1 in 4 State Colleges Spent More Than They Took in Over 5 Years

Tuition costs are rising, but colleges don’t just make money off the fees they charge their students.

Along with endowments and athletics, state schools depend on public funding from their states to meet operational costs. But according to the latest LendingTree analysis, 24.6% of state schools operated in the red between 2017 and 2021 — the last five fiscal years for which data was available. That percentage dipped to 20.1% when looking solely at 2021.

Worse yet, a lack of funding can cause tuition rates (and the resulting student loan debt) to rise even more as schools struggle to make ends meet — which can make a college education even more inaccessible to lower-income students and their families. Here’s a closer look at our findings.

Key findings

• 24.6% of the state schools analyzed spent more than they took in over the five fiscal years between 2017 and 2021. That equated to 131 of 533 state schools. The University of New Hampshire at Manchester was the most underfunded — at 34.1% — in this period. If you narrow the focus to the 2021 fiscal year — the latest available — 107 of the 533, or 20.1%, were in the red. In 2021, CUNY City College in New York had a massive 106.0% deficit — the biggest by nearly 45 percentage points.
• New York had the highest rate of state schools running at a deficit between the 2017 and 2021 fiscal years. In New York, 73.7% (or 28 of 38) of state schools operated in the red in this period, followed by Pennsylvania (71.4%, or 10 of 14), Connecticut (66.7%, or four of six), New Mexico (66.7%, or four of six) and Hawaii (66.7%, or two of three). Note that three institutions in Pennsylvania and four in Connecticut weren’t included in our analysis due to missing data.
• New Mexico shifted to the top spot when looking at 2021 alone. In New Mexico, 100.0% (or six of six) state schools ran at a deficit in 2021. It was followed by Hawaii (66.7%, or two of three), New York (52.6%, or 20 of 38) and Georgia (52.6%, or 10 of 19).
• Six states’ schools ran at a combined deficit over the five fiscal years analyzed. Mississippi was in the red by the most (7.6%, or $1.4 billion), followed by Connecticut (4.9%, or $845.2 million), New Mexico (2.8%, or $477.0 million) and New York (1.7%, or $1.2 billion). Another two states — Hawaii and Pennsylvania — finished in the red by less than half a percentage.
• That total dipped to three states’ schools in the 2021 fiscal year alone. New Mexico again shifted to the top of the 2021 list, at 22.2%, or $854.0 million. It was followed by Connecticut (13.3%, or $484.9 million) and New York (2.4%, or $354.9 million). Hawaii was slightly in the red (by $221,000) but rounded to a 0.0% deficit.
• Half of the 10 most underfunded state schools between 2017 and 2021 were Minority-Serving Institutions (MSIs). This was more common in 2021 alone, as nine of the 10 most underfunded state schools that fiscal year were MSIs.

25% of state schools operated in red over 5 years

Over the five fiscal years between 2017 and 2021, 131 of the 533 studied schools (24.6%) operated at a deficit. The University of New Hampshire at Manchester had the highest five-year deficit at 34.1%, followed by two schools in the City University of New York (CUNY) system: City College (31.2%) and the John Jay College of Criminal Justice (21.2%).

CUNY and SUNY (State University of New York) schools were well-represented: Seven of the 15 schools with the deepest five-year deficits are part of the state’s public university systems. Looking beyond our studied period, funding cuts from the city of New York totaled $155 million in fiscal year 2023, with more slated for the 2024, 2025 and 2026 fiscal years — so the problem will get worse rather than better.

Most underfunded public colleges between the 2017 and 2021 fiscal years

Source: LendingTree analysis of Integrated Postsecondary Education Data System (IPEDS) data from the National Center for Education Statistics (NCES). Notes: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher. School names are displayed as styled in the IPEDS database.

When the focus was narrowed to only fiscal year 2021 — the last for which data was available — CUNY City College took the No. 1 spot, with a deficit of 106.0%, or $580.8 million. However, the most underfunded list in this case is headlined not by New York but by New Mexico, which had five of the 10 state schools with the deepest deficits during this period.

In addition, some schools high on the 2017-to-2021 list fell off based on the last year alone, including Rutgers University-Camden and the University of Mississippi.

Most underfunded public colleges in the 2021 fiscal year

Source: LendingTree analysis of IPEDS data from the NCES. Notes: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher. School names are displayed as styled in the IPEDS database.

New York had highest rate of state schools running at deficit between 2017 and 2021; New Mexico topped 2021-specific list

Of New York’s 38 public colleges, 28 ran at a deficit between 2017 and 2021. That’s 73.7% of its state-funded schools running in the red.

During that period, the runner-up was Pennsylvania, with 10 of its 14 schools (71.4%) running at a deficit. The schools in the commonwealth that ran the most in the red during that period were Mansfield University of Pennsylvania at 6.9% and Shippensburg University of Pennsylvania at 5.4%.

States with the highest rate of underfunded public colleges between the 2017 and 2021 fiscal years

Source: LendingTree analysis of IPEDS data from the NCES. Note: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher.

Looking at 2017 to 2021, Connecticut, New Mexico and Hawaii tied for third at 66.7%, though the sample sizes were far smaller than in New York and Pennsylvania.

The story changed when focusing on data exclusively from fiscal year 2021, where New Mexico led with 100.0% of its six schools running at a deficit. In addition, New York dropped to third, even though more than half (52.6%) of its state-funded universities ran in the red.

Hawaii ranked second, with two of its three public schools (66.7%) running at a deficit in 2021: the University of Hawaii-West Oahu at 3.3% and the University of Hawaii at Hilo at 2.1%.

States with the highest rate of underfunded public colleges in the 2021 fiscal year

Source: LendingTree analysis of IPEDS data from the NCES. Note: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher.

Mississippi schools ran at highest combined deficit over 5 years, while New Mexico schools led 2021 list

While New York and New Mexico, respectively, led for the highest percentage of publicly funded universities running at deficits between 2017 and 2021 and during 2021 alone, Mississippi had the highest total deficit over the five studied years.

Mississippi schools had revenues that were $1.4 billion below operating costs between 2017 and 2021, representing a five-year deficit of 7.6%. The University of Mississippi had the highest deficit in the state during that period — higher, in fact, than the statewide deficit, at $1.8 billion, or 16.8%.

States with the highest combined public college deficits between the 2017 and 2021 fiscal years

Source: LendingTree analysis of IPEDS data from the NCES. Note: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher.

Again, things shifted when looking solely at data from 2021 — New Mexico led with a statewide deficit of $854.0 million, or 22.2%. Connecticut stayed in second, as it did in the fuller data set — though its deficit rose to 13.3% in 2021 rather than the 4.9% it saw over the five years.

For both periods, the Connecticut school with the highest deficit was Charter Oak State College, which came up $11.8 million short between 2017 and 2021 (a deficit of 13.7%) and $4.2 million short in 2021 alone (a deficit of 22.2%).

States with the highest combined public college deficits in the 2021 fiscal year

Source: LendingTree analysis of IPEDS data from the NCES. Note: This list was limited to four-year or greater institutions under primary control of their states that primarily offer baccalaureate degrees or higher.

Underfunded schools list includes significant number of Minority-Serving Institutions

Many of the schools on the underfunded list are Minority-Serving Institutions — those specifically geared toward helping underserved racial populations access higher education and its socioeconomic benefits.

For instance, from the 2017-to-2021 data set, the institutions with the second-, third- and fourth-highest deficits — CUNY City College, CUNY John Jay College of Criminal Justice and Rutgers University-Camden, respectively — are part of the Asian American and Native American Pacific Islander-Serving Institutions (AANAPISI) program. (The two CUNY institutions are also Hispanic-Serving Institutions, or HSIs).

The school in that data set with the seventh-highest deficit, CUNY Medgar Evers College, is a Predominantly Black Institution (PBI), while the ninth-highest, New Mexico State University-Main Campus, is also an HSI.

Such institutions are scattered across both lists. In the five-year data set, 31 HSIs are represented, along with:

• 21 AANAPISIs
• 3 PBIs
• 2 Historically Black Colleges or Universities (HBCUs)
• 2 Alaska Native and Native Hawaiian-Serving Institutions (ANNHs)
• 1 Native American-Serving Nontribal Institution (NASNTI)

In 2021, nine of the top 10 schools on the list are MSIs, as are 41 of the 107 schools that appear on the list overall.

Understanding the impact of schools being underfunded

Since tuition makes up a large portion of universities’ revenue, schools across the U.S. were already suffering from the COVID-era decline in enrollment, says LendingTree student loan expert Michael Kitchen.

“As colleges run short on money, they usually raise tuition,” he says — which could lead even fewer students to enroll. (While many colleges are also funded by endowments, these tend to be slightly higher at private schools than public ones.)

In addition, revenue shortages can cause colleges to depress faculty salaries, which can make it difficult for schools to attract and retain talented educators.

Indeed, students have been moving away from liberal arts and humanities programs: Many schools have seen precipitous drops in students enrolled as English majors, for instance. (Such students are often forced to focus on securing a well-paying job rather than choosing a major based on mind expansion or passion — largely in service to paying off their resultant debt.)

So it’s not a leap to say that the underfunding of public universities, coupled with the skyrocketing cost of tuition, could change the shape of American education — it already has.

Methodology

LendingTree researchers compared revenue and expenditure data from the 2017 through 2021 fiscal years of 533 qualifying state institutions to determine which were run at a deficit for all five years combined, as well as 2021 individually.

To be included in the analysis, institutions had to:

• Be identified as a four-year public institution that primarily grants baccalaureate degrees or above
• Be under the primary control of its state
• Have the relevant information available in the Integrated Postsecondary Education Data System (IPEDS) from the National Center for Education Statistics (NCES)

With federally funded schools in Washington, D.C., as an exception, locally, federally and territorially controlled institutions were excluded, as were the following state institutions for which relevant data wasn’t available:

• Arizona State University Digital Immersion (Arizona)
• University of Connecticut (Waterbury, Avery Point, Stamford and Hartford campuses, Connecticut)
• Purdue University Global (Indiana)
• Oregon State University-Cascades campus (Oregon)
• Pennsylvania State University (Pennsylvania)
• Lincoln University (Pennsylvania)
• Temple University (Pennsylvania)
• Texas Tech University Health Sciences Center (El Paso campus, Texas)
• University of Washington (Bothell and Tacoma campuses, Washington)
• West Virginia University Institute of Technology (West Virginia)
• University of Wisconsin (Milwaukee Flex and Parkside Flex campuses, Wisconsin)

Researchers analyzed the 2023 list of Minority-Serving Institutions (MSIs) from the U.S. Department of Education, via the Rutgers Center for Minority Serving Institutions.