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Funding for schools rising, report suggests

While a report released Monday says state and local funding for higher education is up for the first time since the 2008 recession, Boston University is unlikely to see financial changes because of its status as a private institution.

The report, which was issued by the State Higher Education Executive Officers, found state and local funding for colleges and universities increased 0.7 percent to $78.8 billion, said SHEOO President George Pernsteiner.

“The State Higher Education Finance report is issued annually,” he said. “It tracks state and local support for public higher education [and] tuition support for public higher education and shows each state’s figures in terms of public and tuition support for public higher education and for student financial aid.”

The report found that while funding in some states declined, the country as a whole experienced a small but significant increase, Pernsteiner said.

“State and local support for higher education is increasing nationally, after several down years during the recession,” Pernsteiner said. “That pattern of recovery is mixed in different parts of the United States. Although the overall average of state and local support in constant dollars is up by 0.7 percent, ending several years of declines, 20 states still saw declines in 2013.”

BU spokesman Colin Riley said private institutions such as BU do not receive state or federal funding.

“Boston University doesn’t receive state or federal funding because it is a private institution,” he said. “If you’re a student from Massachusetts who receives a state scholarship that comes with you, but that’s a very small percentage of people. State funding is only for public institutions such as the University of Massachusetts.”

While support for schools from the government will take a long time to be fully refurbished, support for higher education is increasing at a fast and hopeful rate, Pernsteiner said.

“Governmental support is being restored slowly, but the relative share of tuition support for public higher education institutions is likely to stabilize at a higher level than prevailed prior to the recession,” he said. “It now stands at more than 47 percent.”

Michael Manove, an economics professor at BU’s School of Management, said the increase in funding is a reflection of the 2008 recession coming to a close.

“The increase is small, and it probably represents the fact that we’re coming to the end of the financial crisis and the great recession,” said Manove.

There are two factors that contract government funding during times of recession, according to Manove.

“Residents and businesses are earning less on average and paying less in the way of state and local taxes,” he said. “The constitutions of most states do not permit deficit spending, so states are limited by their tax revenues and transfers from the federal government.”

Private institutions such as BU are forced to compensate for not receiving government funding through more creative ways, such as tuition hikes and donation scouting, Manove said.

“BU compensates primarily with high tuition fees, though we give substantial discounts to many students in the form of financial aid,” he said. “Moreover, BU does receive government funding in the form of grants and contracts. As far as I can tell, during the fiscal year 2012-13, BU received upward of $52 million in grants and contracts, down from more than $58 million the year before.”

While students looking to attend private, first-rate institutions such as BU should expect to take a financial hit, the benefits of the education are often worth the cost, Manove said.

“The existence of an educated populace benefits the entire society as does the basic research that universities perform,” he said. “All this is expensive, so if students understandably don’t want to pay and apply political pressure against high tuition fees, then society in the form of the taxpayer must pay.”

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