‘Test case’ Pennsylvania plans university funding overhaul

All eyes turn to large and poorly funded state system as it considers further cutbacks, providing clues as to how the US will tackle demographic changes

March 21, 2023
Large tree cut down from central Pennsylvania to illustrate ‘Test case’ Pennsylvania plans university funding overhaul
Source: Getty

The state of Pennsylvania is considering yet another round of consolidations and cutbacks in its public higher education system, offering a major bellwether of the choices confronting US regions handling population declines.

New governor, Democrat Josh Shapiro, has asked state lawmakers for a 7 per cent funding hike for the state’s four leading public universities and only a 2 per cent rise for the rest, while suggesting these lesser-ranked institutions further merge and consolidate their offerings.

The state – which already has some of the lowest levels of higher education funding in the US – has only just finished cutting its main grouping of public universities from 14 institutions down to 10.

In his annual governor’s budget address, Mr Shapiro called for a year-long review of reform options covering all remaining campuses. 

“As enrolment declines and questions about the value of a college degree persist, it’s on all of us to once and for all have an honest dialogue about higher education in Pennsylvania,” Mr Shapiro said.

The governor ordered the action amid an atmosphere of anxiety across the country about how to cope with shrinking or already negative population growth rates. As one of the most populous US states, Pennsylvania is also seeing some the sharpest declines, alongside more than a third of US states whose populations are shrinking.

This was having a negative impact on college enrolments. The National Student Clearinghouse Research Centre reported that the 2021-22 academic year suffered the largest contraction in first-time undergraduate degrees in a decade, caused by three major factors – pandemic-led disruptions at campuses, the job market, and the underlying demographic shifts.

Despite these drops in enrolments, fewer US campuses have been closing – last year marked a sixth straight year in which the nationwide number of institutional shutdowns decreased, according to the State Higher Education Executive Officers Association, which represents the leaders of state post-secondary systems.

But federal pandemic relief funding may have helped some struggling institutions stay in business, said a Sheeo spokeswoman, Jessica Duren. With that governmental aid now ended, vulnerable colleges and universities “may once again struggle financially when institutions return to business-as-usual”, she noted.

Given Pennsylvania’s size, its response to Mr Shapiro’s challenge could influence future political decisions around the country, said Robert Maxim, a senior research associate specialising in regional public universities at the Brookings Institution.

The state’s higher education system has three distinct parts: a network of 15 community colleges; the 10 universities remaining in the Pennsylvania State System of Higher Education, or Passhe; and four top-tier institutions – including Penn State University, the University of Pittsburgh and Temple University – that are allowed relatively high levels of independence.

But unlike most other states with multiple systems, Mr Maxim said, Pennsylvania created its networks so that some of the campuses compete in the same geographical areas, allowing for some of the waste cited by the governor.

Pennsylvania’s higher education system was also notable both for the high quality of its research and its relative failure to convert that creative wealth into broad economic growth, Mr Maxim added.

The state’s leaders reviewing their higher education options should bear this in mind, Mr Maxim said, rather than let declining population rates become an excuse to keep cutting or consolidating. A key part of their mindset, he said, is to build enrolment among the parts of the population that are still getting left behind in the economy’s evolution to new technologies.

State officials are in the early stage of assessing those options. Passhe’s four-campus reduction was a necessary adjustment, said the system’s chancellor, Daniel Greenstein, given the need to better serve rural communities with online options. But the new review will be the third in Dr Greenstein’s five years in the state. That “testifies to the need but also the complexity,” he told Times Higher Education.

Mr Maxim said state leaders should understand that conditions do not have to be so bleak if they stop cutting the funding that many students need to attend college.

“Part of the frustration that I and others have with the idea of demographics as this inevitable trend,” he said, “is that it lets policymakers off the hook in some ways for the decisions that they’ve made, and they can kind of throw their hands up and say, ‘Well, the demographic projections say our enrolment is going down anyway, so what’s the point of even keeping these schools open’.”


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