Policy

Report: Time for Feds to Work with States on Stabilizing Higher Ed

• By Dian Schaffhauser
• 07/20/20

The feds need to step up and help bail out higher education in the coming recession. Otherwise, college will be off the table for many students and families. That's the bottom line, according to William Doyle, a professor of higher education and public policy at Vanderbilt University, writing on Third Way. Doyle, along with a colleague, has studied patterns in state spending for higher education compared with other state expenditures going back 40 years, with an emphasis on how cuts during recessions are related to increases during economic recoveries.

The essay is one of several included in "ACADEMIX Upshot," a series intended to help lawmakers understand how their decisions will affect student outcomes and college and university behavior through the pandemic and beyond. Third Way is a think tank that "champions modern center-left ideas."

According to Doyle, when economic downturns hit, states shrink higher ed budgets, and colleges bump up tuition costs in response. "While these strategies have allowed states and college systems to limp through past downturns," he wrote, "it's very likely that this approach will not work in the coming recession."

The reasons? States will see "precipitous" drops in tax revenue even as demands grow for help in health care and public assistance. Schools are expected to see fewer students, not more; as a result, they'll need to consider raising tuition and cutting financial aid, to address declines in enrollment and tuition revenue. That budget shortfall is compounded by a dramatic shrinkage of bonus dollars coming in from out-of-state students and international students.

A federal-state program could provide the bridge needed to cover the gap, enabling students to attend college while "stabilizing revenues" for the institutions of higher ed, Doyle suggested.

The time for this "is now," he wrote. "At a bare minimum, state policymakers and institutional leaders should commit to no increases in tuition at public colleges and no cuts in need-based financial aid in the coming 2020-21 academic year, conditional on the federal government providing needed assistance .... In a time of significant financial turbulence, the federal government can step in and provide funding to ensure that students can afford to attend college. State policymakers, along with institutional leaders, should join together to call on the federal government for a joint federal-state partnership for higher education."

The complete essay is available on the Third Way website.