State Support of Higher Education Provides Short- and Long-Term Student Benefits

Title: State Investment in Higher Education: Effects on Human Capital Formation, Student Debt, and Long-Term Financial Outcomes of Students

Authors: Rajashri Chakrabarti, Nicole Gorton, and Michael F. Lovenheim

Source: Federal Reserve Bank of New York

A new report from the Federal Reserve Bank of New York reinforces the value of state support in producing positive outcomes for public college students. The study analyzes the financial outcomes for two-year and four-year students up to their mid-30s.

The results indicate that state appropriation increases are typically passed on to students through lower tuition in the four-year sector and through price and quality in two-year colleges.

Findings also relay that increased state support leads to lower debt and shortened time-to-degree among students at four-year institutions. In the two-year sector, state appropriation increases lead to increased educational attainment, as well as lower likelihood of delinquency and default on student debt. Further, state support increases are tied to car and home ownership, in addition to higher credit scores.

Click here to read the report.

—Anna Marie Ramos