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What happened to state funding of state schools?

For generations, state governments have been the biggest funding source for public colleges and universities.

Not anymore. It probably won't come as a surprise to college students and their parents that families are now shouldering the biggest financial brunt at state universities, according to a new study from the U.S. Goverment Accountability Office.

During the decade ending in 2012, revenue from state sources shriveled from 32 percent of the total to just 23 percent even as enrollment grew by 20 percent. In contrast, revenue from tuition during that same period increased from 17 percent to 25 percent, making families the No. 1 revenue source for keeping on the lights. Tuition overtook state funding in 2012.

While tuition revenue jumped significantly during this period, revenue from federal and local governments, as well as other sources remains relatively stable.

The tuition at both four- and two-year institutions increased by about 54 percent. During the decade examined, median tuition for nonresidents at state schools rose by 31 percent.

The median tuition at public, four-year schools was $7,350 for the 2011-2012 school year, while students attending community colleges faced a median tuition of $3,240.

The families facing the biggest financial burden

While states were pushing more of the cost onto families, students with the greatest financial need were receiving a smaller piece of the pie. During the 2003-2004 school year, 71 percent of the grant aid was need-based, but that percentage slipped to 64 percent by 2011-2012.

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Higher-ed experts whom the GAO interviewed suggested that the growth in merit awards at state universities could be related to their political popularity, especially among state legislators. It's a reality that merit awards based on test scores and GPAs are more likely to go to affluent students, whose parents are more likely to be voters.

The states that experienced the largest decrease in need-based aid during the period examined were Wyoming, Utah and New Hampshire. Among the states that boosted need-based aid the most were Massachusetts, Nevada and Michigan.

While the report didn't mention it, the race for prestige, as measured by U.S. News & World Report's college rankings, has surely influenced the decision by many state universities to chase high-achieving students by offering merit scholarships. More accomplished students can help campuses boost their college rankings, leading them to become more popular with affluent applicants.

As prices continue to climb, families are now coping with college costs that represent an ever larger percentage of their budgets. Among all students, the ratio of net tuition to annual income has increased about one-and-a-half times from the 2003-2011 school year to the 2011-2012 year. The ratio was greatest for the poorest students. The ratio of net tuition to annual income was about four times higher for the most impoverished students compared to the richest.

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