During an economic downturn, a high-quality postsecondary credential matters more than ever, but colleges struggle to sustain per-student funding without raising tuition.
A high-quality postsecondary credential matters now more than ever.
Ready for careers: Postsecondary certificates, diplomas, and degrees are essential to meeting the demands of Tennessee’s changing workforce. Over the last decade, the portion of Tennesseans with a postsecondary credential increased from 38 percent to 43 percent.1 This progress, however, is still not enough to meet the needs of the state’s workforce.2 Tennessee’s colleges of applied technology (TCATs), community colleges, and universities must continue supporting all students as they pursue high-quality credentials to help prepare them to succeed in tomorrow’s economy.
Ready to advance: The average college graduate earns more over a lifetime than a high school graduate nationwide and in Tennessee.3 A postsecondary credential – whether an industry certificate, associate’s degree, or bachelor’s degree – is an investment in higher wages and increased job opportunities for students. The increase in earnings between a high school and college graduate is even more important for African American and Hispanic students, groups that have been historically underserved by higher education and that remain underrepresented among college-educated Tennesseans.4
Ready for the future in hard economic times: As the economic recession resulting from COVID-19 continues, students with college degrees will likely have greater job security. Businesses hold postsecondary credentials in higher regard when making hiring and firing decisions during economic recessions.5 During these times, a stronger policy focus on postsecondary education is essential to ensuring that every student graduating high school in the state has an opportunity to earn a postsecondary credential that carries value in Tennessee’s economy.
Students are more likely to earn their credentials when college is affordable and support services are offered.
Economic downturns make it difficult for colleges to sustain per-student funding levels without raising tuition.6
College affordability: State appropriations provide a sizable portion of recurring revenue for Tennessee’s public colleges and universities.7 In times of economic decline, strained public sectors are vying for fewer state resources. When state budget reductions to postsecondary education occur, colleges and universities become more dependent on tuition for revenue. However, increases in tuition and fees mean the financial burden is shifted to students, which can hinder enrollment in college, persistence from semester to semester, and ultimately completion of a credential. And these trends will not be felt evenly. Shifts in college affordability have been shown to have a disproportionate effect on low-income students.8
Student success: When colleges and universities have more resources, their students are more likely to earn a credential.9 Additional resources not only enable colleges and universities to keep tuition affordable but also to more efficiently preserve institutional scholarships and financial aid, specific academic programs, and meaningful student support services such as summer bridge programs and career advising.10
Over the last decade, Tennessee’s policymakers and education leaders have built a student-focused policy foundation that simplifies, supports, and broadens access to college. Maintaining and renewing this commitment to students will put our state’s colleges and universities in a strong position to weather the ongoing economic impact of COVID-19.
Next Section
Section 2
Education And Economics: Lessons Learned From The Last Two Recessions
The last two recessions provide us with three key lessons to consider in response to the economic recession caused by COVID-19.
Education And Economics: Lessons Learned From The Last Two Recessions Next section title will be automatically displayed here.
Section 2
Education And Economics: Lessons Learned From The Last Two Recessions
The last two recessions provide us with three key lessons to consider in response to the economic recession caused by COVID-19.
Section 2 Sources
1 Postsecondary Attainment in the Decade of Decision. Tennessee Higher Education Commission (2015); A Stronger Nation: Learning beyond high school builds American talent. Lumina Foundation (2013, 2020).
2 Carnevale, Anthony, Nicole Smith, and Jeff Strohl. “Recovery: Job Growth and Education Requirements.” Georgetown University Center for Education and the Workforce (2013).
3 Carruthers, Celeste and Thomas Sandford. “Way Station or Launching Pad? Unpacking the Returns to Adult Technical Education” Journal of Public Economics (July 2018); Chetty, Raj, et al. “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility.” The National Bureau of Economic Research (July 2017); Oreopoulos, Philip and Uros Petronijevic. “Making College Worth It: A Review of Research on the Returns to Higher Education.” The National Bureau of Economic Research (May 2013); Educational Attainment in the United States: 2019. U.S. Census Bureau (March 2020).
4 National Center for Education Statistics, 2016.
5 Autor, David. “Skills, education, and the rise of earnings inequality among the ‘other 99 percent.’” Science (May 2014); Carnevale, Anthony, Tamara Jayasundera, and Artem Gulish. “America’s Divided Recovery: College Haves and Have-Nots.” Georgetown University Center for Education and the Workforce (2016); Belfield, C. “Weathering the Great Recession With Human Capital? Evidence on Labor Market Returns to Education from Arkansas.” Center for Analysis of Postsecondary Education and Employment (November 2015); Greenstone, Michael and Adam Looney. “A Broader Look at the U.S. Employment Situation and the Importance of a Good Education.” The Brookings Institute (February 2011); Grusky, David, et al. “How Much Protection Does a College Degree Afford? The Impact of the Recession on Recent College Graduates.” The Pew Charitable Trusts (January 2013); Rubb, Stephen. “The impact of the great recession on overeducated and undereducated workers.” Education Economics (February 2020); Chen, Xiaglei, et al. Early Millennials: The Sophomore Class of 2002 a Decade Later. The US Department of Education, The Institute of Education Sciences, & The National Center for Education Statistics (June 2017).
6 Delaney, Jennifer and William Doyle. “State Spending on Higher Education: Testing the Balance Wheel over Time.” Journal of Education Finance (2011).
7 State Higher Education Executive Officers Association, 2020.
8 Carruthers, C. K., & Özek, U. (2016). Losing HOPE: Financial aid and the line between college and work. Economics of education review, 53, 1-15. Garcia, Rosa. “Making College More Affordable for Low-Income Students.” Center for Law and Social Policy, Inc. (January 2018). Denning, J. T. (2019). Born under a lucky star financial aid, college completion, labor supply, and credit constraints. Journal of Human Resources, 54(3), 760-784.
9 Deming, David and Christopher Walters. “The Impacts of State Budget Cuts on U.S. Postsecondary Attainment.” The National Bureau of Economic Research (February 2018); Koshal, Rajindar and Manjulika Koshal. “State Appropriation and Higher Education: What is the relationship?” Education Economics (February 2000); Heller, Donald. “The effects of tuition and state financial aid on public college enrollment.” The Review of Higher Education (1999); Volkwein, J.F. “Changes in quality among public universities.” Journal of Higher Education (April 1989).
10 Nguyen, Tuan D., Jenna W. Kramer, and Brent J. Evans. “The Effects of Grant Aid on Student Persistence and Degree Attainment: A Systematic Review and Meta-Analysis of the Causal Evidence.” Review of Educational Research (December 2019); Washington, Heather, Joshua Pretlow, and Elisabeth Barnett. “A Good Start? The Impact of Texas’ Developmental Summer Bridge Program on Student Success.” The Journal of Higher Education (October 2016).