Recession Could Push U.S. Further Behind in Educational Goals, Compared With Other Nations

The recent recession could accelerate global shifts in the race to educate more people and produce top-flight research, and, as a result, the United States could lose ground.

That’s the conclusion of a new paper by the Center for Studies in Higher Education at the University of California at Berkeley. John Aubrey Douglass, the paper’s author and a senior research fellow at the center, examined the impact of the economic downturn on higher-education budgets in several member countries of the Organisation for Economic Cooperation and Development.

Mr. Douglass found that, outside the United States, most countries have thus far avoided large cuts to college budgets and that, in fact, many nations have used the recession to speed up higher-education reforms. By contrast, some 34 American states have already made major reductions in spending on higher education, in some cases limiting college access.

"Looking over one’s shoulder at the rest of the world, there appears to be a different set of national government approaches to funding and supporting higher education during the Great Recession than what we find in the U.S.," Mr. Douglass writes in the paper, "Higher Education Budgets and the Global Recession: Tracking Varied National Responses and Their Consequences."

Overseas, he says, "political leaders see higher education as a key to both short-term economic recovery and long-term competitiveness."

In recent years, a number of countries, particularly in Asia, have plowed money into higher education and research, funneling resources into elite universities, financing basic research, and expanding access to vocational and junior colleges, with the goal of becoming hubs for innovation. In the United States, by contrast, rates of degree attainment have stagnated; the country now ranks 10th in the proportion of its adults ages 25 to 34 who hold at least an associate degree.

Mr. Douglass warns that the economic slump could be a "pivotal period" that exacerbates current trends in college-going and graduation rates. While college-going rates in the United States have increased slightly over the past decade, other countries have seen sharper gains.

Mr. Douglass credits the Obama administration with enacting a number of policies to try to "soften the blow" to higher education, such as expanding the direct-loan program and using the savings to support more student aid, expanding tax credits for tuition, and providing stimulus funds to states to help offset severe cuts to college budgets. But he points out that most financial support for public colleges, which enroll more than three-quarters of American students, comes from states, which he says have "resorted to uncoordinated and reactionary" spending cuts.

Other studies have documented how previous slowdowns in states’ support for public colleges have threatened the global standing of American higher education.

Contrast in Approaches
In the new paper, Mr. Douglass highlights his home state of California, where brutal budget cuts have led to layoffs, tuition increases, and enrollment caps. Some 250,000 prospective students are being denied access to California’s community colleges, Mr. Douglass says.

By contrast, other countries have shielded their universities from significant budget cuts, with some even using the downturn to accelerate policies to improve quality and promote innovation in their higher-education systems.

China has spared its universities and technical colleges from budget reductions, while countries like Brazil and South Korea actually increased spending on higher education in 2009-10. The French government has gone ahead with plans to give some of its universities greater autonomy over their budgets, and President Nicolas Sarkozy has proposed a 35-billion-euro stimulus package for research, with 11 billion euros of that to be spent on higher education.

Actions like those led Moody’s Investors Service, a credit-rating and financial-forecasting company, to predict that higher-education systems in most countries would fare well, despite the severity of the recession, Mr. Douglass says. In a report issued last June, Moody’s predicted universities worldwide would be able to increase enrollments, receive strong financial support from their governments, and even diversify their revenue sources.

Despite the rosy forecast, Mr. Douglass does see some clouds on the fiscal horizon overseas. Budget reductions could occur in the coming academic year, particularly in Europe, he says. The British government already has announced sharp cutbacks for 2010-11, prompting fears that dozens of universities could be forced to contract or close. Other countries, such as Germany and Japan, also are wrestling with possible decreases in staffing or increases in tuition and fees to deal with tightening budgets.

In the United States, colleges could get a financial lifeline in the federal budget for the next fiscal year, Mr. Douglass says, noting that President Obama has proposed spending increases for student financial aid and academic research as well as aid to states dealing with budget deficits. But such financial support will not be approved for months, leaving colleges vulnerable to another round of state budget cuts and potentially further restricting student access, he says.

The recent recession could accelerate global shifts in the race to educate more people and produce top-flight research, and, as a result, the United States could lose ground.

Overseas, he says, "political leaders see higher education as a key to both short-term economic recovery and long-term competitiveness."

Other studies have documented how previous slowdowns in states’ support for public colleges have threatened the global standing of American higher education.

THE CHRONICLE OF HIGHER EDUCATION