers Association. Oregon’s Higher Education Coordinating Commission is a member of the association.

The report compared state-by-state funding data from the 2022-23 fiscal year. While higher education investment in Oregon has increased in recent years, it has not been enough to make up for more than a decade of underfunding and of relying heavily on student tuition to cover rising costs, said Ben Cannon, executive director of the commission.

Cannon and university presidents have repeatedly asked the Legislature for more higher education dollars and a model of funding that balances state investment with tuition revenue.

“We are continuing to rely on students to balance our budgets,” Cannon said in testimony to a legislative ways and means subcommittee last year.

Unreliable revenue source

Enrollment declines across Oregon’s seven public universities and 17 community colleges over the last five to 10 years have been more than twice the national average, the report found, making tuition an unreliable source of funding.

“Over the next 10 years, or whatever portion of that 10 years I’m around for, I will hope to partner with the Legislature to restore the ‘public’ in our public system of higher education,” Cannon told the members of the subcommittee.

Per-pupil investment in Oregon’s public higher education system was more than $2,500 less than the national average last year, according to the higher education finance report. In Oregon during the 2022-23 school year, the state invested about $8,400 per full-time enrolled student each year. The national average that year was more than $11,000 per student. State investments in financial aid for middle and low-income students have increased in the last decade, but still fall behind national averages. Washington invests twice as much funding in scholarships for such students compared to Oregon.

“You have a situation in Oregon right now, where the vast majority of Oregon’s public university presidents are from outside of the state and we’re shocked,” said Eastern Oregon University President Kelly Ryan, who took over in 2023. “We’re shocked at what we found. And we’re also in wonderment about how we’re supposed to get our work done in such a drastically underfunded environment.”

Ryan had to cut 8.4% of the university’s budget for the 2023-24 school year – about $5 million.

“They (the Legislature) acknowledge we’re really important to building a tax base, building a workforce, but it’s hard for us to stay front and center,” she said.

Decade of disinvestment

Oregon’s higher education funding model has relied since the 2008 recession more heavily than many other states’ on raising tuition to cover rising operating costs, with funding since then cut in half.

“A whole lot of students took on a whole lot of debt in order to help the state keep its Corrections (Department), Human Services (Department) and K-12 systems afloat during the worst recession anyone had seen in their living memories,” Cannon told the Legislature.

Oregon’s public universities and colleges now derive 32% more of their revenue from tuition than most public higher education institutions in the country, the report found. Between 2013 and 2023, revenue growth from student tuition in Oregon increased 23%. The national average for tuition revenue growth was 1.5% during the same period.

Every one of Oregon’s seven public universities is increasing tuition in the upcoming school year, and has done so just about every year for the past 10 years. Average tuition at those schools today is about 26% higher than it was a decade ago. The rising costs of housing around Oregon’s universities have also driven up costs and affordability concerns, Cannon said.

“A state that invests relatively little is going to have institutions that are likely going to have relatively high tuition, and that’s absolutely what this report illustrates,” he told the Capital Chronicle.

by Alex Baumhardt, Oregon Capital Chronicle

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