With classes resuming for the fall term, SSTI thought now would be a good time to reflect on the state of higher education. In this issue and the September 5 issue, we’ll examine where higher ed has been and where it currently stands. The post-secondary education system is the cornerstone of the American innovation system—as R&D performer, moving research into the marketplace, offering technical assistance to companies, and supplying a skilled workforce.
Two-year colleges have gone through various changes in recent decades. The following are highlights of some of them.
College enrollment
Two-year colleges have gone through various changes in recent decades. The following are highlights of some of them.
College enrollment
Encouraging more people to attend or go back to college is a vital part of ensuring individual and national economic success, but with rising costs of attending traditional four-year colleges and a public seemingly less convinced about the worth of higher education, two-year colleges, also referred to as community colleges or technical schools, are seen as a reliable alternative for a quality postsecondary education, and are valued for their affordability and accessibility to obtaining the degrees or credentials needed to ensure a dynamic and skilled national workforce.
The educational landscape of the United States has undergone significant transformation over the past three decades, with the percentage of individuals 25 and older having earned a bachelor's degree steadily increasing since the 1990s. Nationwide, 20% of those aged at least 25 had a bachelor’s degree in 1990, while in 2021 this figure jumped to 38%. However, educational attainment varies greatly across states. Many states, such as Massachusetts, Maryland, Colorado, New Jersey, and Rhode Island, alongside 15 other states, fall above the national value of 38% in 2021.
In 2000, the United States was among the global leaders in educational attainment, boasting the third-highest percentage of its 25- to-64-year-old population with a postsecondary degree across the 38 Organization for Economic Co-operation and Development (OECD) nations. However, over the past two decades, the U.S. has gradually slipped in the rankings, falling to ninth place by 2022 even as the percentage of the population with a postsecondary degree increased from 36% to 50%.
The landscape of American higher education has transformed dramatically since Harvard’s founding in 1636. What began as a handful of institutions primarily focused on training clergymen in the American colonies has expanded into a vast and diverse system of colleges and universities. Today, students pursue degrees across a wide and ever-growing range of fields.
Bachelor’s degrees are no longer required for many jobs
2023 was a watershed moment in the history of the bachelor’s degree. Against a backdrop of a historically tight labor market, persistent talent shortages, and rising skepticism of the value of higher education, numerous state governments and major corporations dropped college degree requirements for many of their jobs.
This year’s legislative sessions saw a handful of governors and lawmakers proposing noteworthy reforms or other changes to their states’ institutions of higher education—from system overhauls to the expansion of tuition-free community college programs—all in efforts to align their state’s education investments with current and future workforce needs, as well as address future costs under tightening budgets.
Restructuring higher education systems
In Mississippi, the state auditor released a report in September 2023 that rated academic degrees by whether the degree would lead to a well-paying job. He suggests that Mississippi invest more in programs in the subject areas leading to those high-paying, in-state jobs. Basing appropriations on immediate wage outcomes implies that near-term economic return is the only benefit that matters, and it is a theme that is recurring frequently.
Total postsecondary enrollment is down 5% from fall 2019 to fall 2023 due to a 6% drop in undergraduate students. While undergraduates are down, graduate students have surpassed pre-pandemic enrollment numbers by 4%. Enrollments in undergraduate and graduate certificates are up significantly from pre-pandemic values (16% and 21%), while enrollment in associate degrees are down more than any other undergraduate credential (-14%).
College earnings premiums appear to be declining for the first time in decades and the value proposition of college is beginning to fade in the eyes of many, according to the Harvard Workforce Almanac. As education costs continue to skyrocket and student debt mounts, Americans are reconsidering whether college is truly worth the expense. One means of addressing the issue is to provide data to better inform decision-making.
The number of graduate students in science, engineering, and health has grown from approximately 328,000 to 760,000 from 1975 to 2021, a 132% increase, according to the National Science Foundation’s (NSF) Survey of Graduate Students and Postdoctorates in Science and Engineering (GSS).
Technologies developed by West Virginia University and the University of North Dakota in Grand Forks that extract and separate rare elements and critical minerals from acid mine drainage and coal waste, will each receive $8 million in funding from the U.S. Department of Energy.
The United States is home to some of the world's most prestigious universities, each performing critical research that helps advance the country’s innovation economy. However, these universities are not evenly distributed across the country; many are concentrated within large cities in states where their spillover further impacts the local economies.
Higher education enrollment dropped 1.1% between fall 2021 and 2022, a slight reprieve from historic COVID-induced drop-offs, as revealed by new preliminary data from the National Student Clearinghouse. Since fall 2020, enrollment has decreased by a combined 3.2% for graduate and undergraduate enrollment, representing a drop of approximately 1.5 million students since the onset of the COVID-19 pandemic.
The Georgia Research Alliance (GRA) — a nonprofit working to grow Georgia’s economy through supporting research at state universities — recently announced that its portfolio of companies had raised more than over $2 billion in venture capital. These startups also had a high survival rate — 88% were still in business four years after launch, outpacing the national average of 44%. Along with this announcement, GRA released 2021 data on their economic impact on the state, demonstrating growth from the previous year.
The U.S. Department of Energy (DOE) announced $540 million in awards for research into clean energy technologies and low-carbon manufacturing at 54 universities and 11 national laboratories.
With President Biden’s signing the CHIPS and Science Act on Aug. 9, states and universities are already making plans to build on the funding opportunities present in the legislation.
Research and Development (R&D) is an essential component of innovation and economic growth, where higher education institutions play a key role. However, with these institutions being responsible for funding just a quarter of all HERD expenditures, it is important to see the influence of outside funding sources on the fields of R&D.
Institutions of higher education spent $97.8 billion on research and development (R&D) activities in fiscal year (FY) 2022, an increase of nearly 9% over the prior year’s $89.8 billion. Over the past decade of available data, from FY 2013-2022, higher education R&D expenditures have increased 46%, from $67.1 to $97.8 billion. However, when adjusted for inflation, the growth is more modest at 17%.
Restrictions placed on registering for high-wage-potential academic majors have had an increasingly disproportionate adverse effect on students from underrepresented minority groups (URM: Black, Hispanic, and American Indian or Alaska Native), according to research from the Bookings Institution.
Two recent studies explored public perceptions of science and technology and higher education in the United States. The first study from the NSF National Science Board explores public perceptions and awareness of science and technology among American adults, and a separate report from New America analyzes attitudes on higher education, with a particular interest in the transition to online instruction in response to the COVID-19 pandemic.
There is an opportunity to turbocharge U.S. innovation by addressing barriers to collaboration between research universities and industry, according to Sheila Martin, vice president of economic development and community engagement at the Association of Public and Land-grant Universities (APLU).
The EDA University Center Economic Development Program Competition recently announced $2.5 million in grants awarded to 25 colleges and universities in the Chicago and Philadelphia EDA regions to leverage assets, promote innovation and strengthen regional economies. The goal of these awards is “to boost innovation, create good-paying jobs and ensure American competitiveness in the global economy” while funding research as well as innovation economy development services.
Less than half of one percent of Americans attend Ivy-Plus colleges, according to the National Bureau of Economic Research (NBER). Yet these twelve colleges account for more than 10% of Fortune 500 CEOs, a quarter of U.S. Senators, half of all Rhodes scholars, and three-fourths of Supreme Court justices appointed in the last half-century.
The United States has been the top destination for those looking to study abroad for decades. Before the onset of the pandemic, over a million students flocked from abroad to attend U.S.-based universities. Now, having dropped by 15% at the onset of the pandemic, international student enrollment is beginning to recover. Despite this recovery, the U.S. is losing market share to countries like Australia, Canada, and the United Kingdom resulting in negative economic consequences.