May 22, 2003
Urban Institute

State governments have historically taken the lead in financing higher education. Over the past 20 years, however, state support for higher education has gradually waned. One result has been the widely publicized rise in tuition at public institutions. Another result is a widening gap in expenditures per student and average faculty salaries at public and private institutions. This paper examines interactions between state appropriations for higher education, other state budget items (especially Medicaid), and the business cycle on higher education subsidies.

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