New Jersey families hoping to send their children to college face a perfect storm of declining income, cuts in state support to public colleges and universities, and steadily increasing tuitions and student fees. New Jersey has cut funding for higher education by 27 percent since 2008 when adjusted for inflation, a decrease of more than $2,500 per student, according to a new report from the Center on Budget and Policy Priorities (CBPP). These cuts have driven up tuition and student fees, undermined educational quality and made it harder for the state to attract businesses that rely on a well-educated workforce.

The immediate consequences of this are clear: the average tuition at a public, four-year college in New Jersey has increased by 13 percent or $1,429 since the start of the recession. This increase comes on the heels of large increases in tuition and fees at New Jersey’s public, four-year colleges in the early 2000s; in its 2006 report Flunking Out, New Jersey Policy Perspective (NJPP) found that tuition and fees at those schools increased by 47 percent from 2000-01 to 2004-05.

“Despite the prevailing mythology that tax rates are the major factor in business location decisions, the evidence is overwhelming that it is the quality of the workforce that is most important,” said NJPP president Gordon MacInnes. “Nothing better measures workforce quality than educational levels, which is one of New Jersey’s greatest, but largely ignored, assets.”

“Given this wisdom, one would expect that New Jersey would invest first in higher education instead of leaving it at the back of the line,” MacInnes added.

When the recession hit in 2008 and tax revenue dropped, most states relied heavily on spending cuts rather than a more balanced mix of spending cuts and revenue increases. As a result, many states slashed funding for public colleges and universities.

In New Jersey, these cuts came at a time of a spike in enrollment at public colleges and universities, as students sought more affordable opportunities closer to home due to sharp declines in family incomes. In 2007, real median family income (meaning that it is adjusted for inflation) was $88,456; four years later it had plunged by 7.3 percent to $82,255. It is no wonder that New Jersey’s traditional exodus of middle-class students to private liberal arts colleges out-of-state has slowed while enrollment at home-state public institutions has increased by almost 20 percent in the five years covered by the CBPP study.

The combination of these factors is likely to produce even greater expenses and rising student loan debt as students grapple with closed courses and delayed graduations. The record is dismaying: at only three of New Jersey’s 12 four-year institutions do half the students graduate in four years (The College of New Jersey, Ramapo College and Rutgers-New Brunswick). And students from poor and low-income working families — as measured by eligibility for Pell Grants — have the most difficult path to graduation. At New Jersey City University, where almost two-thirds of students rely on Pell Grants, only slightly more than one third graduate within six years.

If not for the rising level of federal support as a result of the 2009 American Recovery and Reinvestment Act, which increased tax credits and Pell Grants, the results would have been even worse.

To reverse these trends, New Jersey needs to re-introduce higher education as a central topic of public conversation and spending. A large and growing share of jobs will require college-educated workers, and the only way to make sure New Jersey students are prepared is to keep higher education affordable.

“More jobs in the future will require college-educated workers,” said Phil Oliff, policy analyst at the Center on Budget and Policy Priorities and author of the report released today. “For the sake of its economy and future workforce, New Jersey should start reinvesting in its colleges and universities now.”