Home > Policy > White Paper, Notice, Announcement > White Paper > FY2003 White Paper on Education, Culture, Sports, Science and Technology >Part1 Chapter4 Section2.3

State universities account for the majority of US university students, totaling 77 percent as of 2000. The main bearer of the current expenses for a state university is the state. However, one of the main characteristics is the wide range of financial resources that cover expenditures. Fiscal expenditures (including state subsidies and federal government research subsidies) accounted for only about 51 percent of current expenses in FY1999. The remaining half was covered by tuition fees, donations and research subsidies from the private sector, and earnings from basic assets.

This ratio of public finances has tended to decrease gradually since the 1980s. Especially significant has been the decrease in state subsidies. State subsidies accounted for 46 percent of all income in 1980, but fell to 36 percent by 1996. Behind this development has been the financial crunch facing state governments since the 1980s.

For this reason, state universities were forced to secure financial resources through independent efforts. In addition to raising tuition fees, they reduced teaching staffs, slimmed down university organizations by reorganizing into "university systems" that administer multiple universities as a single unit, and increased administration efficiency. The real average tuition fee of four-year universities increased by 38 percent over the ten years from 1992-2002. To address rising tuition fees, the federal government enhanced its already sizeable existing student aid programs (for example, offering the largest-scale Federal Pell Grant to almost four million people in 2000) and introduced new assistance measures such as the HOPE Scholarship tax credit.

In addition, fiscal stringency has played a part in moves to strengthen the accountability of state universities, which operate on taxes, and the effective use of budgets is also desirable. The university evaluations performed by states and university reorganization mentioned earlier are also likely manifestations of this fiscal stringency.