Tuesday, July 30, 2013

Keynesian Community College

We are all Keynesians now, for better or worse.  At least in the community college world.

When the wheels came off the economy in 2009, enrollment at many community colleges -- including my own -- set records.  Parents who had hoped to send Junior off to Valhalla U suddenly couldn’t afford to, and the local community college abruptly made a lot of sense.  And others who might have preferred to work couldn’t find the opportunity, and going back to school made more sense than just doing nothing.  Put differently, when the Great Recession was in full swing, the opportunity cost of college dropped precipitously.

At the exact same time, the state had to reduce its support of public higher ed in order to reflect lower tax revenues, so we faced double-digit percentage increases in enrollment at the exact same time that we faced double-digit cuts in support.  For a few months, we were the darlings of the local news media, since we were basically the only “growth” story in town.  The pressure showed up even in small ways; campus work-study jobs that had been hard to fill in normal years were never more popular, mostly because they were the only available jobs in town.

As the recession slowly, slowly, slowly recedes, and the private sector starts to show signs of life, community colleges are seeing enrollments level off or slide.  (This piece from Illinois is pretty representative.)  State support is starting to return, too, though not at levels of, say, five years ago.  

You’d think this would be a good thing.  And in certain ways, it is.  In some states, including my own, increased state support has made it possible to freeze tuition and fees for the coming year.  After the rapid increases of the last few years, that’s great news.  

But it comes with an asterisk.  Since state support is a much smaller percentage of the budget than it was even six or seven years ago, even a healthy-looking percentage increase isn’t enough to help the college get ahead and invest in improvements when enrollments slip.  

Being the countercyclical balance wheel means veering from one direction to another.  It’s hard to plan for, and maintain, the kind of healthy, steady growth that allows for sustained innovation when the two major sources of revenue keep cancelling each other out.  Just when you start to get good news on one front, the other one disappoints.

It could be worse.  For-profits are much more subject to booms and busts, precisely because they have only a single revenue source.  When enrollments boom, life is good.  When they shrink, there’s no buffer.  That’s why some of them are closing abruptly, leaving students in the lurch.  But the fact that someone else has it worse doesn’t make this better.

In my perfect world, the news that enrollments are off from their peak would be a relief.  We’d be able to move from all-hands-on-deck to more experimentation and targeted improvement.  It would be a chance for us to address some longstanding issues, and to move forward in areas in which quality improvements require investment.  Grants enable some of that, which is terrific, but they’re sporadic and time-limited.  Philanthropy is helpful, too.  And efficiencies that can be gained internally can free up resources, but most community colleges are already running pretty lean at this point.  This is not where you find climbing walls, palatial dorms, or highly paid football coaches.  This is where you find cinderblock construction and crowded tutoring centers.

Keynesianism -- the idea of the public sector investing countercyclically -- has much to be said for it on a macro level.  But it’s hard to appreciate its wisdom on the ground when your momentum keeps getting interrupted by shifts in direction.