Washington, D.C. — Colleges and universities across the United States are facing a funding crisis thanks to the Trump administration’s Big Beautiful Bill (BBB), enacted into law in July 2025.
The BBB will slash $186 billion in food assistance and more than $1 trillion in health care spending over the next decade. As states absorb these costs, a new analysis from the Center for American Progress pinpoints public higher education as one of the most vulnerable sectors for budget cuts.
The report compares each state’s higher education funding level to its overall fiscal capacity, identifying the states that allocate relatively little support for higher education relative to their wealth. The report identifies promising ways to boost state tax revenue for public colleges and universities based on existing strategies at play in Massachusetts, Colorado, Washington, and Oregon. It also highlights the importance of building robust rainy day funds and creating dedicated funds for education.
Key findings from the CAP analysis include:
- Following the Great Recession, inflation-adjusted state funding per full-time equivalent student dropped from $10,714 to $8,213 from 2008 to 2012, resulting in an 18 percent spike in average tuition.
- Currently, 21 states fall below the national average in both per-student funding levels and state funding effort.
- New Mexico, Wyoming, and Hawaii boast both high postsecondary education funding and state effort.
- In contrast, New Hampshire, Pennsylvania, Vermont, Colorado, Rhode Island, and Delaware all rank low on both funding levels and funding effort.
- Federal funding cuts disproportionately affect community colleges, which are important lanes of opportunity for low-income students.
“State leaders have a choice to make,” said Sara Partridge, associate director of Higher Education at CAP and author of the report. “They can let public higher education become a budget casualty, or they can take proactive steps to ensure program quality remains high and degrees remain accessible to future generations.”
Read the report: “Stabilizing and Strengthening State Funding for Public Higher Education After the Big Beautiful Bill” by Sara Partridge
For more information on this topic or to speak with an expert, contact Mishka Espey at [email protected].