The GI Bill, which arrived late in World War II and paid veterans to attend college, fueled the economic boom and middle-class prosperity that defined America's midcentury. A year after the Soviet satellite Sputnik led to fears that our Cold War enemies would win the arms race, millions of federal dollars tucked into the National Defense and Education Act spurred the generous student aid of the 1960s.

State pays less, students pay more

In 1970, then-Gov. Ronald Reagan imposed tuition for University of California students for the first time (to conform to state law prohibiting tuition, it was called an "education fee"). And in the 1980s, when a shift toward reducing government aid took hold, federal and state funding for higher education began a 30-year-slide, aside from a period in the 1990s.

By 2008, a majority of public four-year universities in the U.S. had crossed the line that the University of California system now faces: Students and their families were contributing more than the states. In the preceding decade, average resident tuition at public research universities had risen 46%, while state appropriations had decreased 5%, according to the Delta Cost Project, an independent research foundation in Washington, D.C., that analyzes higher-education costs and spending. The percentages were adjusted for inflation.

"In inflation-adjusted dollars, we're spending today almost exactly what we were spending 20 years ago to educate a student," said Arkans, the University of Washington spokesman. "However, 20 years ago the state paid 80%, and the student paid 20%. Today the state pays 45%, and the student pays 55%. Next year, it'll go to 35% and 65%."

In Massachusetts, another pioneer in public education, the flagship UMass Amherst announced in 2009 that over 10 years it would double its number of nonresident undergraduates, to 6,500, while maintaining its in-state numbers at 16,000, all to generate revenue. At the current nonresident annual tuition of $23,628, adding 3,250 students would eventually generate $76.8 million a year.

"It's an important shift, one we haven't really done in the past," Chancellor Robert Holub said at the time, according to The Boston Globe.

Most schools are careful to avoid publicly stating that additional nonresident students will translate into fewer resident students, said Donald Heller, the director of the Center for the Study of Higher Education at Penn State.

But in practical terms, that's the outcome. "It's a zero-sum game," Heller said. There are only so many slots. Courses fill up. Students need housing.

At UMass Amherst, for example, first-year students must live on campus. The university knows it will need to build new dormitories. Faculty members -- already battling a staffing shortage -- say additional teachers will be needed.

University of Arizona President Robert Shelton publicly reasoned that nonresidents would add diversity to the student body. But the numbers speak louder: Nonresidents pay $24,596 in tuition; Arizona residents pay $8,238. Even the lower number is becoming out of reach for many. At the three public universities in that state, incoming freshmen will pay 45% to 72% more in tuition than their counterparts did in 2008.

Most college students in the U.S. today attend public institutions of some form: universities, state colleges or community colleges. But tuition at four-year schools has risen more than 320% over 20 years, far more than private college tuition, income or goods and four times the overall rate of inflation, according to research by the Delta Cost Project, which tracked spending from 1988 to 2008.

When schools have raised tuition, it has not translated into more spending by universities and has offset only losses in state appropriations, the study said.

Graduates of public universities now take, on average, $20,500 in student loan debt along with their degrees, according to the Project on Student Debt, an initiative of the Institute for College Access & Success, an independent research nonprofit.

Amid the day-to-day budget battles, legislative discussions about a university's public mission can be overlooked, with little to no objection to efforts to recruit additional private funding in the form of nonresident students.

"The governors and legislators are just backing off and saying, 'Yes, we understand why you're doing it. What options do you have left?'" Heller said. "It's become a much more accepted practice."

In Arizona, the state's three public universities won legislative approval this year to raise their caps for nonresidents to 40%, up from 30%, in response to a proposed $235 million state budget cut. The reduction was more than the past three years' cuts combined and dropped per-student funding to 1967 levels.

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Studies indicate that when tuition is raised during a recession, it does not go back down once the economy picks up. In fact, once a new income stream is realized, states feel comfortable making additional cuts, experts say. Universities raise tuition again. More resident slots go by the wayside.

"It can get to be a downward spiral," Heller said. "It gets to where the universities in essence become de facto privatized institutions."

When nonresidents fall short

But here's a kicker: Attracting and accommodating those high-paying out-of-state students costs money in itself. Universities now invest millions of dollars in recruitment efforts, often disbursing partial scholarships to top-performing nonresidents instead of to needy state residents.

And what happens if the university can't attract enough nonresidents?

This year, the University of Rhode Island learned that 260 fewer out-of-state students than expected had signed on for the fall and found itself staring at a $6.9 million shortfall.

The university's solution: It raised tuition for in-state students. Resident tuition at the university will increase 8.5%, to $10,476. Nonresident tuition, meanwhile, will rise just 1%, to $27,182.