Government Investment in Public Hispanic-Serving Institutions
by Christopher J. Nellum and Katherine Valle
As the United States (U.S.) looks to the future, current demographic trends indicate that Latinos represent the nation’s largest minority group and will continue to be the fastest-growing segment of society (Motel and Patten 2011). Moreover, Latino enrollment in postsecondary education has doubled in the last decade. Our ability to provide quality education to this growing demographic is not related to meeting a special interest, but serves all Americans if we are to ensure that the U.S. remains an effective democracy and economically competitive in a global market place (Ortega, Frye, Nellum, Kamimura, and Vidal-Rodriguez 2013 [sign-in required]).
While all colleges and universities have a responsibility to educate these students, HSIs play a distinctive role. HSIs constitute 12% of all U.S. colleges and universities, but they educate 60% of enrolled Latino students in higher education (Excelencia in Education 2015). Our research, summarized below, suggests that HSIs face unique funding challenges relative to other colleges and universities.
This issue brief provides an overview of a pattern of historic inequities in funding that led to federal recognition and support for HSIs, explains the current revenue streams available to these institutions, and examines trends in public investment during the recent recession that could threaten their long-term viability.
How are Hispanic-Serving Institutions Funded?
Some of the largest revenue sources for public HSIs are federal, state, and local allocations to postsecondary education (Figure 1). During times of economic uncertainty, such as the recent recession, many institutions were required to supplement decreases in government revenue with income from tuition and fees and, when available, through private sources and endowments. The ability of HSIs to raise tuition and endowment revenue is constrained somewhat by the financial circumstances of the communities and students they serve.
Figure 1: Revenue Shares at All Public HSIs and Non-HSIs, 2012
Federal Investment in HSIs
Three decades ago, Latino leaders and the federal government recognized that state governments allocated fewer funds to institutions that served a significant portion of Latino undergraduates. It was not until the 1998 reauthorization of the HEA that the federal government enacted efforts to level the playing field by amending the HEA to include funding for HSIs under Title V, Part A. Despite the commitment by the federal government to invest in HSIs, demographics have changed such that enrollment growth challenges the ability of federal appropriations to keep pace with the rapidly increasing number of recognized institutions.
Figure 2: Count of HSIs and Emerging HSIs,* 2000–14
Figure 3: Total Federal Aid for HSIs [adjusted for inflation] (Title V, Part A and Title III, Part F), 2000–15
State and Local Funding for HSIs
State and local appropriations remain the primary source of revenue at all public colleges and universities, particularly at HSIs. However, two trends highlight the unique disadvantage HSIs face when legislatively allocated taxpayer state and local appropriations are examined:
- Disparity in Full-Time Equivalent (FTE) Student Funding Across Institutional Types: The funding formulas used by states suggest that policymakers value students at HSIs differently. Public four-year HSIs receive, on average, less total revenue per FTE student than public four-year institutions that are not designated as Hispanic-serving (Figure 5)*.
Figure 4: State and Local Appropriations at All Four-Year HSI and Non-HSI Public Colleges and Universities, 1999–2012 (by FTE and 2012 Dollars)
Figure 5: State and Local Appropriations at All Two-Year HSI and Non-HSI Public Colleges and Universities, 1999–2012 (by FTE and 2012 Dollars)
To achieve the educational attainment goals outlined by the federal government and leading philanthropic foundations, HSIs should be among the colleges and universities that policymakers recognize are important to aid in the reduction of social and educational disparities. Moreover, because Latinos are the fastest-growing demographic group in the U.S., the plight of affected students and HSIs should be at the center of future legislative agendas and political debates about funds allocated to postsecondary education.
The full version of this policy brief is available here. (PDF) 1 MB