State Higher Education Policy is Essential to Economic Recovery
The COVID-19 crisis has massively disrupted our health, our society, and our economy. State policymakers are appropriately focused on addressing the most urgent needs of their residents. Soon, though, policy and budget decisions will arise that will affect the economic prosperity of states for years to come. Ensuring the vitality of public higher education must be core to those decisions.
Public higher education is very much at risk. In the shorter-term, many public colleges and universities will face severe declines in revenue due to closed campuses and the shift to remote learning. With rapidly diminishing revenues themselves, states are likely to reduce expenditures across the board, including severe cuts to higher education spending. Many states are already spending less in real terms on higher education than they were before the 2008 Great Recession.
Yet, the 2008 recession taught us that investment in higher education is essential to economic recovery. Enrollment in higher education tends to be counter-cyclical: as people are laid off and job prospects dry up, enrollment in higher education increases, especially for adult students seeking new, marketable skills. Additionally, nearly all of the 11.6 million net new jobs created after the Great Recession went to college-educated workers. This disparity is compounded by broader labor market trends that were already preferencing workers with postsecondary training. Moreover, one third of Americans believe they will need more education if they lose their job due to the COVID-19 pandemic.
Beyond their role in education and training, public colleges and universities are major employers and economic engines for their regions, if not their whole states. When these institutions are forced to scale back, it negatively impacts the workforce and economy of today, not just the workforce and economy of tomorrow.
An important disclaimer: with declining revenues and other mandatory expenditures–such as for health care, K-12 education, and pensions–states may not be in a position to maintain, let alone increase their investment in public higher education. It is critically important that the federal government further backstop state budgets or provide additional direct infusions to public higher education. If that does not happen, state policymakers’ options are very limited.
But with that said, there are several higher education policy areas that states should prioritize to help residents confront the looming economic downturn and position themselves for a successful recovery.
Improve program completion rates
In an era of constrained public and individual resources, it is even more important to ensure that investments in higher education yield the expected outcome. States should therefore focus resources and attention on improving program completion rates. States should strategically align funding in the students and programs that will benefit the most from it: lower-income students and programs that serve them. Efforts to support this include shifting funds from merit- to need-based financial aid (including supporting lower-income students beyond the direct costs of attendance) and prioritizing the funding of institutions serving the neediest students, as they will benefit the most from targeted investments. Especially in the case of higher education spending cuts, shielding students with the fewest financial resources can help ensure opportunities are equitably distributed and that more residents are prepared for the recovery.
State leaders can also help improve completion rates by addressing administrative inefficiencies, such as reconsidering remediation requirements and improving transfer credit articulation. To do so, state policymakers can provide directives to public institutions to use multiple measures to determine remediation placement and implement co-requisite remediation, both of which have been shown to improve student outcomes. Similarly, developing streamlined transfer pathways can improve time to degree and reduce the amount of individual and state resources wasted on redundant course taking. By enacting these types of changes state-wide, and engaging private institutions in the process, state leaders can help improve completion rates stymied by unnecessary administrative barriers.
Finally, states have a responsibility to ensure that students have access to high-quality postsecondary options and are not victimized by predatory institutions. The expansion of the for-profit college market during the last recession was accompanied by disproportionate earnings penalties for these same students. State authorization currently is used mainly to enforce bureaucratic compliance, but could be an incredibly powerful tool to assure program quality. Moreover, policymakers should take seriously the state responsibility to protect students as consumers. As the federal Department of Education has rolled back student protections, state policymakers and attorneys general can fill the gap to enact protective measures and hold predatory higher education providers accountable. Beyond scrutinizing providers and raising the bar for operating in a state, policymakers can differentiate access to state financial aid dollars based on programs’ records of quality training and providing clear, comprehensive, and accessible consumer information on those records of quality, state government can help guide students to the postsecondary options that will benefit them the most.
Reduce barriers for adult students to enroll in and complete college
In an economic downturn, adult students greatly benefit from attaining postsecondary training, credentials, and degrees. Yet, adult learners often face significant financial and procedural barriers to enrolling or returning to college, especially during a recession. States must respond by ensuring adult students have access to robust financial aid to cover tuition and fees, as well as unemployment insurance to offset lost wages. To further boost enrollment and completion, states should simplify the determination of aid eligibility and distribution and provide targeted support and advising. MaineSpark is an example of an effective program that connects returning students with financial aid resources, and also supports students in translating their educational experience into career options– an essential step in a constrained labor market.
The population with the greatest potential to earn a new credential are those with a shorter path to completion: individuals with some college but no degree. Targeted outreach and financial support for these students can provide a pathway as well as inform and motivate them to complete. As the majority of states now have longitudinal data systems, leveraging these systems to identify near-completers is a straightforward way to focus help on this population. Grad TX is an example of a targeted outreach program using the state’s strong data system. Survey results suggest this is an effective tool for increasing adults’ awareness of their educational options.
Students with some college and no degree may also face a situation where returning to school is difficult due to an unpaid balance at a previous institution. Unpaid balances often prevent students from re-enrolling in that institution or obtaining a transcript in order to transfer credits to a new institution, thus leaving the earned credits “stranded.” Targeted microgrants and advising can help students free these credits and complete their degree. The Warrior Way Back program at Wayne State University can serve as a model for state leaders seeking to reach out to non-completers and offer them a path back. For out-of-work adults, forgiving small unpaid balances may be the difference between retraining and prolonged unemployment. Policymakers can help support these programs financially or enact laws like California’s AB-1313, which bans colleges from withholding transcripts for unpaid balances.
A final way that states can help retrain adult learners is through the development and support of adult-focused institutions. Colleges such as Thomas Edison State in New Jersey and Charter Oak State in Connecticut provide customized online programs that recognize prior learning and put students on the shortest and most flexible path to a degree. Thomas Edison recently took additional measures to lower its tuition during the current economic difficulties. By providing affordable and flexible options for adults, those who need retraining can benefit from state support of these types of programs and institutions.
Invest in high-quality, shorter-term credentials
As an economic recession is likely to send adults back to higher education for upskilling, state leaders must consider the best ways to provide incremental training that will put these individuals back to work. Non-degree offerings are often shorter in length, making their completion more feasible for adults who may have competing demands. Moreover, these programs can deliver target training in a specific skill needed by a changing labor market. When embedded in longer degree programs, non-degree credentials can also encourage student persistence and ensure students who do stop out leave with a credential.
The problem is that the information on the value of non-degree programs, and the systems for assuring their quality, are nowhere near as robust as the systems in place for degree programs (which, as discussed above, themselves need improvement). Policymakers should take action to improve access to these programs and simultaneously work to ensure that students are getting value out of them.
Policymakers should mandate reporting from non-degree programs to their longitudinal data systems. Additionally, states can require non-degree programs to register with some sort of clearinghouse, such as Credential Engine, to further increase the transparency, comparability, and usability of this information. More and better data on all educational and training options in the state will allow policymakers to make informed decisions on how to invest in these programs and how to provide financial aid to students who enroll in them.
As with degree programs, it is also important that states leverage their regulatory authority to ensure quality in the market for non-degree credentials. By raising the bar for eligible training and provider lists (ETPL) and GI Bill state approvals, state governments can help ensure students do not fall prey to high-cost, low-value postsecondary providers.
The COVID-19 pandemic has put individual livelihoods as well as state budgets at risk. If the past is prologue, this will make public higher education more needed at the same time it becomes the balancing wheel for other state funding priorities. State policymakers should resist this urge and instead focus on supporting and improving higher education offerings in the state through this crisis. By ensuring postsecondary institutions are well positioned to provide affordable, quality education, policymakers can help their residents endure an economic downturn and prepare them for the jobs of the recovery.
- States are already cutting higher education budgets or freezing funds in response to the COVID-19 pandemic, with some preparing for the possibility of a larger loss of state revenue than during the Great Recession. ↑
- Since 2008, 39 states have seen a decrease in total higher education appropriations, with four reducing appropriations by more than one-third. Forty-one states decreased per FTE appropriations since 2008. Based on the authors’ calculations using data from the State Higher Education Executive Officers Association. ↑