|
|
|
The views expressed on this page are
solely
those of the author and do not
necessarily represent the views of County
News Online
|
 |
The Hechinger Report
How the last recession affected higher education. Will history repeat?
Community college enrollment surged after the 2008 downturn
By Jill Barshay
April 8, 2020
One of the peculiar things about higher education is that it runs in
the opposite direction of the economy. When the economy stalls, demand
for college typically rises as the unemployed decide to go back to
school to improve their job prospects. Since it seems near certain that
the coronavirus pandemic is triggering a new recession right now, I
thought it would be useful to recap what happened to colleges and
universities during the Great Recession of 2008 to help us think
through what might and might not repeat this time around.
The number of students who enrolled in college jumped by almost 2.5
million, or nearly 16 percent, from 15.6 million undergraduate students
in the fall of 2007 to a peak of 18.1 million students in the fall of
2010. Most of the increase was driven by older adults, according to
Doug Shapiro, executive research director of the National Student
Clearinghouse Research Center, rather than typical college-age students
who had recently graduated from high school. These older adults tended
to enroll in two-year community colleges and for-profit online schools,
such as University of Phoenix.
The back-to-school rush didn’t happen right away. There was a long
18-month lag. First, workers were laid off. Then, they exhausted their
unemployment benefits. “When the reality sets in that they’re not going
to find another job, then they start thinking about school,” Shapiro
said. “And by the time they get through the whole process of finding a
school and getting into a school, a year and a half to two years has
gone by.”
Federal policy encouraged Americans to go to school during the last
recession. The 2009 Recovery Act increased the amount of Pell Grants to
low-income students to more than $5,000 per year and expanded the
number of students who were eligible for it.
“The federal government invested a lot of money in new students,” said Shapiro.
Ironically, funding for education plummeted. States didn’t have money
and they cut funds to public colleges just as enrollments surged.
“Funding per student was a disaster,” said Sandy Baum, a senior fellow
at the Urban Institute. “We’ve seen it recover very slowly but it’s
still lower than what it was before the recession.”
Budget cuts forced public institutions to raise tuition. Even after
Pell and other grants, inflation-adjusted tuition at public four-year
colleges and universities rose 19 percent from 2006 to 2012. Students
took out loans to pay it.
Legislation raised the amounts that students could borrow in 2007 and
again in 2008. Student loans soared from $110 billion a year in 2007 to
$132 billion a year in 2010 — an historic record for annual college
borrowing. That was also the year that student loan debt surpassed
credit card debt.
Then, as the economy created jobs, many returned to work without
degrees. Completion rates declined for students who enrolled in college
during 2008, 2009 and 2010. Only 39 percent of the students who
enrolled in a two-year institution in 2008 had a degree six years
later, according to the National Student Clearinghouse. Total
associate degrees awarded rose initially as the recession first hit,
from 750,000 a year in 2007-08 to more than one million a year in
2011-12, but they did not rise any further. One might have expected
them to increase as students had more years to complete their degrees.
This strikes me as a sad outcome. There was a well-intended effort by
policy makers to use the recession to invest in Americans’ education.
But instead we underfunded the sector as we steered people toward it.
Some benefited but too many Americans ended up saddled in debt without
degrees.
But if the recession lasts longer, public policy isn’t yet creating new
incentives for people to return to college. There are no provisions in
the 2020 relief package to increase grants or loans for future
students. Most of the higher education relief is to help current
students stay in school or help former students with their loan
payments.
We’re already seeing states from Missouri to New Jersey cut funding for
public colleges and universities because they don’t have the money.
That’s potentially setting the stage for tuition hikes. “Here we go
again,” said Baum.
Another big difference is the context leading up to the recessions.
Before 2008, there were years of rising college enrollment as
policymakers urged more high school graduates to get an education.
Ahead of this recession, enrollment has been declining in many regions
of the country. A nationwide decline in the college age population is
predicted for the years ahead.
If the unemployed do decide to return to school, established online
universities are likely to be the big beneficiaries, both Shapiro and
Baum predicted. During the last recession, online education was
dominated by for-profit universities. But since then, nonprofit private
and public institutions, such as the Southern New Hampshire University
and Arizona State University, have built their online platforms and
marketing arms to become big national players.
Last month, Moody’s Investors Service lowered its outlook for the whole
higher education sector to “negative” from “stable.” Moody’s is worried
that international students won’t be returning to U.S. campuses in the
fall and that many domestic students won’t enroll now that colleges are
delaying and canceling events for accepted students.
The big wildcard is whether students will be able or willing to return
to physical and residential campuses in the fall. “If they don’t,” said
Baum, “I think we’re going to have a whole set of issues that
we’ve never dealt with before.”
|
|
|
|
