States Risk Missing Higher Ed Opportunities

A new study found that not one state in the United States has enough adult workers who have earned some sort of postsecondary degree to meet its workforce demands. Even those states that graduate a high number of workers with degrees are projected to fall well short of their expected needs by 2025.

The College Opportunity Risk Assessment, a state-by-state comparison of risks to higher educational opportunity from the University of Pennsylvania’s Graduate School of Education (Penn GSE), also noted that even states making the most per-student investments are struggling to produce enough graduates.

“The world has changed, but our public policies haven’t,” said Joni Finney, professor of practice at Penn GSE and director of the Institute for Research on Higher Education. “We’re still touting the successes of a system designed in the wake of World War II to allow 30% to 40% of the country, drawn mostly from white, affluent backgrounds, to earn a college degree, even though that system now leaves us woefully unprepared for the challenges of the 21st century.”

According to Finney, states should be prioritizing those students who are traditionally left out of higher education, such as low-income, first-generation, minority, and working-adult students. At the same time, policymakers have to understand that cutting education budgets is turning many students into dropouts with debt and no degree.

Report: When Funding's Cut, Tuition Jumps

For some years there has been disagreement over whether reductions in state and federal funding have been responsible for rises in college and university tuition rates. According to a report in Inside Higher Ed, a new research study concludes that they have, at least in part.

The study, published in the Economics of Education Review, looked at the relationship between tuition and government funding levels since 1987, taking into account factors such as increases in fee revenue and state controls on tuition. It found that schools do pass along 25.7% of cutbacks to students in the form of tuition increases.

“In other words, for every $1,000 cut from per-student state and local appropriations, the average student can be expected to pay $257 more per year in tuition and fees,” explained the Inside Higher Ed report.

That’s an average over three decades; the amount shouldered by students in recent years has been even higher, about $318. Institutions with graduate programs tended to raise tuition more than schools offering only bachelor’s or associate degrees.

“The fact that this has been increasing says to me that in the ‘80s and ‘90s, there probably was a lot more fat in the budget,” said the lead researcher in the study. “And so, when states would divest, it was a lot easier for schools to cut things. Whereas now, the low-hanging fruit is diminishing. We’re having to make tougher decisions, and we’re having to pass more of these costs on to students because there’s not some obvious spending that we can cut.”

Four Ways to Meet Higher-Ed Challenges

Among the key challenges facing higher education in the U.S. today, said Catharine Bond Hill, managing director at Ithaka S+R, an organization working on economic and technological issues in education, and president emerita of Vassar College, are declining graduation rates, rapidly rising costs, and barriers to would-be enrollees, including lower family incomes.

Speaking at the March 4 Mega Session at CAMEX (Campus Market Expo) in Salt Lake City, Hill outlined four possible recourses to help address these challenges.

The first is to direct more public funding to higher education, although she acknowledged this is unlikely to occur at the state level right now. “Our best hope is we won’t face significant cuts in the coming years,” she said.

Because of state reductions and growing costs, families will be asked to shoulder more of the expense to educate their children and loans will be one of the means they use. Although media coverage has focused on the small percentage of students with unmanageable debt, students who do graduate are typically able to meet their payments. Hill advocated giving more attention to helping students get their degrees, rather than on limiting loan programs.

Hill also suggested reallocating existing higher-ed funding toward improvements in outcomes, to ensure institutions remain focused on access to education, affordability, and student success.

Finally, Hill expressed hope that higher education “will somehow benefit from the technological advances other sectors have experienced.” Some new tech has generated a lot of hype—massive open online courses, for example—that has distracted from conversations over how emerging technologies can be harnessed to improve higher ed.

States Boosting Funding, with Caveats

Many states that cut back on higher education funding during the recession are now ready to restore some of those dollars, albeit with strings attached. States are looking for ways to tie funds to student success and affordability.

In Kentucky, the state senate passed a bill to provide $1 billion to public colleges and universities. The amount each school would receive would be based on a variety of performance measures, including:

• 35% on student success metrics such as graduation rates, number of degrees awarded to low-income and minority students, and number of science and math degrees awarded.
• 35% on course-completion statistics.
• 10% on the amount of space devoted to student academics.
• 10% on how much each school spends on instruction and services.
• 10% on full-time enrollment.

In Wisconsin, the governor has proposed giving an extra $140 million to the university system, with $35 million covering the cost of a 5% tuition reduction for students and $43 million contingent on “affordability, workforce readiness, student success, efficiency, and service,” according to the University of Wisconsin. The proposal also calls for allowing students to opt out of paying certain fees that support student organizations. Those amount to about $89 of the total $607 in fees charged annually.

Ohio’s governor has proposed slowly increasing funding to public institutions, but schools would have to submit reports on how they’re cutting costs for students. As part of the plan, colleges and universities would also be expected to provide textbooks as part of tuition with a special fee no higher than $300 per year.