Research Report Variation in Community College Funding Levels
A Focus on Equity
Sandy Baum, Jason Cohn
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In many states, there is wide variation in funding levels among community colleges. Several factors account for these differences, including state funding allocation formulas, unequal local funding from property tax revenues, and political forces. To ensure equal opportunity among students from different racial and ethnic groups, community colleges need equitable funding. If community colleges enrolling large shares of students from historically underserved groups receive less funding than other institutions, inequities could hinder these students’ paths toward economic mobility.

Using data from the 2018–19 academic year to estimate per student funding, we investigated whether community colleges that enroll large shares of Black and Hispanic students, as well as students from low-income backgrounds, have the same level of resources as those that enroll more white and higher-income students. We find the following:

  • The data show no consistent visible patterns of inequality in community college funding across the nation, but do show concerning patterns in a few states. In many states, there are no measurable differences in average funding levels across demographic groups. In some states, funding levels favor one group, and in other states, that same group receives less funding.
  • Most states with large shares of Black and Hispanic students do not have measurably lower per student funding for these students.
  • States that rely more on local sources to fund their institutions tend to have more funding overall. Specifically, a 10-percentage-point increase in the share of local funding is associated with an increase of $458 in total state and local funding per full-time-equivalent student in the state. But there is no clear association between the share of local funding and the degree of unequal funding by race or ethnicity.
  • Some states intentionally vary funding levels depending on institution size to compensate for the higher per student costs that smaller campuses experience, which can lead to funding differences among demographic groups. In Virginia, for example, Hispanic students are concentrated at larger institutions, which leads to less funding per student, on average.

Per student funding varies dramatically among community colleges within states and the concentration of students facing steep barriers to success at certain institutions could lead to inequitable funding patterns, exacerbating their challenges. As a result, focusing on the adequacy of overall community college funding within states is insufficient to capture potential inequities. Further, equal funding does not necessarily indicate that funding is equitable or adequate for providing sufficient opportunity to all students, as some groups may need more funding to achieve the same level of academic success.

Our failure to find systematic national funding gaps for Black, Hispanic, and low-income students is encouraging, but it does not mean community college funding patterns are equitable. As states modify their funding patterns, studying the demographic distribution of students across institutions and gathering more evidence about the appropriate adjustment sizes for differences in costs because of programs, as well as size or rural/urban status, could lead to more equitable outcomes.

Research Areas Education
Tags Higher education
Policy Centers Center on Education Data and Policy