State funding for public higher education institutions increased by 4.5% in FY2021, according to the recent State Higher Education Finance report. The growth comes despite a 3% enrollment decrease on full-time equivalent students and decline in net tuition revenue due to the pandemic.

As summarized by Forbes:

The increases are generally due to three factors:

1) Greater state commitments to higher education funding

2) a pronounced decline in FTE enrollment, and

3) significant federal stimulus funding.

State appropriations were buoyed by several pulses of federal stimulus and relief funding that states were given during the pandemic. Two-year public institutions received $214 per FTE in federal stimulus for public operations in 2021, and four-year institutions received $288 per FTE.

All but five states (Alabama, Nevada, New York, Oklahoma, and West Virginia) allocated some of their federal stimulus funds directly to higher education. Five states (Colorado, Minnesota, New Hampshire, Vermont, and Wyoming) and Washington, D.C., relied on federal stimulus funding for more than 20% of higher education support.

Without these federal funds, the report found that education appropriations per FTE student would have increased just 2.0% from 2020 to 2021.