Texas’ Investment In Higher Education Lags Behind Student Needs And Workforce Demands

Just as postsecondary education has expanded opportunities for good jobs and entry into the middle class, college costs are rising beyond the reach of many Americans. State policy decisions are largely responsible for this major cost shift onto students and families. Public investment in higher education has decreased considerably over the past twenty years, and financial aid programs fail to reach all students with financial need. Students and their families must now pay—or borrow—much more than they or Texas can afford.

A new report by the national policy center Demos (The Great Cost Shift: How Higher Education Cuts Undermine the Future Middle Class), examines how state disinvestment in public higher education over the past two decades has shifted costs to students and their families. The report outlines how such disinvestment cuts against rapidly rising enrollments, and demographic shifts that promise more economically, racially, and ethnically diverse student bodies. This fact sheet, produced jointly with the Center for Public Policy Priorities, highlights Texas’ funding for higher education trends over the last 20 years.


Texas funding for higher education has not kept pace with rapidly rising student enrollments. Coupled with the deregulation of tuition at public four-year colleges in 2003, this trend has led to dramatic increases in tuition and fees. Texas is no longer an affordable-tuition state, especially at four-year public institutions. Residents must pay considerably more for an education today than they did twenty years ago.

The rising cost of higher education is forcing many students into debt, part-time enrollment, and long work hours, depressing graduation rates. And some Texans forgo higher education altogether because of the high cost, thereby missing out on career opportunities that require a postsecondary degree or certificate.

If Texas does not improve its postsecondary degree and certificate completion rate, the state will be unable to meet future labor market demands. While 56 percent of all jobs in Texas will require postsecondary education by 2018, the state is on track to produce far fewer degree holders. By 2025, only 38 percent of Texans are projected to hold a two-year degree or higher, leaving the state with a significant skills gap. Fortunately, Texas can reverse this pattern by taking advantage of our financial and natural resources to invest in the current and future generations of Texans aspiring for the American Dream through postsecondary education and training.


Texas funding per full-time equivalent student has stagnated at 1990 levels. The 2012-13 higher education cuts will further lower per-student funding levels in upcoming years. (see below)

Texas higher education funding per FTE student has dropped 21.4 percent since its peak in 2001-02 ($7,452 per FTE student in 2009-2010, $9,487 in 2001-2002).

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