Higher Ed Budget Crunch Echoes a History We Can’t Afford to Repeat

Writer and philosopher George Santayana famously said that those who don’t learn from the past are condemned to repeat it. As the economic impacts of COVID-19 on our education systems increasingly come into focus, this axiom should be applied to state budgets for higher education.

Over the past generation, we have seen multiple instances of “boom-bust” cycles of spending impacting colleges and universities: disproportionate cuts in lean times and some investment and recovery in better times. And a number of states have still not recovered from the cuts of the Great Recession. For example, in response to the steep drop in revenue, California steeply cut the state’s community college system by more than $1.5 billion. The result? Fewer full-time instructors, a decline in course offerings, and a double-digit drop in enrollment. While the state restored and stabilized some funding in 2012, community college enrollment in the state is still down a decade later.

As we look to the new year, states face tremendous fiscal challenges — and difficult choices. Repeating some of the patterns of the past — across-the-board cuts, steep tuition increases, reductions in access — will leave our colleges and universities weaker and less equitable, risking the hard-fought student success gains of the past decade, particularly among Black and Latino students and students from low-income backgrounds.

In recognition of the urgency of this moment, the Gates Foundation has joined with Lumina Foundation for Education, supported by HCM Strategists, to develop recommendations for state policymakers as they grapple with the difficult decisions ahead. To be clear, these recommendations are offered as principles to consider in making decisions and trade-offs, not as strict guidance that would be applied the same way in every context. But we believe these principles will better position public colleges and universities to weather this storm and lay the groundwork for a stronger, more equitable recovery.

1. Put equity first. Across-the-board cuts land hardest on the institutions that serve the most Black, Latino, and Indigenous students and students from low-income backgrounds, because those institutions depend more on state funding than their wealthier and more selective peers. If cuts are needed, they should be made with promoting equity in access and success as the priority.

2. Prioritize financial need over academic merit. States should assess existing financial aid policies to ensure current aid is reaching the students who need it most. From there, the aim should be for student aid programs, even those with merit criteria, to focus on students with the greatest financial need.

3. Support evidence-based practices. Our work with partners over more than a decade shows that redesigning advising and developmental education works, and that digital teaching and learning tools can help students stay on their path to a certificate or degree. But implementation requires investment, and that investment pays off over time.

4. Look across multiple funding sources. Too often we keep education, workforce, and human service funding in silos and don’t think about how to weave them together to meet the needs of students. Today’s college students don’t live their lives in silos. They are students, workers, and caregivers. Our approach to serving them should reflect that.

5. Address institutional costs. Cost is a big, complicated issue in higher education that needs to be addressed. This moment in time, however, calls for focus on the cost to deliver education to students. The pandemic is forcing higher education to think about what can and needs to change…maybe forever. Colleges and universities need strong incentives to share programs and resources, whether it is administrative functions or academic programs that are important but have low enrollment.

State policymakers and institutional leaders have very tough choices ahead of them — none of which are easy. If changes like these were easy, they would already be in place. But this is a moment that carries unprecedented challenges and demands more of all of us, including philanthropy. College enrollment is down this fall by 4 percent. Community colleges have been especially impacted, with enrollment down 9.4 percent, even in a recession.

As I’ve said many times this year, we need to do everything we can to ensure that this public health crisis does not become an opportunity crisis for students. One of the best ways to prevent that from happening is for state elected officials to make decisions that will write a new chapter of history — one that speaks to the needs of students in both the short- and long-term, and one that ultimately pushes our higher education system toward better, more equitable outcomes.