V. Global and national trends in higher education and new directions in higher education policies will affect the University system in the coming decade.
OECD (Organisation for Economic Co-operations and Development), Higher Education to 2030:
“Higher education drives and is in turn driven by globalization. It trains the highly skilled workers and contributes to the research base and capacity for innovation, which determine competitiveness in the knowledge-based global economy. It facilitates international collaboration and cross-cultural exchange. Cross-border flows of ideas, students, faculty, and financing, coupled with developments in information and communication technology, are changing the environment where higher education institutions function. Cooperation and competition are intensifying simultaneously under the growing influence of market forces and the emergence of new players.” xxxi
In European higher education, the Bologna Process (the term designating EU intergovernmental cooperation in higher education) has initiated reforms aimed at increasing global competitiveness through regional cooperation, providing an interesting example for other regions. While this has already led to some convergence of degree structures and to common frameworks for quality assurance and qualifications, the emergence of a fully integrated European higher education system is not yet in sight.
Public expenditure on higher education per student will decline globally, as pressure on provision of social services — from aging populations and shrinking revenue bases — increases. More of the cost is being pushed to students and institutions. As public funds become more limited, pressures for increased accountability will grow.
Today some 30% of global higher education enrollment is private. On average, the growth of private higher education and research funding has been faster than that of public funding in the OECD area, although in the majority of OECD countries higher education is still largely funded publicly. In general, the private sector is “demand absorbing,” offering access to students who might not be qualified for the public institutions.
Legally for-profit institutions constitute a small higher education sub-sector, but there is notable growth in all developing regions. The sector is run on a business model, with power and authority concentrated in boards and chief executives; faculty hold little authority and students are seen as consumers. A related trend is the “privatization” of public universities: countries such as Australia, the U.K, and China have been explicit in asking universities to earn more of their operating expenses by generating their own revenue — from tuition fees, but also from research, sale of university-related products, and university-industry linkages.
The need to respond to “massification” has caused the average qualification for academics in many countries to decline. Philip Altbach and his associates estimate that up to half of the world’s university teachers have only earned a bachelor’s degree.
The overall emphasis on quality assurance has started to move towards assessing educational and labor market outcomes instead of inputs, but there are still notable differences between audit and evaluation approaches across regions. At the same time, one can observe the emergence of cross-border accreditation and a general strengthening of cooperation across borders; several regional networks of quality assurance agencies have been established and there is an increasing interest in establishing common regional criteria and methodologies, particularly in Europe Transnational higher education — the delivery of higher education programs by a provider across national boundaries by physical or electronic means — is an increasing feature of global higher education, often spurred by lack of local capacity, desire to raise local quality and access, and revenue needs of the overseas provider. Delivery models vary from offshore campuses to franchising of a program to a partner or third party. Partnership models include twinning programs, joint degrees, credit transfer agreements, and preparatory programs. International partnerships, formerly concentrated on student exchange, are now much more comprehensive.
Although the U.S., Canada, and Australia currently have a large share of the global higher education student market, other Pacific Rim Countries — notably Japan, Hong Kong, South Korea, Singapore, and China — have a national strategy and funding to increase their number of “world class” universities.
While total undergraduate enrollment in U.S. post-secondary institutions increased by 37 percent between 2000 and 2010 (from 13.2 million to 18.1 million students), enrollment decreased by 7 percent between 2010 and 2017 (from 18.1 million to 16.8 million students). Undergraduate enrollment is projected by NCES to increase by three percent (from 16.8 million to 17.2 million students) between 2017 and 2028.
The projected increase in enrollment could, of course, fail to materialize now that the U.S. economy has entered another recession and uncertainty about the economy abounds. Changes in college enrollment during the Great Recession were consistent with research showing that economic contractions lead individuals to enroll in school to obtain additional training. During economic contractions, attending college becomes a more attractive option for some people as the worsening labor market reduces the amount of potential earnings foregone in order to obtain additional education. A study by the U.S. Census Bureau reports that among those not enrolled in school in the prior year, and therefore likely engaged in the labor market, there was an increase in enrollment during the recession and a return to prerecession levels of enrollment by 2015. xxxii
The overall decline from 2018 was 1.7% (roughly 300,000 students). Enrollment at two-year colleges declined 3.4%, while four-year public colleges lost just under 1%. (Four-year private institutions bucked the trend, growing 3.2%, though much of this increase was due to the conversion of large for-profit institutions to nonprofit status.) Nationally, enrollment of graduate students has grown, but not nearly enough to offset the drop in undergraduate enrollments.
States with the largest decrease in student enrollment numbers in 2019 were Florida, California, Illinois, Michigan, and Pennsylvania in that order. Alaska, Florida, Illinois, North Dakota, Hawaiʻi, and Kansas had the largest percentage declines. xxxiii
One factor in the enrollment decline has been the decreasing affordability of higher education, as a higher proportion of the cost of attendance has been shifted to the student. According to the College Board, at public four-year colleges net tuition per student has doubled over the past twenty years, from $1,870 in 1998-99 to $3,740 in 2018-19 (in constant 2018 dollars).
Some U.S. state public systems have sought to address the twin challenges of falling enrollments and declining state expenditures — exacerbated by the pandemic — by considering some form of consolidation of campuses in the system. Citing examples from several states (Alaska, Connecticut, Georgia, Maine, Pennsylvania, Vermont, and Wisconsin) a recent article in The Chronicle of Higher Education examines several variations of the effort to use consolidation of campuses within public higher education systems as a way to address under-enrollment at certain campuses or, more generally, to cut expenses in the public higher education sector. The author concludes that savings do not always result. But he cites authorities on public systems who expect the trend to continue:
“With the pandemic putting enrollments further in doubt and sucking away state revenues, and therefore state support for higher education, says Thomas L. Harnisch, vice president for government relations at the State Higher Education Executive Officers Association, ‘COVID-19 could very well accelerate the trend toward making structural changes to these colleges.’ Structural change is probably what needs to happen, says Aims C. McGuinness, a senior fellow with the National Center for Higher Education Management Systems. Considering widespread demographic declines and waning state support, he says, ‘virtually every state has got to think more systemically.’” xxxiv
In the U.S. the inflation-adjusted average state appropriations per full-time student fell from $9,290 per student in 1998 to $7,900 in 2018, causing the revenue from tuition to increase to 47% of the public institution budgets compared to 31% a quarter-century ago. Yet another factor in declining enrollments, especially for adult students in community colleges, was the growth of employment and consequent increase in job opportunities that marked the recovery from the Great Recession.
For a second year in a row, Moody’s in 2019 issued a negative outlook for higher education, as operating expenses grew faster than revenue. The charts below show state-by-state comparisons of changes in state spending per student and percent change in average tuition at public four-year colleges.
Notably, Hawaiʻi had one of the lowest decreases in per-student funding by the state in the 2008-17 decade. However, its increase in average tuition, at 79.7%, was third highest in the nation. And, in fiscal year 2019-20, Hawaiʻi was on the other end of the ledger, as one of only three states that cut appropriations to higher education (by 2.2%, as compared to an average increase of state appropriations of five percent). xxxv
| State | Percent change | ||||
|---|---|---|---|---|---|
| Arizona | -53.8% | ||||
| Louisiana | -44.9% | ||||
| Illinois | -36.9% | ||||
| Pennsylvania | -34.2% | ||||
| Alabama | -34.1% | ||||
| Oklahoma | -34.0% | ||||
| South Carolina | -33.6% | ||||
| New Mexico | -32.7% | ||||
| Delaware | -27.1% | ||||
| Kentucky | -26.4% | ||||
| Nevada | -26.4% | ||||
| New Hampshire | -26.3% | ||||
| Kansas | -23.8% | ||||
| West Virginia | -22.4% | ||||
| Iowa | -22.3% | ||||
| Mississippi | -22.1% | ||||
| New Jersey | -21.3% | ||||
| Missouri | -20.9% | ||||
| Florida | -19.1% | ||||
| Idaho | -18.6% | ||||
| Texas | -17.7% | ||||
| Oregon | -16.4% | ||||
| Michigan | -16.3% | ||||
| Rhode Island | -16.1% | ||||
| North Carolina | -15.9% | ||||
| Ohio | -15.2% | ||||
| Georgia | -15.0% | ||||
| Washington | -15.0% | ||||
| Vermont | -14.3% | ||||
| Tennessee | -13.9% | ||||
| Virginia | -13.8% | ||||
| Minnesota | -12.6% | ||||
| Connecticut | -12.6% | ||||
| Massachusetts | -12.5% | ||||
| Utah | -11.2% | ||||
| South Dakota | -8.2% | ||||
| Colorado | -7.8% | ||||
| Arkansas | -7.2% | ||||
| Alaska | -4.7% | ||||
| Hawaiʻi | -3.2% | ||||
| California | -3.1% | ||||
| New York | -2.0% | ||||
| Maine | -1.2% | ||||
| Maryland | -0.4% | ||||
| Indiana | 0.2% | ||||
| Nebraska | 0.21% | ||||
| Montana | 5.1% | ||||
| Wyoming | 10.9% | ||||
| North Dakota | 37.8% |
| State | Percent change |
|---|---|
| Louisiana | 105.4% |
| Arizona | 91.3% |
| Hawaiʻi | 79.7% |
| Georgia | 73.4% |
| Alabama | 69.8% |
| Colorado | 68.0% |
| California | 65.4% |
| Florida | 58.9% |
| Nevada | 55.8% |
| Virginia | 54.7% |
| Tennessee | 54.3% |
| West Virginia | 51.4% |
| Oregon | 47.3% |
| North Carolina | 45.0% |
| Oklahoma | 43.3% |
| Rhode Island | 43.2% |
| Alaska | 42.2% |
| Mississippi | 42.0% |
| Utah | 41.5% |
| New Hampshire | 40.2% |
| Idaho | 39.9% |
| Kentucky | 38.8% |
| Conneticutt | 38.4% |
| New Mexico | 37.8% |
| Massachusetts | 36.5% |
| Kansas | 35.8% |
| Washington | 33.9% |
| South Dakota | 33.7% |
| Delaware | 32.9% |
| New York | 32.3% |
| Vermont | 29.4% |
| Arkansas | 29.2% |
| Texas | 29.0% |
| Michigan | 28.7% |
| South Carolina | 27.5% |
| Nebraska | 25.3% |
| Pennsylvania | 24.7% |
| Wyoming | 24.2% |
| Minnesota | 22.6% |
| North Dakota | 19.5% |
| Iowa | 19.1% |
| Wisconsin | 18.2% |
| New Jersey | 17.6% |
| Indiana | 15.2% |
| Maine | 14.9% |
| Maryland | 10.7% |
| Montana | 10.2% |
| Missouri | 9.7% |
| Ohio | 5.0% |
Note: Illinois was excluded because the data necessary to make a valid comparison are not available. Since enrollment data are only available through the 2016-17 school year, we have estimated enrollment for the 2017-18 school year using data from past years.
Source: Center on Budget and Policy Priorities (www.cbpp.org) CBPP calculations using the "Grapevine· higher education appropriations data from Illinois State University, enrollment and combined state and local funding data from the State Higher Education Executive Officers Association and the Consumer Price Index, published by the Bureau of Labor Statistics.
The U.S. formerly ranked first in the world in the proportion of its 25-34-year-old population with a four-year degree or higher; it now ranks #18. The Census Bureau’s American Community Survey for 2013-17 estimated that 13% of Americans over 25 years old do not have a high school degree; 27% have a high school diploma or GED; 21% have some college but no degree. Adults with a higher education degree total 39% of the population — 8% with an associate degree, 19% with a bachelor’s degree, and 12% with a graduate degree. While 35% of white adults hold a bachelor’s degree or higher, only 18% of underrepresented adults do. And overall, just 8% of bachelor’s degree holders live in rural counties. xxxvi
Most of the post-2002 increase in U.S. natural science and engineering (NS&E) doctorate production reflects degrees awarded to temporary and permanent visa holders. Foreign nationals earned more than half of U.S. doctorates in engineering, mathematics, and computer science in 2016.
Regulation of higher education in the U.S. has traditionally been primarily a matter for state governments, but the balance may be shifting. Congressional hearings in 2010 that focused on for-profit higher education institutions prodded the U.S. Department of Education to issue new regulations responding to certain alleged abuses in this sector. At the time the for-profit institutions enrolled 12% of students in higher education, but these students represented 26% of all federal student loans and 46% of all student loan dollars in default. The new USDOE regulations, however, applied not only to the proprietary institutions but also, in most cases, to private not-for-profit and public institutions as well.
Several of the new regulations, which took effect on July 1, 2011, applied to “program integrity.” Institutions were required to show their accreditors that students receiving federal financial aid measured in semester credit hours were getting the equivalent of a “Carnegie unit” (two hours work out of class for every hour in class, over a 15-week period) for each credit hour. There were also requirements that institutions offering distance learning have authorization from all the home states of enrolled students.
These provisions proved especially controversial and were struck down by federal court order in 2011, sending the Department and higher education lobbyists back to the negotiating table. A new “final” version was issued by the Obama administration in its waning weeks, scheduled to take effect in July 2018. In the intervening months, though, the Trump administration took a much more skeptical stance on many higher education regulations, identifying state authorization as one target. In June 2018, the Department of Education announced that it would delay issuing regulations for two more years while it negotiated with the American Council on Education and other lobbying groups. Such “program integrity” regulations governing eligibility for federal student aid and institutional accreditation have relied on traditional concepts of student participation in “full time instruction,” thus limiting the ability to expand innovative models of distance education.
In April 2020, the U.S. Department of Education announced that it would propose changes to distance education regulations that promised to result in a loosening of these limitations. These would amend the definitions of “clock hour” and “credit hour” to provide flexibility to distance education and other types of educational programs that emphasize demonstration of learning rather than seat time when measuring student outcomes. In addition, the definition of “academic engagement” would be expanded to include active participation by a student in activities “such as an online course with an opportunity for interaction or an interactive tutorial, webinar, or other interactive computer-assisted instruction. Such interaction could include the use of artificial intelligence or other adaptive learning tools so that the student is receiving feedback from technology-mediated instruction.” These changes in federal regulations will also likely be followed by additional changes in regulation set by regional accrediting agencies. xxxvii
Another set of new rules addressed “gainful employment,” and applied to not only for-profit institutions but also to private not-for-profit and public institutions that offer certificate programs. These institutions would be denied federal financial aid for students if they offered career-oriented programs where large numbers of graduates failed to earn enough to pay back their student loans. Though never fully enforced, these rules played a role in the closure of several of the worst offenders in the for-profit education industry. Since 2010 nearly half of the for-profit programs have closed and the student population in for-profit schools has declined by 1.6 million. In 2015 two of the largest firms, ITT Tech and Corinthian Colleges, collapsed. In June 2018, the Department of Education announced that it would delay implementing the strictest accountability measures, opting instead to publicize on its “College Scoreboard” the information on the earnings and debt prospects of particular programs.
The federal government continues to play a large and increased role in student financial aid, but in recent years inflation-adjusted spending on both grants and loans decreased. While the number of Pell Grant recipients increased from 4 million in 1992-93 to 8.8 million in 2012-13, the number has since dropped to 6.8 million (a decline of 28% in eight years). This is partially accounted for by the 12% drop in the population of undergraduate students in the same period.
| Year | 12-Month Undergraduate Headcount Enrollment (in Millions) | % Pell Recipients |
|---|---|---|
| 2008-09 | 23.2 | 26% |
| 2009-10 | 24.7 | 33% |
| 2010-11 | 25.2 | 37% |
| 2011-12 | 24.8 | 38% |
| 2012-13 | 24.1 | 37% |
| 2013-14 | 23.6 | 37% |
| 2014-15 | 23.2 | 36% |
| 2015-16 | 22.7 | 34% |
| 2016-17 | 22.5 | 32% |
| 2017-18 | 22.2 | 32% |
| 2018-19 | 21.9 | 31% |
Notes: IPEDS headcount enrollments are adjusted for the difference between total headcount, which counts students more than once if they are enrolled in more than one institution at the same time, and unduplicated headcount reported by the National Student Clearinghouse (NSC). Twelve-month undergraduate headcount for 2017-18 and 2018-19 is estimated from NSC data.
Source: NCES, IPEDS 12-month enrollment data; National Student Clearinghouse, Current Term Enrollment Estimates: Spring 2019; U.S. Department of Education, Federal Pell Grant Program End-of-Year Report 2017-18; U.S. Department of Education, Federal Student Aid Data Center, Title IV Program Volume Reports and Aid Recipients Summary; calculations by the authors.
Federal spending on Pell Grants since 2000 has amounted to about $400 billion and now averages about $30 billion a year. The maximum grant in 2019-20 (for which fewer than one in three is eligible) is $6,195, while the average actually awarded in the prior year was $4,160.
College costs have continued to rise as the size of the Pell Grant declines, however. The maximum Pell Grant covered 87% of average public four-year tuition and fees in 2003-04 but only 59% in 2013-14. (It covers only 17% of average tuition and fees at private four-year institutions.) Whereas public college tuition and fees have risen an average of 2% per year in the past decade, the maximum Pell award, adjusted for inflation, has fallen 0.3% annually in the same period. In an effort to curb the burden on students posed by the rising costs of textbooks and other learning materials, a significant number of universities, including the University of Hawai'i system, have joined in the movement to develop and promote open educational resources (OERs), which assist faculty in improving the quality, currency and accessibility of learning materials. xxxviii
Timely reauthorization of the federal Higher Education Act that since 1965 has governed student aid and many other matters has been a victim of the partisan gridlock in Congress. A newly authorized version was due after 2013, but disputes over many issues, including regulation of distance education and of the extent of Title IX requirements, have been especially intense.
| Year | Maximum Pell Grant | Public Four-Year Tuition and Fees | Public Four-Year Tuition and Fees and Room and Board | Private Nonprofit Four-Year Tuition and Fees | Private Nonprofit Four-Year Tuition and Fees and Room and Board |
|---|---|---|---|---|---|
| 99-00 | $4,810 | $5,170 | $12,440 | $23,890 | $33,060 |
| 09-10 | $6,375 | $8,420 | $18,160 | $30,670 | $41,780 |
| 19-20 | $6,195 | $10,440 | $21,950 | $36,880 | $49,870 |
Source: College Board, Trends in College Pricing 2019, Table 2 online; US Department of Education, Federal Student Aid Data Center
While state-operating support is being cut back, limits are being imposed on enrollment at many state colleges and universities, especially in the Western states. Eleven states capped enrollment at their public flagship universities at some point during the last decade, including four of the five largest states. California was the only state to limit even community college enrollment. Throughout California institutions, thousands of students have been denied classes due to fiscal limitations, often prolonging the time to attainment of the degree. This may increase receptivity of California high school graduates to the prospect of out-of-state study.
Some states have imposed caps on enrollment of out-of-state students in their public colleges. The cap is 10% in Florida and 18% in North Carolina. In contrast, at the University of Hawaiʻi the out-of-state enrollment in 2017 (officially capped at 35% for undergraduates at four-year campuses and 15% at two-year colleges) was 37% of the student body at Mānoa and 31% at Hilo. On the other hand, some regions — including the Midwest, New England, Southern, and Western regions — have formed consortia that allow tuition of out-of-state students for most programs at their public institutions to be capped at 150% of the in-state rate.
Numerous states have sought to deal with the affordability issue at their public campuses through variants of “promise programs” (which usually tie state aid to academic performance) or even plans for “free tuition.” The most ambitious is New York’s Excelsior Scholarship, phasing in between 2017 and 2020, which waives tuition for SUNY or CUNY students from households earning less than $125,000 per year who take at least 30 credits per year and commit to live and work in the state for at least as many years as they are supported by the scholarship. (The amount of tuition supported is net of Pell or similar awards.) The program is expected to support almost one million students by 2020. (Hawaiʻi’s Promise program currently applies only to the two-year colleges). Tennessee was the first state to offer tuition-free community college enrollment. In 2015 President Obama proposed a national program of “free community college.” (Such plans usually do not cover the costs of attendance beyond tuition and fees.)
“Free [public] college for all” proposals were a staple of recent presidential campaign platforms of Democratic candidates, beginning with Bernie Sanders (and then Hillary Clinton) in 2016. Senators Sanders and Elizabeth Warren had versions of this proposal in their 2020 platforms, and Warren went further with a sweeping proposal for student debt relief. Critics of these plans express concern not only about the enormous cost but also about their impact on enrollments in private colleges and the disproportionate benefit they offer to more affluent students. xxxix
The issue of debt from student loans has drawn the attention not only of education reformers but analysts of the nation’s long-term financial health. The Board of Governors of the Federal Reserve System estimated in 2019 that the total student loan indebtedness from federal and private sources exceeded $1.6 trillion. An estimated 65% of the graduating class of 2018 left with debt, averaging $29,200. (2018 graduates of Medical Schools had average indebtedness of $196,520, Pharmacy School graduates $166,528, and Dental School, $285,184.)
Although average student debt of graduates of the University of Hawai'i ($24,539 for 2018 graduates at UH-Mānoa) is much lower than the national average ($28,566), it has been creeping upwards. Analysts of student loan debt in the U.S. have expressed alarm not only at its enormous size but also its harmful social and economic effects, especially when combined with slow wage growth in the years since the Great Recession. Studies have shown that the debt burden has caused delays of marriage and formation of families, reluctance to start or grow small businesses, inability to finance home ownership, and erosion of household net worth. xl
An innovative program called “Know More, Borrow Less,” has been established by the University System of Georgia, to enhance the financial literacy of students and help encourage the reduction of student debt. Components of the program include “streamlining the federal student aid process; providing timely, accurate information regarding college costs and student debt; educating students and families about sound borrowing principles, including borrowing what is necessary rather than the maximum amount offered; and helping students understand monthly debt payments upon graduation.” xli
U.S. households with student loan indebtedness owed, on average, more than $47,000. The U.S. Department of Education owns 92% of student loans. There are various plans for repayment, including deferral and forbearance as well as income-contingent plans, but 5.2 million of the federal loans are currently in default. xlii Often the same politicians who are calling for “free college for all” are also presenting proposals for forgiveness of student debt.
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