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.

This article was edited on April 19th, 2023, to correct for an error in the original data analysis.

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.

A recent study published in the Journal of Higher Education reveals that a college graduate’s mix of funding sources may reflect when they were born and how likely they were to obtain a graduate degree.

The Indiana General Assembly recently passed three bills that have the potential to impact the workforce in the state. Two bills address college affordability while the third exempts active-duty military from paying individual state income tax.

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

Bachelor’s degrees are no longer required for many jobs

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.

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 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.

Two-year colleges have gone through various changes in recent decades. The following are highlights of some of them.

College enrollment

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.

By 2031, 72 percent of jobs in the US will require postsecondary education and/or training, according to a 2023 report by Georgetown University. The authors contend, “Postsecondary education is no longer just the preferred pathway to middle-class jobs—it is, increasingly, the only pathway.”

Public perceptions of higher education are complex and multifaceted. A Chronicle of Higher Education 2023 report found that while Americans believe in the value of a college credential, they are not convinced higher education is fulfilling its promise to society; nonetheless, many recent polls, surveys, and reports also conclude that people, whether they have a four-year degree or not, would advise others to pursue one.

For the last 40 years, higher education has been the dominant performer of basic research in the United States, but there has been a slide in higher education’s share over the last 20 years as businesses have increased their performance of basic R&D (Figure 1). If the current trendline continues, businesses will soon surpass higher education as basic R&D performers and become the predominant basic R&D performer just as they have been in applied R&D for decades.

With classes resuming for the fall term, SSTI continues its reflection on the state of higher education. In last week's issue, today's and next week's, we’re examining where higher ed has been and where it currently stands. The post-secondary education system is the cornerstone of the American innovation system—as an R&D performer, moving research into the marketplace, offering technical assistance to companies, and supplying a skilled workforce.

Total student loan debt in the United States increased 558% from the first quarter of 2003 to the second quarter of 2024, increasing from $240 billion to $1.58 trillion, according to Federal Reserve Bank of New York data.

In the last 20 years, college tuition has doubled, making tuition and required fees the major component of the rising costs of attending college. Figure 1 shows that the average tuition and fees at public four-year schools increased by 84% between the 1999-2000 and 2019-2020 academic years, far faster than the 15.7% increase in median household income during that period (note this period was chosen to avoid pandemic era swings in data).

In this Digest issue, SSTI continues its examination on the state of higher education. Today, we start with rising student loan debt, which research shows has dire consequences on borrowers, including delayed home ownership, hindered retirement savings, and financial stress.

Higher education R&D expenditures, while continuing to steadily increase, have not grown evenly across state lines. This matters to successful TBED policymakers because a strong R&D enterprise within a state’s public and private institutions of higher education can and should provide a consistent source of skilled workers, new technology, and sources for innovation-driven business growth. So where is R&D growing?

Readers may have noticed the most populous states end up topping many of the statistical tables related to economic development. Normalizing the data by some relevant, related measure can provide a higher quality look that is a little closer to the “apples to apples” appeal that might help influence some policy issues. For this week’s edition of Useful Stats, SSTI is exploring research intensity as a component of state gross domestic product (GDP) and the research load “carried” by each member of the R&D personnel within the state’s higher education community.

Higher education R&D (HERD) expenditures have steadily increased over time. They’ve soared past $100 billion in the most recent data year, fiscal year (FY) 2023, growing in every state. However, the gains are not shared equally in all fields of research.

The most recent  Higher Education R&D (HERD) survey revealed the largest year-over-year percentage increase in higher education R&D since 2002 to 2003 and dollar increase across all fiscal years (FYs) captured by the survey. HERD expenditures breached the $100 billion mark in 2023, having grown 11% from $97.8 billion in 2022 to $108.8 billion in 2023 (7% in constant 2017 dollars, from $82.9 to $89 billion).

This article was edited on April 19th, 2023, to correct for an error in the original data analysis.

What is the value of a college degree today? While tuition costs continue to rise, opinions on the perceived value of the degrees institutions of higher education provide are falling.