Peter R Orszag, Columnist

Why Public Universities Are Getting Shortchanged

The rising share of health-care costs has crowded out state funding for higher education.

They just might cost more.

Photographer: Erik McGregor/Pacific Press/LightRocket via Getty Images

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Over the past decade, state government funding of higher education in the U.S. has fallen by $7 billion after inflation. The implications include increased tuition, which has received much public attention, but also a reduction in the relative quality of public higher education, which has gone largely unnoticed.

Surprisingly, the most important driver of these trends at public institutions has little to do with education directly: it is instead the rising cost of health care.