U.S. Competitiveness Undermined By Cuts in Higher Education

When state and federal lawmakers invest in public higher education, it pays off— not just for those college degree-earning students, who will earn much more money over their lifetimes, but also for their country, which will enjoy billions of dollars in additional revenues, concludes a recent report.

Unfortunately, the United States hasn’t made that investment, especially not in recent years as state budgets for public higher education are slashed and federal college affordability programs attacked, and now we are falling dangerously behind our global competitors, write the authors of “The Credential Differential,” a report released last month by the Center for Law and Social Policy (CLASP), an organization that seeks to improve the lives of low-income people.

“Right now the nation is losing ground and falling far behind,” warned Vickie Choitz, CLASP senior policy analyst. “Without more attention to and investment in increasing post-secondary credentials, the nation will leave billions of dollars on the revenue.”

In countries like Korea and Japan, more than half of young adults have college degrees, compared to 41 percent in the United States. And those leading countries are on track to increase their attainment rates to 60 percent by 2020. In order to stay in the race, CLASP analysts estimate that the United States would have to award an additional 24 million college degrees or credentials by 2025. (At the current rate, we’re on track to produce just about 300,000 more.)

But it’s extremely unlikely we’ll ever catch up in the global marketplace, unless state and federal lawmakers take a hard look at their priorities. It’s harder than ever to get a college degree in this country. The cost of tuition increases 5 to 7 percent every year, and because of decreasing public funding, many of our public colleges and universities are turning away students and closing programs.

In Florida, for example, Gov. Rick Scott recently signed into law a state budget that swipes $300 million from state colleges and universities. In response, the University of Florida (UF) announced plans to dismantle its computer-science department, cutting the graduate and research programs entirely, to save $1.4 million.

“Let’s get this straight: in the midst of a technology revolution, with a shortage of engineers and computer scientists, UF decides to cut computer science completely?” writes Forbes commentator Steven Salzberg. “I think this move is shockingly short-sighted. The University of Florida is moving backwards while the rest of the world moves ahead.”

The CLASP report includes a state-by-state “Return on Investment Dashboard Tool,” shows Florida could generate $3.5 billion more if it could increase its degree-attainment rate to 60 percent. (Instead, last year, Florida cut its investment in public higher education by 12 percent. The budget for its flagship university, UF, has been slashed 30 percent over the past six years.)

And Florida isn’t alone. Consider Pennsylvania, where Gov. Tom Corbett has proposed a more than 50 percent cut to 18 state-supported colleges and universities. If approved, it’s likely several campuses would close, programs would be shuttered, and students turned away. “This is the most irrational public policy I’ve ever seen in my life,” said state Sen. Daylin Leach.

It simply doesn’t make sense for Pennsylvania’s fiscal health to continue cutting public higher education. The CLASP state-by-state analysis shows that annual per capita income in the Keystone State is projected to decrease over the next few decades—and state revenues also are falling to the tune of $214 million by 2025. But if it could produce more college graduates, Pennsylvania could generate $1.6 billion instead.

“The bottom line is, even in these tough economic times when there are difficult fiscal decisions to be made, increasing credential attainment pays off for individuals, their families, states and the country,” CLASP’s Choitz said.

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  • Mike

    State and federal lawmakers NEED TO STOP “investing” in public higher education – they are making tuitions skyrocket. By pouring tax dollars into programs which make these dollars available for students to go in to debt with, they are artificially raising the cost (and value) of a college degree. Remove ALL government subsidies from this industry and watch universities nationwide be forced to drastically cut tuition cost…making college affordable for EVERYBODY – thus increasing America’s competitiveness.

    Mary Ellen Flannery (and by proxy Tim Walker), you are so clueless.

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  • Dan

    @Mike Yeah, that’s why private degrees cost 50k/year. /sarcasm

    The problem has been funding cuts and the failure of financial aid to keep up at all with costs- which are rising due to inflation, increasing operationg costs, the cost of recruiting prestigious faculty, and not to mention the facilities and opportunities demanded by students (and employers!) alike. Do some research.


    An undergrad senior at a public institution writing a senior thesis on the rising cost of public higher ed

  • Mike


    I guess you must be the expert. After all, you are writing a thesis at a public institution and are probably in debt to your eyeballs for the privilege.

    The fact that private school tuition is so expensive is irrelevant. They are providing a service at a price people under their own free will ARE WILLING (the key word is ‘willing’) to part with their money to pay for. Funding cuts are not the problem, they are a solution. Whenever the government injects its tax subsidy/Chinese loan/printing press money into the equation, the balance of supply, demand, and ultimately PRICE are distorted from their free market settings. This has been seen in health care, and especially in the mortgage industry.

    Read The Constitution, I have several times. Nowhere in this document does it mention the federal government helping kids go into debt to go to college.

    I hope YOU will do more research into the matter, but I highly doubt it..it seems you are well on your way to earning an A on your thesis.


    A guy who understands economics more than you do.

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