Part one of a two-part article.

To compete with other states and globally, Idaho’s economy needs a skilled workforce. Postsecondary education is the key to developing those skills to innovate and thrive. Education also helps raise the quality of life of workers who receive schooling as well as for their families. Recognizing rising skill levels for many jobs and the importance of higher education in making the Idaho economy competitive, the Idaho State Board of Education set an ambitious goal for 60 percent of Idahoans 25 to 34 years old to have a degree or certificate by 2020.

To achieve this goal, Idaho’s public schools must increase student enrollment and retention. But they will be facing some headwinds. Throughout the United States colleges are under economic pressure, and a growing number of private schools are likely to face bankruptcy as pressure mounts as noted in a recent Wall Street Journal article, “Student Drought Hits Smaller Universities,” dated July 25, 2014.

Global competition is intensifying. The United States was the world leader in educational attainment until the 1990s. In recent years, many countries have been producing degree-holders at a higher rate. In 2011, 42 percent of Americans ages 25 to 34 had associate, bachelor’s or advanced degrees, according to the Organization for Economic Cooperation and Development. The U.S. lagged South Korea’s 63 percent, Japan’s 58 percent, Canada’s 56 percent, Ireland’s 48 percent, Britain’s 48 percent, Norway’s 47 percent, Luxembourg’s 46 percent, New Zealand’s 45 percent, Israel’s 44 percent and Austria’s 43 percent. In the United States, the public-private balance of expenditure on postsecondary education is nearly the reverse of the average across other OECD countries. In the U.S., public sources provide 36 percent of spending on higher education while the other nations average 68 percent.

And Idaho lags the nation. About 35 percent of Idahoans ages 25 to 34 have earned associate or higher degrees, according to the Census Bureau’s 2012 American Community Survey. Idahoans are not likely to catch up in the next few years. Some 43.4 percent of Americans ages 18 to 24 were enrolled in college or graduate school in 2012 while only 37.3 percent of Idahoans were.

Decreased Public Support

Over the past 30 years, government support for public colleges has declined in most states including Idaho. The long-term slide was intensified by cuts in spending after the recession began in December 2007. Although state funding for higher education rose in absolute terms over the past 25 years, it did not keep up with inflation and increasing enrollment. When adjusted for inflation and measured per student, state spending on instruction at public colleges is at its lowest level since 1980, according to State Higher Education Executive Officers Association.

State funding for higher education remains far below prerecession levels in most states. Only two – Alaska and North Dakota – saw increases in per-student spending between fiscal year 2008 and fiscal year 2014. Nationwide, state spending on higher education fell 23 percent, or $2,026 per student. Idaho’s public colleges took the sixth most severe cut among the 50 states. When adjusted for inflation, Idaho’s state spending per student fell 36.8 percent, or $3,857, according to the Center of Budget and Policy Priorities.

Idaho’s state funding for higher education has declined as a percent of the total general tax budget from 15.7 percent in fiscal year 1990 to 9.6 percent in 2014.

Steep Rises in Tuition

With the onset of the recession, public colleges and universities across the country increased tuition to cover declining state support and rising costs. After adjusting for inflation, annual published tuition at four-year public colleges rose $2,028, or 32 percent between the school year ending in the summer of 2007 to the school year ending in the summer of 2014.

Tuition hikes have accelerated the long-term decline in college affordability as costs shift from states to students. While federal student aid and tax credits also rose, they fell short of covering tuition increases.

Idaho’s public four-year colleges had the 11th highest tuition increases among the 50 states from 2007-2014. While inflation rose 15.5 percent between the school years that ended in the summers of 2007 and 2014, in-state tuition and fees rose 53.8 percent at the University of Idaho, 50.6 percent at Boise State, 49.2 at Idaho State and 44.2 percent at Lewis-Clark.

The tuition increases, as state aid declined, mean individuals are bearing increasingly more of the costs of higher education. Over the past 25 years, the share of public university revenues coming from tuition and fees climbed to 48 percent in 2013 from 24 percent in 1988. Just 12 years ago, students picked up one-third of the tab while states paid the rest. If the trends continue, students will pay more than half the tab in a few years.

Idaho is one of the 25 states where the state still picks up more than half the undergraduate tab. In 2012, the state picked up $5,434, while students paid $3,195.

Increasing Enrollments

College enrollments surged across the nation – and Idaho – in the past 10 years, partly because the college-age population increased and partly in response to the recession. The U.S. population of 18-year-olds peaked in 2008 as the “baby boom echo” came of age. The baby boom echo occurred around 1990 when a record numbers of babies were born to baby boomers. As employment opportunities fell after the recession struck, more students graduating from high school decided to go to college while older workers entered classrooms to retool their skills.

In the past two years, college enrollment dropped as the recovery brought more jobs and as the population turning 18 declined. The number of 18-year-olds in the U.S. declined 6.6 percent between 2008 and 2013. Idaho also saw a drop in graduating high school seniors in the past two years. Enrollment at all of Idaho’s four-year institutions decreased between the fall of 2012 and the fall of 2013.

Changes in federal financial aid policies also played a role in curtailing enrollment. The federal government reduced accessibility to aid, increased interest rates on loans and tightened the lifetime of Pell grants. In addition, stricter requirements made it more difficult for students to change their majors and continue to be eligible to receive federal financial aid.

The steep rise in tuition and fees since the recession began and fears about student loan burdens may also be depressing college enrollments. College enrollment fell from a peak of 20.4 million in 2011 to 19.9 million in 2012, then dropped to 19.6 million in 2013, according to the National Student Clearinghouse.

Idaho schools are trying to supplement federal financial aid in various ways. Idaho State University started its own internship program called Career Path. About 420 students work on or off campus, earning an hourly wage while gaining experience in their chosen career fields. Many of Idaho’s colleges and universities are relying more heavily on their individual foundations to generate money that can be awarded as scholarships to students who may not qualify for federal financial aid. University of Idaho is engaged in a $225 million capital campaign with about a quarter of the money to go toward scholarships to expand access to financial aid.

Potential for Growing Enrollments

The University of Idaho hopes to increase its enrollment from approximately 11,000 to 15,000 over the next 10 years. It hired an expert to institute an aggressive enrollment-management strategy. College officials say much of the growth is expected to come from in-state high school graduates, who are currently not seeking postsecondary education.

Google helped the University of Idaho with a free three-month development and strategy campaign to produce pop-up advertisements based on the behaviors and the browsing history of users who show interest in higher education. After the campaign began in late 2013, there was a 75 percent increase in new visitors to the university’s website. Last September the university website also launched Degree Finder, a specific breakdown of the degrees offered, and it increased requests for information. The university is also working on connecting to students through social media outlets by creating Facebook pages and groups for student interaction.

A changing demographic pattern means American colleges will be competing more forcefully for new students. The U.S. youth population peaked a few years ago when the “baby boom echo” was strongest – the number of babies born to baby boomers was at its highest about 22 years ago – and has declined since. After growing since the late 1990s, the number of 18-year-olds in the U.S. peaked in 2008 and then declined 6.6 percent by 2013.

While the U.S. population ages 15 to 24 grew 6.1 percent between 2003 to 2013, Economic Modeling Specialists International projects it to fall 6.1 percent between 2013 and 2023. Idaho’s youth population also grew 6.1 percent between 2003 and 2013 and is projected to grow another 5.5 percent in the next decade. Still Idaho’s 15-24 population in 2023 is projected to be 2.7 percent below its 2009 peak.

To significantly increase enrollments, colleges must sign up students who traditionally have not gone to college. Students who are the first generation in their families to go to college need more assistance in navigating the enrollment process. Many will have fewer financial resources than students from families with longer traditions of attending college so greater emphasis must be placed on retention. The largest source of new students in Idaho is the growing Hispanic population. While Hispanics made up 9.6 percent of Idahoans 15 to 19 years of age in 2000, today they make up 16.4 percent.

Increasing the Number that Go On to College

Although Idaho has a high rate of high school graduation, it has a very low percentage of high school graduates going on to college. About 52 percent of Idaho’s 2013 graduating class enrolled in two- or four-year colleges, according to the National Student Clearinghouse. More than 6,500 high school graduates enrolled in Idaho colleges while another 2,400 went to out-of-state schools. The go-on rate was down from 54 percent the year before, probably because of improved job prospects for high school graduates. Idaho’s go-on rate is considerably below the nation’s 63 percent, and the State Board of Education has set a long-term goal that 80 percent of Idaho’s high school graduates enroll in postsecondary programs within a year of receiving their diplomas. The J.A. and Kathryn Albertson Foundation provides grants to 21 Idaho schools to help students understand the necessity of career planning and postsecondary education. The foundation has also run advertisements encouraging students to “Go On.”

Wooing International Students

American schools increased their efforts to recruit international students, who pay higher out-of-state tuition while increasing diversity and cultural awareness on campus. The Institute of International Education reported in its annual Open Doors report the number of international students studying in the United States reached an all-time high of 819,644 in 2013. That was the eighth year in a row the number rose after a few years of decline after the September 2001 terrorist attacks. In the last 10 years, the number of international students in the U.S. increased 40 percent. China is the biggest source of new students and now has the largest contingent of students in the country. Combined with students from India and South Korea, these three countries account for 49 percent of the total number of international students in the United States. No other country makes up more than 5 percent of the total.

In 2014, there were 3,247 international students studying in Idaho. The U.S. Department of Commerce estimates their spending had an economic impact of $72 million on the state. In 2010, the University of Idaho opened four offices in China for recruiting students. China is the second largest source of international students for Idaho institutions behind Saudi Arabia.

Part two of this article will cover why some high school students do not pursue postsecondary education and the programs and methods of increasing those numbers.

Kathryn.Tacke@labor.idaho.gov, regional economist
(208) 799-5000 ext. 3984