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Cougar Chat, In the News, The state of higher education in Washington State

The State of Higher Education in Washington State: the latest facts, figures on the value of a college degree


Last year, WSU Impact introduced a series that explored the state of higher education in Washington State. We continue our series by highlighting current national and state trends concerning state funding for public higher education. We also provide new data on the importance of a college education in light of today’s economic realities and the needs for society. For our WSU Impact advocates, the data are helpful in learning more about the value of a college degree at differing levels of impact; from one’s own personal pocketbook to the state’s economic development and job creation potential, and resiliency during recessionary times. Learn how the state of Washington ranks in comparison to other states in several categories and the anticipated demand for higher education degrees over the next several decades.

National Trends

Inside Higher Education reported that state funding for public higher education funding was better in 2013 than in the last five years. Washington State was one of 37 states that received increases in operating support for public colleges and universities coupled with constrained tuition increases. (The American Association of State Colleges and Universities, 2013)

This outcome raises the question: are the increases due to improving state coffers as economic recovery continues or the growing recognition that college degree attainment is a key indicator of economic success for individuals and states, or, perhaps, to some combination of both factors?

Data continue to suggest that investment in higher education helps drive work force preparation, economic development, and general well-being of states. Indications are that individual earning power and the associated multiplier benefits of higher wages, consumer spending, and increased tax revenues are impressive. In partial support of this assertion, the relationship between educational attainment and personal earning power, as shown below, is particularly intriguing:

higher education makes a difference

In addition to economic recovery, some states reported that policy discussions between universities, opinion leaders, and elected officials recognized that investments in higher education increased the economic resiliency of workers as well. The chart below demonstrates that workers with high school diplomas or less suffered the brunt of job losses from the recent recession and job recovery has tended to be confined to those with post secondary education:

recession and recovery_education mattersSource: The College Advantage: Weathering the Economic Storm, Georgetown Center on Education and the Workforce, August 2012

Any comprehensive analyses of investments in higher education should also consider the substantial financial contributions and associated opportunity costs that students and their families make to enable post secondary education. Although these personal costs can be high, evidence suggests that the payoff can be advantageous, particularly when compared to other investments.

The Brookings Institution posed an intriguing question in this regard. Namely, where is the best place to invest $102,000 – in stocks, bonds, or a college degree? The following chart on the estimated rate of internal rate of return for various investment options, although only one reference point, is self-explanatory:

internal rate of return

Finally, more states are acknowledging that higher education investments equate to investing in future state job growth, particularly for a workforce that is under increasing pressure to update skills and knowledge to meet ever-changing  job requirements. Nationally, it is anticipated that within five years, almost two-thirds of all employment will require some college education or more:

percentage of work force by degrees

Source: Help Wanted: Projections of Jobs and Education Requirements Through 2018, Georgetown Center on Education and the Workforce, August 2012

Washington State trends

Washington State’s 2013 reinvestment in higher education was one of the more significant in the country. In late June, the legislature approved increases in spending on public higher education, a step in mitigating cuts in state share in higher education funding.

full flip flop of who pays Source: Legislative Evaluation and Accountability Program, January 2012

Washington State University President Elson S. Floyd said in response to the 2013-2015 operating budget passed by the legislature:

There are many positive aspects to the higher education budget for the next two years. By far, the most encouraging part is the recognition that we cannot continue to fund higher education on the backs of our students. Moving into the biennium with absolutely no increase in student tuition – and just as importantly, replacing the revenue that an increase would have generated with state dollars – marks a renewed commitment to keeping higher education affordable and accessible. It provides welcomed relief to students and their families.
Another benefit of the new budget is complete funding for maintaining current operations. That investment provides a stability that is critical to solidifying and improving the quality of our programs throughout the state. It also bolsters the confidence of hard-working faculty and staff.
Overall, this budget constitutes a vote of confidence from the legislature in higher education and the role it plays in creating a vibrant economy for our state. It gives WSU the opportunity to be of even more service to Washington and its residents.

The state of Washington, like other states in the nation, and consistent with President Floyd’s statements, had robust discussion on the benefits of providing our state with a skilled workforce along with the economic contributions made by research universities like WSU. This discussion will likely continue in the years ahead due in part, to 20 years of declining state financial support while universities have experienced a rapid increase in the number of students (see chart below):

state funds, tuition, costs and students

As the legislature continues to face tough fiscal decisions in response to difficult budget challenges, dialogue will likely include a focus on how WSU and other higher education institutions will address  the current skills gap in jobs requiring proficiency in science, technology, engineering, and math (commonly referred to as STEM) and the health care fields. Simultaneously, the state will also need to prepare for a rise in high school graduates over the next 25 years, with an anticipated increase in students seeking post secondary opportunities.

projected high school graduates

Source: Western Interstate Commission for Higher Education, Knocking at the College Door: Projections of High School Graduates, 2012

Importantly, how well our public universities are competing for quality teaching and research faculty will continually be assessed, particularly given the anticipated competition for recruiting and retaining quality faculty in a national marketplace. Meanwhile, the universities will continue to seek and deliver on efficiencies and provide accountability to ensure state dollars are being used wisely.



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