The State of Higher Education

Type ‘What’s wrong with higher education?’ into your favorite search engine and you will find scores of articles on the subject. The articles cover a variety of concerns and analyses, with many drawing the conclusion higher education just doesn’t work like it used to.

In simplest terms, that’s true. Higher education is different. Public colleges and universities rely primarily on tuition, state and federal funding and philanthropic support to operate. This funding structure and enrollment numbers have changed significantly over the last several decades, and as a result, colleges and universities have been in a process of evolution.

The growth years

From the close of World War II through the end of the 1970s, higher education experienced a boom in state and federal funding.

This was initially sparked by the high number of returning WWII soldiers utilizing the GI Bill. Then, the Baby Boomer generation, at the time the largest generational group in U.S. history, came of age, producing an enormous demographic uptick in degree-seeking students. Enrollments also swelled because of an increase in women attending college and the draft deferment option during the Vietnam War.

To both address and encourage college enrollment, government support increased. Prompted by the Russian launch of Sputnik, the United States passed the 1958 National Defense Education Act, which introduced grants and subsidized loans for college students. This was followed by the 1965 Higher Education Act, which further increased federal funding of higher education and created the Pell Grant and Stafford Loan programs.

Between fiscal years 1960 and 1970, states increased appropriations for higher education operating expenses by over 336%, according to the summer of 2015 issue of the Journal of Education Finance. These funds covered the majority of operational needs for colleges and universities. Because of this funding, it was possible to keep tuition low for students. Philanthropic support aided some students and schools but didn’t yet play a significant role for most public institutions.

During this same time, enrollments skyrocketed around the nation. From 1945 to 1960, undergraduate enrollment increased by 45% and then doubled again by 1970, as reported by Inside Higher Ed.

Shifting sands and a pivotal event with lasting implications

Starting in the 1980s, government support continued, but at a slower rate of 106%. Enrollment increased at a more modest 14%. Early in the 1990s, a recession triggered the first-ever decline in state funding, but by fiscal year 2000, it was up 45% for the decade, per the Journal of Education Finance.

This slow shift to funding, and the resulting adaptation process for higher education, might have continued at a steady pace. But monumental changes came in 2008 with the Great Recession. The impacts were devastating across the economy, resulting in massive layoffs and slashed budgets for states. Across the country, states made historic cuts to funding of higher education. Schools were forced to raise tuition to cover the operational shortfalls.

The Great Recession also triggered a surge in enrollment. This increase was fueled by a demographically large generation, the Millennials, and the high number of unemployed seeking more education or a career change to improve their employment opportunities. It was a challenging time for schools to operate. The hope was that once the economy recovered, things would return to normal.

But even after the recession ended, state funding was not restored to pre-recession levels. According to the Center on Budget and Policy Priorities, Kansas funding per student declined by 23.8%, adjusted for inflation, between 2008 and 2017. As a result, colleges and universities had to cut budgets and raise tuition to cover shortfalls. Although the tuition burden on students increased, for Kansas schools there were limitations on what tuition increases were allowed by the state and governing body, Kansas Board of Regents (KBOR). There were also limits to what would be feasible for students to pay.

Where things stand today and what lies ahead

Since 1980, the nationwide average cost at 4-year colleges has increased by more than 180%, according to the National Center for Education Statistics. Keeping tuition affordable has been a priority for Kansas colleges. In spite of that, the increases that have occurred are still a challenge for many students. Students are increasingly reliant on financial aid, scholarships and student loans to make attending college a possibility, with many resorting to loans from private lenders with higher interest rates.

Data from the Institute of Education Sciences Report on the Condition of Education 2022 finds student enrollment has been in decline since 2011, following the short surge caused by the Great Recession. Due to the growth of online degree programs, many of the enrolled students never set foot on campus, which means smaller numbers of students have been paying for oncampus food and housing services.

The economic difficulties of the Great Recession had another effect that will challenge higher education soon. Between 2008 and 2013, 2.3 million fewer babies were born. This contraction in births will result in what is referred to as the demographic cliff. Put simply, beginning in 2025 the number of students graduating high school is projected to decline by 15%, according to The Hechinger Report. This will make future efforts to recruit students for college more competitive than ever before.

Adapting and evolving – why it matters

These challenges are not insurmountable, but they do require serious attention and adaptation. It is essential that schools like Emporia State University continue to provide an affordable and accessible opportunity for students to pursue a degree.

Spurred by low unemployment, some high school graduates are questioning whether college is even necessary. College may not suit everyone, but for many, it is a life-changing choice. According to the U.S. Bureau of Labor Statistics, people with bachelor’s degrees on average earn almost 40% more than those with only a high school diploma and have a lower rate of unemployment. This was demonstrated during the COVID-19 outbreak. In June 2020, 6.8% of college graduates were unemployed compared to 12.2% of high school graduates, per the Pew Research Center.

Further declines in college graduates will impact more than each individual student’s life, it will impact the entire economy. Even before the pandemic, the United States was facing a shortage of 9 million college-educated workers, and this shortage is only growing. Without sufficient graduates to meet the workforce’s needs, for example in fields like healthcare and education, the effects will be felt by all of society.

The benefits institutions like Emporia State deliver are economic mobility for the individual and economic return for society. ESU graduates provide stability to the workforce and help attract and retain businesses to Kansas because 80% of our graduates stay and work in the state.

Emporia State has been focused on evaluating every facet of our financial and structural operations, not shying away from sometimes very difficult decisions, all for the purpose of serving students today, tomorrow and for the foreseeable future.

ESU is investing in the programs students want and the workforce needs. The university is committed to helping prospective students understand the lifelong benefits of earning a degree, making pursuing a degree at ESU affordable and attainable and giving students enrolled at ESU all the tools they need to graduate ready to work in their field and with employment opportunities in place.