State capitol building with storm clouds in the background.

American higher education is in the eye of a hurricane. When the pandemic hit last spring, campuses were buffeted by the frantic transition to remote instruction, lost revenue, and emergency spending on health and safety measures. The country made it through the tough early months with unprecedented cooperation between higher education leaders, faculty members, and students—all determined to chart a course through the storm. As limited relief arrived from the federal government, colleges and universities settled unsteadily into a new reality.

Today, the winds have calmed a bit—but this will not last. For higher education, state budget cuts and austerity measures loom, and we must prepare now.

Recognizing the urgency of the moment, Lumina Foundation, in partnership with Bill & Melinda Gates Foundation and HCM Strategists, worked with experts in higher education policy and finance to develop a framework to help state leaders meet this historic challenge. The framework offers principles, analyses, advice, and examples of best practices.

Five principles for action

By most estimates, state revenues and budgets will decline 7 percent to 30 percent during the 2021 fiscal year. State budget cuts in support of higher education could be unavoidable—and certainly will be harmful if they occur.

Just as COVID-19 has intensified health inequities and economic losses, pending state budget crises threaten to worsen the already bleak financial position of colleges and universities – entities that contribute to healthy state economies.

As they respond, we urge state leaders to avoid making across-the-board cuts and instead prioritize and protect what’s working. In doing so, states can implement longer-term solutions that create fair, accessible, affordable paths to college degrees and shorter-term credentials that can help the nation’s most vulnerable populations.

Along with our colleagues at Bill & Melinda Gates Foundation, we believe policymakers should keep several principles in mind as they make decisions:

  • Prioritize funding for colleges and universities best positioned to serve students of color and low-income students, along with organizations that help unemployed or underemployed people gain new skills.
  • Protect and expand need-based financial aid through increased or reallocated investments.
  • Support programs and strategies that advance students’ ability to finish programs leading to credentials of value.
  • Invest strategically in ways that can stimulate economic growth.
  • Look for ways to reduce systemic and institutional expenditures not directly tied to helping today’s students succeed.

Already, we see proactive funding decisions that reflect these principles.

Indiana spent federal funds to expand its 2021 budget year Next-Level Jobs program, which trains people for jobs in high-demand fields. Virginia increased the availability of online classes and assistance to students affected by the pandemic, while California and Tennessee prioritized need-based financial aid. And Texas allocated $10 million in federal CARES Act funding to reduce students’ college outlays and, using data, to bolster their academic success.

Helping those who need it most

These states and others are acting with strategic intent—with a focus on people who often are left behind. In the absence of such steps, the country will reverse decades of progress in expanding college access and increasing success among students from low-income families, immigrants and other first-generation college students, and students of color.

The economic fallout from the pandemic has especially hurt people of color and people earning low wages, many of whom work in retail, hospitality, and other service sectors that have been damaged. And unjust educational outcomes among these Americans often translates to fewer job options. The country needs to address these divides through an intense focus on fair and just outcomes.

Our proposed principles can help, but it will take much more to minimize the damage from this storm Overcoming this adversity will require the cooperation we witnessed earlier this year when higher-ed institutions partnered with faculty, staff, and students to continue learning in safety. It will take policymakers willing to break with traditional, often reflexive funding practices. And it will mean tough choices and compromise by everyone from members of Congress to faculty and student senates.

Together, we must find the way through—and create safe passage for everyone who is eager to learn, earn, and build a brighter future.

Scott Jenkins is Lumina’s strategy director for state policy, and Jesse O’Connell is the foundation’s strategy director for federal policy. Lumina is an independent, private foundation in Indianapolis committed to making opportunities for learning beyond high school available to all.

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