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DOUGLASS Higher Education Budgets and the Great Recession 2. access to help retrain workers and to mitigate unemployment rates And which nations have simply made large. cuts in funding for higher education in light of the severe downturn in tax revenues . This essay provides a brief 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 nation s largest state in terms of. population and in the size of its economy It is admittedly a limited moment in time analysis as the budget process of. nations is on going and changing shaped in part by the financial health of governments before the Great Recession . the pace of their current economic recovery and the priority of higher education and government reform efforts in the. political discourse , I have argued that expanding higher education funding and enrollment capacity may be as important as any other. policy lever to cope with the economic downturn including funding for infrastructure 1 A recent study into the financial. future of universities internationally by Moody s International Public Finance a credit rating and financial forecasting. company has also predicted that in most nations higher education will fare well in retaining revenues despite the. severity of the global recession due to their counter cyclical business aspects government support and growing. role in economic development and rebuilding 2 Yet there is growing evidence of a more nuanced story with the US. offering a contrast to much of the world in part reflecting the uneven severity of the recession on different. economies ,A simple set of observations , In short how state budgets go so goes US higher education whereas most national systems of higher education financing. are tied to national budgets with the ability to borrow and leading to different policy responses with most OECD nations. delaying budget cuts to higher education or in some instances actually increasing their investment and enrollment rates . Yet in those nations hit hardest by the Great Recession and usually with governments already with large deficits and more. vulnerable economies built on the housing bubble and consumer debt e g the US Ireland England Portugal there are. similar policy responses of significant cuts in higher education budgets although generally cuts appear smaller and delayed. in the EU and elsewhere when compared to the US , Over 75 percent of all students in the US attend public institutions controlled and largely funded by state. governments Most state and local governments in the US are in the midst of wholesale cutting of their higher. education budgets Feeling the effects of repeated budget cuts many multi campus public systems are capping or. reducing enrollment despite growing enrollment demand and raising tuition The Obama administration has initiated. a number of policies to help soften the blow to higher education including expanding the Direct Loan program . offering tax credits for tuition and providing stimulus funding to states to among other goals lessen severe cuts in. university and college budgets , Before Congress President Obama stated a broad national goal to increase educational attainment the first. president to do so In a speech in Michigan last July he reiterated his intention to elevate higher education in the. national discourse , Time and again when we have placed our bet for the future on education we have prospered as a result by.
tapping the incredible innovative and generative potential of a skilled American workforce That is what. happened when President Lincoln signed into law legislation creating the land grant colleges and not only. transformed higher education but also our economy That is what took place when President Roosevelt signed. the GI Bill which helped educate a generation and usher in an era of unprecedented prosperity That is why at. the start of my administration I set a goal for America by 2020 this nation will once again have the highest. 1 John Aubrey Douglass College vs Unemployment Expanding Access to Higher Education is the Smart Investment During Economic. Downturns CSHE Research and Occasional Paper Series CSHE 21 2008 a version published in InsideHE December 9 2008 . http cshe berkeley edu publications publications php id 324. 2 Moody s International Public Finance Global Recession and Universities Funding strains to keep up with rising demand June 2009 . CSHE Research Occasional Paper Series, DOUGLASS Higher Education Budgets and the Great Recession 3. proportion of college graduates in the world 3, But I fear the policies pursued thus far by the Obama administration are not enough Preliminary indicators show that. most nations are not resorting to uncoordinated and reactionary cutting of funding and reductions in access that we. see in the US Their political leaders see higher education as a key to both short term economic recovery and long . term competitiveness and often their own political viability particularly in nations with upcoming elections Further although. this is speculative it appears that many nations are using the economic downturn to actually accelerate reform. policies some intended to create 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 in this difficult. economic era will likely accelerate global shifts in the race to develop human capital with the US probably losing. further ground in bachelor degree production rates and similar gauges of educational attainment despite significant. efforts by the Obama administration to ease budget cuts to higher education systems and public universities . A ECONOMIC RECOVERY AND HIGHER EDUCATION, In forming a strategy to deal with the severe economic downturn President elect Obama and his evolving brain trust. of economic advisers apparently reflected on the largely successful and innovative efforts by federal and state. governments to avoid a projected steep post World War II recession in particular the key role given to higher. education , Beginning in earnest in 1944 many leaders in Washington and throughout the nation including President Roosevelt.
worried about a return to Depression era unemployment rates There are many reasons that the expected deep. recession eventually turned into the beginning of an economic boom in the US after the war including high saving. rates during the war resulting in unanticipated and pent up consumer demand But another reason was proactive. efforts to mitigate feared unemployment rates to support industries with growth potential and to fund yet another. round of infrastructure development and expansion of public services . One of the most important solutions to come out of that era of policymaking one that provides a guide for our present. predicament was large scale investment and innovative policies by both federal and state governments to promote. greater access to higher education The famed GI Bill for example . was not simply an effort to open new opportunities for deserving The unprecedented investment by the. returning veterans many of whom had delayed their education or federal government to provide grants for. needed new skills to enter the job market The unprecedented college had another important purpose to. investment by the federal government to provide grants for college reduce projected unemployment rolls and . had another important purpose to reduce projected unemployment at the same time help restructure the US. rolls and at the same time help restructure the US labor market by labor market by producing a more skilled. producing a more skilled labor force labor force , State governments acted as a partner in that macroeconomic strategy Under the leadership of Governor Earl. Warren for instance California markedly expanded the physical capacity of its public higher education systems by. establishing new campuses hiring new faculty eventually creating its own scholarship programs to supplant the GI. Bill and subsequently reaping tremendous economic and social benefits from such investment in human capital 4. The basic strategy of expanding funding for individuals to attend a college or university and to get a degree and. funding the expansion of higher education institutions has emerged internationally as a key component in national. debates over the route to economic recovery The overall educational attainment of a nation is in fact much more. 3 President Barack Obama remarks in Warren Michigan July 14 2009 White House Office of the Press Secretary . http www whitehouse gov the press office Excerpts of the Presidents remarks in Warren Michigan and fact sheet on the American . Graduation Initiative , 4 See John Aubrey Douglass Earl Warren s New Deal Post War Planning and Higher Education Journal of Policy History Vol 12 No 4 . 2000 http muse jhu edu login uri journals journal of policy history v012 12 4douglass html. CSHE Research Occasional Paper Series, DOUGLASS Higher Education Budgets and the Great Recession 4. important today than some sixty years ago Broad access is increasingly viewed as vital for socioeconomic mobility . and demand for higher education generally goes up during economic downturns Individuals who lose their jobs or. fear low prospects for employment in declining economies see a university or college degree as a means to better. employment prospects , And indeed as the recession progressed into 2009 enrollment demand in the US did go up dramatically particularly. in the public higher education sector where tuition costs are generally much lower than in the private independent. and for profit sectors Many students who planned to attend private or out of state public colleges have turned to. cheaper in state options usually community colleges Preliminary The surge in community college students. evidence based on a recent survey is that nationally the number of will not necessarily translate into higher. community college students is up approximately 11 4 percent in Fall degree attainment rates Attrition rates are. 2009 over fall 2008 and that many of these students are non very high among these two year. traditional over the age of 24 and increasingly enrolled full time 5 institutions with most student s enrolled. part time and many struggling with their, But there is also evidence that access to higher education is not finances In the end there will likely be.
keeping up with demand and that many state networks of public large disparities between the various. colleges and universities are not operating at full capacity because states in access and graduation rates . of large budget cuts The surge in community college students will with a potential downturn in actual degree. not necessarily translate into higher degree attainment rates production rates . Attrition rates are very high among these two year institutions with. most students enrolled part time and many struggling with their finances The true impact will not be known for a year. or so because of the lag in data collection In the end there will be large disparities between the various states in. access and graduation rates during and after the Great Recession with a potential downturn in actual degree. production rates ,B THE CAMPAIGN AND ITS AFTERMATH. During his presidential campaign Barack Obama outlined his plans for higher education repeatedly noting the. importance of raising educational attainment rates and improving the quality of education in the US Although the. progress of competitors in tertiary degree attainment rates including much of Europe has been steadily improving . while the US rates remain relatively stagnant with actual declines among younger students in big states like. California US political leaders have been largely ignorant of these important global trends Reflecting a continued. political culture of isolationism in which national pride and self absorption continue to dominate US policymakers . and even higher education leaders have not been much interested in growing data and higher education reform. efforts for good and bad in Europe and elsewhere 6. While his rhetoric on the value of, Obama and his campaign team however took note of these shifts education was not particularly unique . and growing concerns of the financial viability of state governments Obama has elevated the national. to fund their public higher education institutions At current rates of discourse on access to higher education. participation in higher education and more significantly low degree and has subsequently pursued a relatively. production rates one study has projected that the United States detailed set of policies . may face a shortage of 14 million workers with college level skills by. 2020 Twenty two of the 30 fastest growing career fields require some postsecondary education yet two thirds of. young adults from poor families do not get a college education and about half of all students who enroll in a. bachelor s degree program do not get their degree by the age of 29 7. 5 According to a February 2010 report by the State Higher Education Officers association SHEEO nationally higher education enrollment in. the US grew by 3 4 percent from 2007 08 to 2008 09 the beginning stage of the Great Recession and there are signs of increased access . Chris Curran and Maria Slowey Ireland Roger Brown and Gareth Parry England UK This is a March 10 2010 updated version of this essay originally posted in February 2010 DOUGLASS Higher Education Budgets and the Great Recession 2 CSHE R esarch amp Oc ionlPapr Sri access to help retrain workers and to mitigate unemployment rates And which nations have simply made large cuts in funding for

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