A recent peer-reviewed study published in the Journal of Education Finance has delved into the intricate relationship between state appropriations and graduation rates, particularly focusing on underrepresented students in higher education.

The research indicates that an increase in state funding can significantly enhance graduation outcomes, with a notable positive impact on Black and Latinx students.

Positive Impact of Increased State Appropriations

The study reveals that a 10% rise in state appropriations for public four-year colleges led to marked improvements in graduation rates. Overall, there was a 0.59 percentage point increase in six-year graduation rates across institutions. However, the impact was more pronounced for Black and Latinx students. Specifically, a 10% increase in state appropriations resulted in a 0.99 percentage point increase in graduation rates for Black students and a 0.84 percentage point increase for Latinx students.

These findings underscore the critical role of state funding in supporting the success of underrepresented student populations. By providing additional financial resources to institutions, states can help mitigate barriers to graduation and facilitate greater academic achievement among minority students.

Challenges and Implications

Despite the positive correlation between state appropriations and graduation rates, the study also highlights ongoing challenges facing public higher education. Over the past decade, state appropriations as a proportion of total institutional revenue have experienced a significant decline, while reliance on tuition and fees has increased.

Between the 2007-08 and 2017-18 academic years, state appropriations decreased from 23.8% to 16.6% of total revenue, while the share of revenue from tuition and fees rose from 17.9% to 20.5%. This trend reflects a broader shift towards greater financial pressure on students and families, as well as heightened fiscal constraints for colleges and universities.

The decrease in state funding poses a significant threat to efforts aimed at improving graduation rates, particularly for underrepresented students. Without adequate financial support, institutions may struggle to implement initiatives and programs targeted at enhancing student success and retention.

Recommendations for Policy and Practice

In light of these findings, the researchers advocate for increased state investment in public higher education to foster greater equity and opportunity. They argue that bolstering state appropriations is essential for addressing persistent disparities in graduation rates and advancing broader college attainment goals.

Moreover, the study emphasizes the importance of targeted funding strategies that prioritize institutions serving underrepresented student populations. Historically Black colleges and universities (HBCUs), for instance, demonstrated particularly positive outcomes in response to increased state appropriations, with higher graduation rate increases among Black students.

Overall, the research underscores the critical role of state funding in shaping the success and accessibility of higher education. By prioritizing investments in public colleges and universities, policymakers can promote greater equity, diversity, and inclusion within the higher education landscape, ensuring that all students, regardless of background, have the necessary support to succeed.