by John Aubrey Douglass. CSHE 4.10 (February 2010)
PDF document (633 kB)Abstract: In the midst of the global recession, how have national governments viewed the role of higher education in their evolving strategies for economic recovery? Demand for higher education generally goes up during economic downturns. Which nations have proactively protected funding for their universities and colleges to help maintain access, to help retrain workers, and to mitigate unemployment rates? And which nations have simply made large funding cuts for higher education in light of the severe downturn in tax revenues? This essay provides a moment-in-time review of the fate of higher education among a number of OECD nations and other countries, with a particular focus on the United States, and on California – the largest state in terms of population and in the size of its economy. Preliminary indicators show that most nations are not resorting to uncoordinated and reactionary cutting of funding, and reductions in access in many regions, such as we see in the US. Their political leaders see higher education as a key to both short-term economic recovery and long-term competitiveness. Further, although this is speculative, it appears that many nations are using the economic downturn to actually accelerate reform policies, some intended to promote efficiencies, but most focused on improving the quality of their university sector and promoting innovation in their economies. One might postulate that the decisions made today and in reaction to the “Great Recession” by nations will likely accelerate global shifts in the race to develop human capital, with the US probably losing ground. The Obama administration’s first stimulus package mitigated dramatic state budget cuts to public services in 2009-10, but it was not enough to prevent universities and colleges laying off faculty and staff, reducing salaries and benefits, reducing course offerings that slow student progress towards a degree, and often reducing access. States have very limited ability to borrow funds for operating costs, making the federal government the last resort. In short, how state budgets go, so goes US higher education; whereas most national systems of higher education financing is tied to national budgets with an ability to borrow. Without the current stimulus funding, the impact on access and maintaining the health of America’s universities would have been even more devastating. But that money will be largely spent by the 2011 fiscal year (Oct 2010-Sept 2011), unless Congress and the White House renew funding support on a similar scale for states that are coping with projected large budget gaps. That now seems unlikely. The Obama administration announced its proposed 2011 budget in February, including $25 billion in state aid targeted for Medicaid. This is a modest contribution to states that face projected cumulative budget deficits of $142 billion in 2011, and there is uncertainty regarding the final federal budget. This is because Obama’s proposal will be debated and voted on in a Congress increasingly focused on stemming the tide of rising federal budget deficits. Without substantially more federal aid to state governments, many public colleges and universities will face another major round of budget cuts. There is the prospect that higher education degree rates in the US will dip in the near term, particularly in states like California that have substantially reduced access to higher education even as enrollment demand has gone up.
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