The answer: when state funding is declining and universities go elsewhere (out of state and out of the country) to recruit students.
As Randy Olson demonstrates, state funding per student at U.S. four-year public universities has been on the decline since early in the new millennium.*
And, as Kevin Carey argues, since 2000, student enrollment has fundamentally changed, especially at national public universities.
Most students attending public universities stay in the state where their parents reside, in large part because in-state students have traditionally received a steep tuition discount. Out-of-state students have long been in the minority and pay tuition closer to that charged by private universities. As recently as 2000, national and regional public universities were similar in this regard. That year, 80 percent of national public university students were in-state, compared with 86 percent at regional public universities.
But in the years that followed, the two groups began to diverge. At regionals, little changed. College enrollment swelled in every state after 2000 as the baby boom echo generation finished high school and a larger share of high school graduates enrolled in college. The additional students at regional universities looked much like the old ones. From 2000 to 2012 (the latest year of available federal data), nine out of 10 additional regional public university students were in-state.
The pattern at elite national universities was very different. There, the majority of additional students were from other states. Instead of extending their traditional mission of providing an affordable, high-quality education to local residents, national universities focused on recruiting students from other states and nations, many of whom paid much higher tuition rates. As a result, the number of in-state spots relative to the college-going population as a whole declined significantly at national public universities.
In other words, national public universities are increasingly behaving like private universities, and regional public universities are attempting to educate in-state students with less and less public funding per student.
That’s why the public university system in the United States is quickly becoming public in name only.
*To be clear, overall state funding for public universities actually increased in real terms until the 2007-08 financial crash (and fell precipitously since then) but an even larger increase in student enrollments means that state funding per student has fallen dramatically in comparison to the late 1980s and early 2000s.