COVID and Higher Education – What a recession means

Increasing unemployment and lost revenue for states means that many states will be strapped for cash. Unfortunately, when state budgets become tighter, higher education is one of the first budget lines legislators and governors cut. That’s because they have competing expenses—like Medicaid, prisons, and pensions—and higher education is often the easiest to cut. When states cut appropriations to higher education, colleges and universities can cut costs, but mostly they just shift the costs to the students and families by increasing tuition and fees. States have a harder time doing that with other areas.

Often during recessions, enrollment in higher education surges as more people lose their jobs and face a lack of job prospects. This recession is different, but we don’t know the economic impacts of it just yet. It is possible enrollment will still increase if unemployment remains high. Even those employed might see this as an opportunity to enroll if they were already in lower-paying jobs. Those graduating might go back to school to get a graduate degree like we saw in the Great Recession. And if both costs and enrollment increase it will contribute to a rise in cumulative student debt.

Policymakers have enacted some policy changes to help institutions and students now, but they need to look ahead. If Congress doesn’t consider the impacts of the economy on state budgets, it’s possible students will see an increase in their tuition bill in the fall and in coming years. Students need a real investment in higher education, and a possible recession will make that need even more urgent.

Chosen excerpts by Job Market Monitor. Read the whole story @ What A Likely Recession Means For Higher Education