Is the idea of higher ed as a private good holding back public support?
No one would disagree, at this juncture, that higher ed is facing a perception problem. From a town-gown disconnect propelled by what some cite as the extreme arrogance of the academy to a widespread belief that the industry is not adequately preparing students for the “real world,” there are a number of issues people have with higher education, which contribute to declining overall public support.
One factor few are discussing today is the overwhelming sense that higher ed is a private good which should not be supplemented with public dollars.
Phillip Trostel, an economist at the University of Maine, calls it “the curse of the college earnings premium” — by continuing to prop up the earnings of degree holders compared to those who do not have a college degree, “it fuels the idea that a college degree is a private” commodity. But Trostel would argue that increased individual earnings constitute perhaps 20% of the actual total benefit of higher education. The wider societal benefits, he argues, are even larger than the personal ones.
“The most important one I can’t quantify, and that is creating innovation that creates economic growth,” said Trostel speaking at the Higher Education Government Relations Conference in San Diego in December. I’m completely convinced this is the most important single benefit of a college education.”
But even if we ignore jump starting innovation because it cannot be quantified, Trostel said “the external benefits are massive.”
“People getting college degrees makes other people more productive, and therefore [others around the degree holders also] earn more,” he said. “If you look at the differences in college attainment across cities and states — you’ll see places that have a higher percentage of college graduates, they have a higher per capita income, which is no surprise given the college earnings premium, but … the increase is about double that which can be explained by the college earnings premium.”
And those people will earn more, pay more in taxes and, perhaps most importantly, be less reliant on social safety net programs. The government would save so much on entitlement programs as a result that it would cancel out any public investment in higher education, he argued, adding, “So as a taxpayer, I benefit from your college degrees.”
“The real return of investment on taxpayer investment in college students is, conservatively, 10.3%,” figures Trostel.
Jennifer Poulakidas, Vice President for Congressional and Governmental Affairs for the Association for Public and Land-grant Universities, said “higher ed is a net benefit, a net win for our country and individuals.”
But those in the higher ed community have to work harder to bridge the growing chasm between colleges and universities and the general public. “[We] have to be out talking to our communities, our scientists have to be out relating to the communities in which their universities sit, so there’s a connection — there’s not just scientists sitting in an Ivory Tower, but make that connection — what does it mean to me” as a regular citizen, she said.
There are some states where local governments are already realizing the “net win” for the state of investing in higher education.
Looking to Nevada as a model
Constance Brooks, vice chancellor for government and community affairs for the Nevada System of Higher Education, touts Gov. Brian Sandoval’s commitment toward diversifying the state economy through higher education as a major reason for the state’s decisive investments in the enterprise. In fact, the theme of the 2017 legislative session was the “session of higher ed,” said Brooks.
Nevada was hit particularly hard by the Great Recession, because of its reliance on tourism to propel the state’s economy. When people across the country had less money to spend on leisure, Nevada saw “a high number of individuals in low-level jobs returned to finish, or start, their education,” Brooks said. At the same time, faculty were facing five furlough days per year and an 8% salary cut, which made it particularly challenging for the state’s public institutions to retain the best and brightest faculty members and improve student outcomes.
“The governor, in supporting the new Nevada, understood fully that higher ed had an integral role in developing the workforce, in attracting new industry [to state]. Though, our chancellor has a seat on the governor’s cabinet, I think it was helpful that in the beginning of his first term, we had a seat at the table,” Brooks said.
At the nudging of the governor, the state focused on four key themes as it deliberated budgets: strengthening community colleges, increasing capacity to serve the entire state — which was particularly important to the governor, supporting faculty and staff and budget building with efficiency and effectiveness.
“We went down to having sandwiches for lunch instead of having salads and all of those nice things that you would have at board of regents meetings,” Brooks said, adding, “I think our legislature appreciated just how much we were able to trim the fat and build our budget with efficiency and effectiveness.”
But despite support from the governor, the legislature, “to put it nicely, has a strained relationship with our board of regents,” said Brooks. To win over the support of elected officials in the state, the board of regents sought the support of all of its stakeholders, from the business community to local nonprofits, labor unions, the media, former elected officials, the faculty senate, and of course, students.
There was a realization that “community colleges were really underrepresented” in the legislative process, because they don’t have the strong alumni groups or the ability to offer box seats at major athletic events or any of the other perks the large institutions could leverage.
“There’s a delicate dance when it comes to budget building with eight institutions throughout the state, and because we have such an intimate relationship with the governor’s budgetary staff,” system officials did have to make some cuts to the asks from individual campuses “to say here’s where community colleges fit in, here’s where regional institutions fit in, here’s where our research institutions fit in” with the overall plan for the state.
Through presentations from the chancellor and other public officials at caucus meetings, legislative meetings” and frequent communications with the governor’s office, Nevada higher ed officials were able to help turn the tide.
“We did a wonderful thing with data mining using student zip codes where we were able to show legislators the number of students in their districts who were attending our colleges and universities,” said Brooks. "We’re looking forward to developing those relationships, understanding their goals for higher education, and hoping they’re going to be as supportive as Governor Sandoval.
Follow Autumn A. Arnett on Twitter