On Independence Day in the US and general election day in the UK,
the Higher Education Policy Institute is publishing An
overview of US higher education (HEPI Report 175) by
Nicholas W. Hillman, a Professor at the University of
Wisconsin-Madison's School of Education. The paper has been
kindly sponsored by Richmond American University London.
The paper discusses:
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The relationship between state funding and income from
fees: In 2022, the 50 US states provided over
$120 billion to public institutions of higher education for
staff costs and operating expenses. Institutions also received
$75 billion in tuition revenue. The relationship between what
states pay and what students pay constantly changes but, in
recent years, states have reinvested in public higher education
while tuition revenue has declined. (See Figure 1 in the
report.)
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The role of the federal government in
Washington: The federal government provides over
$100 billion a year in financial aid programmes and tax
credits, but these totals have been falling for a decade
because enrolments have been declining. (See Figure 2.) Under
the gainful employment rule, any institution with many students
who fail to be gainfully employed after graduation can be made
ineligible for federal aid. While President Trump rescinded the
gainful employment rules, the Biden Administration brought them
back, showing the federal role in regulating higher education
is dependent on the President.
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Four-year courses are up while two-year courses are in
sharp decline: The US institutions in the
non-profit and public four-year sectors have steadily grown
while there has been a sharp decline in the public two-year
community college sector, which is now at lower enrolment
levels than in the 1980s. The for-profit sector has followed a
boom-and-bust cycle, where enrolments rapidly surged in the
2000s only to fall back in the 2010s. (See Figure 5.)
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Student costs: In 2022/23, average annual
tuition and fees for all institutions of
higher education was $14,688 (around £11,600). In addition to
charging tuition, students must cover their living costs, which
averaged $12,985 (£10,275), meaning the total cost of
attendance (known as COA) sums to $27,673 (£21,898). While this
is slightly higher than the maximum annual tuition fee plus
maximum annual maintenance loan for a full-time undergraduate
in England (£9,250 / £9,978, totalling £19,228), these now fall
short of the true costs for institutions and students.
Meanwhile, few students pay the US totals in full – this is
because of financial aid programmes, because public
institutions charge lower tuition than private institutions and
because two-year institutions charge less than four-year
institutions. The costs faced by students in the US also depend
on whether they live in student housing or commute and on
whether they attend a public institution in their home state or
go out-of-state. So US study costs can often work out to be
lower than in England.
The paper additionally covers other areas, such as the repayment
terms for federal student loans and the terms and conditions of
higher education staff.
, the Director of HEPI,
said:
‘This fascinating paper lays to rest the idea that the UK
higher education system has been wholly Americanised in recent
years. While both the UK and the US benefit from multiple
world-class universities, the differences remain greater than the
similarities.
‘Among the many misconceptions squashed in the paper are the
idea that tuition fee income has been increasing at US
universities, the idea that two-year degrees are particularly
popular in the US and the sense that it costs much more to study
in the US than in the UK.
‘After the general election, those in power in the UK are
likely to want to review higher education in the round. Knowing
what works in other countries, as well as what to avoid, will be
vitally important as this process happens.'
The author of the new paper, Professor Nicholas W.
Hillman, said:
‘This report puts context behind many of the major higher
education policy debates taking place in the US today. Despite
many differences, the US offers valuable policy lessons other
countries may find useful.
‘There are very few brief and accessible overviews of the US
higher education system. This report fills that gap and offers an
introduction for researchers and policymakers interested in
the US system.'
Professor Phil Deans, President and Vice Chancellor of
Richmond American University London and Vice President of the
Association of American International College and Universities,
said:
‘The diversity and variety of providers and
provision in US higher education is one of its core strengths,
while the complexity and inefficiencies of its funding is perhaps
its greatest challenge.
‘There are vital lessons for educators, policymakers, and
regulators in understanding how the US system works, and how it
doesn't.'
Notes for Editors
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Dr Nicholas Hillman is a Professor in the
University of Wisconsin-Madison's School of Education, where he
also directs the SSTAR Lab. His research focuses on the
intersection of access and finance, namely in the areas of
student financial aid and state higher education finance. He
has published in the field's top academic journals and his
recent book (with Dr Gary Orfield), Accountability and
Opportunity in Higher Education: The Civil Rights
Dimension, was published by Harvard Education Press. His
research has been recognized for excellence by the Association
for the Study of Higher Education and the National Association
of Student Financial Aid Administrators.
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The Higher Education Policy Institute
(HEPI) was established in 2002 to influence the
higher education debate with evidence. We are UK-wide,
independent and non-partisan. We are funded by organisations
and higher education institutions that wish to support vibrant
policy discussions, as well as through our own events. HEPI is
a company limited by guarantee and a registered charity. HEPI
has previously published comparative studies of higher
education in New
Zealand and Germany and we
have also published extensively on higher education in
Australia.
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Richmond American University
London (established in 1972) is a unique and
independent institution, global in outlook and in practice,
diverse and cosmopolitan in its cultures. Awarding both UK and
US degrees to all students, Richmond occupies a unique standing
in global education, blending two of the world's leading
educational systems. For further information, see https://www.richmond.ac.uk/.
While Richmond American University London kindly provided
financial support for this project, full editorial control was
retained by HEPI and the author.
