Education, Higher Ed, NC Budget and Tax Center

North Carolina’s cuts to higher education are shortchanging future generations

North Carolina’s inadequate public investment in higher education over the last decade has contributed to rising tuition prices, often leaving students with little choice but to take on more debt or give up on their dreams of going to college. The problem is especially serious for Black, Latinx, and low-income students.

North Carolina is one of 45 states that spent less per student in the 2018 school year than in 2008 – even as the economy and state budgets have returned to pre-recession levels, according to Unkept Promises: State Cuts to Higher Education Threaten Access and Equity, a new report from the Center on Budget and Policy Priorities (CBPP).

2008 – 2018 Cuts to Higher Education Funding (adjusted for inflation):

  • North Carolina Average: 18.6 percent per student or $2,357 per student
  • S. Average: 16 percent per student or $1,502 per student

Cuts to higher education have helped drive up the cost of attending public colleges and universities. Between 2008 and 2018, the average tuition at public four-year institutions in North Carolina grew by 45% or $2,293– outpacing the national average growth of 36 percent.

Americans’ slow income growth has worsened the situation. While the average tuition bill increased by 36 percent between 2008 and 2018, median incomes grew by just over 2 percent. Nationally, the average tuition at a four-year public college accounted for 16.5 percent of median household income in 2017, up from 14 percent in 2008.

In North Carolina, the costs of a college education represents 14 percent of median household income for all North Carolina families, 19 percent of median household income for Black North Carolina families and 18 percent of median household income for Latinx North Carolina families.

Federal and state financial aid has failed to bridge the gap created by rising tuition and relatively stagnant incomes. As a result, the share of students graduating with debt has risen. Between the 2008 and 2015 school years, the share of students graduating with debt from a public four-year institution rose from 55 percent to 59 percent nationally. The average amount of debt also increased during this period. On average, bachelor’s degree recipients at four-year public schools saw their debt grow by 26 percent (from $21,226 to $27,000). In North Carolina, data from 2017 showed public university graduates hold $26,000 in debt ranking the state 14th. By contrast, the average amount of debt rose by only about one percent in the six years prior to the recession.

A large and growing share of future jobs will require college-educated workers. Sufficient public investment in higher education would help North Carolina develop the skilled and diverse workforce it needs to match the jobs of the future.

North Carolina has ignored these long-term economic demands, instead directing public resources to tax cuts for the rich and big companies.  Those tax cuts will continue in January 2019 with another round of rate reductions that will result in approximately $900 million fewer dollars for investment in higher education and many other proven investments that boost our economic growth.

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