The Coalition for Transforming Higher Education Funding and its fellow education equity advocates have been deeply involved with the process of developing the Adequate and Equitable Public University Funding Act, working diligently over the last four years to create a funding system that helps ALL public higher education institutions and college-going students in Illinois.
There has been a lot of misinformation circulated, causing confusion for students, families, communities, colleges, universities, and legislators.
Here are some data and research-backed facts debunking those arguments.
Claim: These bills would allocate only 28% of new state funding to the U of I System, even though they educate 53% of all public university students in Illinois, including 45% of Pell-eligible students.
Fact: All public universities and their students will benefit from the implementation of SB13/HB1581, including the U of I system. First, the formula has a “hold harmless” provision—meaning no university would lose funding. Second, while the U of I system will receive a smaller share of newly-allocated dollars than they are used to receiving (because they are more adequately funded than other universities), they will continue to receive roughly 50% of overall state appropriations for years to come. Put simply, U of I system is protected, but those universities with significantly greater need will increase their share of new dollars so they, too, can approach adequate funding levels.
Another way to understand this change is to understand that the university funding pie gets larger. So while U of I may get a smaller share of new dollars, that smaller share is worth more! Of the $135 million in new funding, the U of I System will receive 28% or $38M. This is $20.5 million more than they would receive with the proposed 3% funding increase in FY 2026 – even though they would get 53% of that smaller amount (because their base funding level is higher than the other universities and systems). Better still, the formula allows them to distribute that amongst their campuses as they deem appropriate. And to reiterate, in FY26 and beyond, the U of I System would continue to receive nearly 50% of the total funds appropriated to public universities.
Finally, we need to look individually at the universities within U of I, because they are in very different circumstances. Under this formula, UIC is eligible for the largest proportion of new state investment, ranging from 18% in Year 1 to 24% in Year 15. Indeed, they stand to gain a great deal, should this bill pass. After 15 years of funding under the formula, UIC will receive $436 million more than they currently do, which is not only the biggest increase of any institution, it is roughly double the increase of any other university. And this is a dynamic formula, so while UIUC is at 89% of adequacy now, they will be in line for more state funding if/as they enroll populations with greater need.
Claim: This funding model would reduce institutions’ ability to provide financial aid.
Fact: Nothing could be further from the truth, which is why all but one of the state’s universities and systems supports the bill. The funding model proposed by SB13/HB1581 calls for all institutions to have more funding, actually expanding their ability to provide support to students, including through financial aid. Specifically, and for example, the additional funding means that the U of I system could give $5,000 scholarships to 4,100 of its students with the extra money it would receive under Year 1 of the formula, versus the 3% increase proposed for FY26.
The formula intentionally does not directly prescribe the way universities use the new funding, but it will, through resources, incentives, and monitoring, result in institutions becoming more affordable for students. For the first time Illinois will have funding mechanisms to ensure more transparency on how institutions are spending their dollars and will explicitly and publicly track affordability and cost of attendance for each institution.
Additionally, the formula does not in any way overlook, modify, or even deal with the fiduciary or other obligations of the Board of Trustees for any university or university system. SB13/HB1581 is compliant with all the fiduciary responsibilities of all university boards of trustees and authority to oversee budgeting and managing of individual universities.
Claim: The funding model increases the pressure to raise tuition.
Fact: The opposite is true. The biggest pressure on tuition costs has been, and continues to be, the unsustainably low level of state funding. The proposed formula puts the state on a path to full funding, creating annual increases that improve the financial position of every university, which in turn reduces the pressure on tuition. Beyond that basic reality, the new formula puts in place data collection and reporting that allows all involved to monitor whether costs actually come down and for which students – something we currently cannot do.
This bill not only has universities give the state annual data on their real costs of college, but it mandates that, along with new funding, they improve affordability for students who need it most. Every year their progress will be (1) reviewed by the Illinois Board of Higher Education (IBHE) and an independent commission of experts, and (2) made public so all legislators and the public can see it. And if universities get funding but don’t make progress, there will be a series of consequences to push them in the right direction.
Claim: The funding model undermines our statewide research, innovation, and outreach efforts.
Fact: By both growing state investment in universities and ensuring all institutions benefit, the new funding model will enhance statewide programs, innovation, research and more, at every university. That said, some programs that are distinct and unique to the U of I system (or other universities) and that contribute to the state’s economy largely fall outside of the model. What that means is that those programs can and will continue to receive substantial grants directly from federal, state, and private gifts, appropriations, and contracts. The bill does not change or interfere in those separate programs. As importantly, none of these grants and contracts are accounted for in the Resource Profile of the model, which benefits those universities most likely to receive that direct funding – most notably the University of Illinois system.
Claim: The funding model disproportionately cuts funding for the flagship system, up to 74% of any funding reductions.
Fact: It is true that if there are cuts in the first year of the formula (a circumstance that is clearly and directly contrary to the entire intent of SB13/HB1581, and in tension with the political effort to pass the bill), U of I system does in fact shoulder the biggest burden for those cuts. But two things to keep in mind. First, that’s how equity works: those that disproportionately receive the most state funds take on a greater share of cuts as well, and those that get less from the state (and tend to be in a weaker financial position) take a smaller share. Second, because state funding makes up a relatively smaller share of U of I’s overall budget, that cut (unlikely though it is) will have a manageable impact. Currently, state funds make up 9.5% of the U of I system’s budget, compared to universities that receive 35% or 45% of their revenue from the state. As such, a steeper share of cuts will impact U of I much less than a similar, or even smaller cut, at an institution more dependent on state funding. This is also only true in the first year of the formula; in later years, the UI system’s share of the cut continues to decline substantially, dropping to 59% in Year 5 and further to 40.5% in Year 15.
This is the only formulaic way to ensure the funding gaps for universities which are starting farther from their adequacy target do not worsen to unsustainably low levels, as they have done in the past. One central goal of SB13/HB1581 is to build the capacity of all public universities, which includes ensuring that state funding cuts do not put any public university in an unsustainable fiscal position.
Claim: The formula should fund institutions based on outcomes measures, like graduation rates, in order to hold universities accountable for serving their students.
Fact: First, this is not a new idea, in the country, or here in Illinois. While it may sound appealing, performance- or outcomes-based funding models have been proven ineffective at best, and counter-productive at worst. These models create conditions where under-resourced universities cannot succeed, and institutions are perversely incentivized away from serving higher-need students. After reviewing the extensive research on the subject, and hearing directly from several states that have gone the route proposed by the U of I (all of which are re-evaluating and going back to the drawing board), the Commission explicitly rejected this approach.
Instead, the Commission and SB13/HB1581 proposes an accountability system that brings together stakeholders from around the state to holistically evaluate universities’ spending, affordability, enrollment, and success. Recognizing that this funding approach represents a substantial reinvestment from the state into the public university system, the Commission introduced accountability and transparency measures intended to report, evaluate, guide, and ultimately direct, if necessary, universities toward spending practices that are aligned with the state goals that first created the Commission. These measures would bring a level of transparency and accountability that has never been seen in Illinois higher education.
Claim: The formula ignores student success, economic impact, and the system-wide responsibility to serve all 102 counties in Illinois.
Fact: If Illinois commits to fully funding this formula over the next 15 years, we will see 15,000 more university graduates every year, a powerful and necessary inflow of talent into our near-term future economy. These graduates would generate $692 million in new state tax revenue every year, save $156 million in spending on Medicaid, SNAP, and incarceration, and spend $5.3 billion more in their local economies every year.
The quality of life also increases for the citizens of Illinois. College graduates are three and a half times less likely to live in poverty, twice as likely to vote, and more likely to live healthier lives. For every student we support, we’re also building stronger families, neighborhoods, and communities.
Join us in transforming higher education and allowing every person in Illinois who wants a college degree to achieve one. Here’s what you can do:
