States moderate FY2025 higher ed support, some propose reforms

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 February, Oklahoma Gov. Kevin Stitt announced a general plan that called for the consolidation of his state’s 25 public universities and colleges. He called on lawmakers to craft and pass legislation that would incentivize higher education institutions to fulfill state workforce needs; tasked the boards of regents to consolidate colleges that were not meeting workforce demands; and asked both bodies to remove redundancies in the state’s higher education system by consolidating some institutions.

Seemingly, a formal plan from the administration was not fully realized nor released beyond its initial announcement in the governor’s address. Subsequently, lawmakers established the Workforce Development Revolving Fund for the Oklahoma State Regents for Higher Education (Senate Bill 1193), which uses ARPA (American Rescue Plan Act) monies to increase the number of degrees granted to fulfill critical workforce needs and allocated $240 million for new engineering and science facilities at the University of Oklahoma and Oklahoma State University.

Pennsylvania Gov. Josh Shapiro also unveiled Blueprint for Higher Education, an ambitious plan to overhaul his state’s higher education system, which contained both budget increases and a consolidation of Pennsylvania’s community colleges and state university system under a single governance structure. 

While his proposal met with greater success than Oklahoma Gov. Stitt’s, Pennsylvania lawmakers did not agree to everything that Shapiro recommended. The state’s new Fiscal Year 2024-2025 budget, passed last month, included the governor’s recommended measures of a performance-based funding model for Pennsylvania’s four state-related institutions which receive some state money but largely operate independently, and funding increases of 6% for the state’s community colleges and public university system—at $15.7 million and $35.1 million, respectively. This new funding scheme is set to take effect in the 2025-26 year).

The new funding scheme does not unite the PASSHE and the Pennsylvania’s 15 community colleges as Shapiro had proposed. Instead, the budget creates a state board of education. The board of education’s mandate is to plan and advance higher education policies for the state and “provide greater support and coordination and ensure [the] institutions of higher education meet Pennsylvania’s workforce needs.” Per the administration’s press release upon signing the budget measures, Gov. Shapiro noted that the new budget makes and implements, “the first significant reforms to the state’s higher education in three decades.”

In South Carolina, lawmakers considered Gov. Henry McMaster’s recommendation that the state’s Education Oversight Committee—a nonpartisan committee composed of legislators, educators, and business representatives—oversee a systemic review of South Carolina’s 33 public institutions of higher education and provide an assessment of any advantages there might be to consolidating schools or programs; and, to re-evaluate the courses, degrees and certificates that are offered at the state’s public colleges and universities to ensure South Carolina is meeting its future workforce needs. While the House supported the study, it was not approved.

Few large wins supporting higher ed’s role in economic and workforce development

A signature program in Idaho—Launch Idaho—implemented last year by Gov. Brad Little to assist high school graduates to enroll in either an education or training program that aligns with Idaho’s in-demand careers while providing in-state industries and businesses with a pipeline for skilled workers and a specialized workforce, faced intense opposition in the House, before state lawmakers agreed to fund the administration’s program request.

In December 2023, when Virginia Gov. Glenn Youngkin presented his recommended FY 2024-2026 Biennium to lawmakers, he also announced a proposed joint economic development and higher education initiative of slightly less than $100 million to grow high-wage high-tech jobs in Virginia’s emerging “research triangle. ” This initiative would focus on the biotechnology, life science and pharmaceutical manufacturing industries through a network of the state’s research universities and associated partnerships. Originally envisioned as a cooperative initiative among Virginia Commonwealth University, Virginia Tech, and the University of Virginia, the triangle was expanded to include Old Dominion University during the 2024 General Assembly session Approved funding would establish the “Biotechnology, Life Sciences and Pharmaceutical Manufacturing Network” in Virginia, with the partnering research universities and the state’s Virginia Innovation Partnership Authority (VIPA) to collaborate on commercialization and startup support. Per an overview of Virginia's Biennial Budget for FY 2024-2026, compiled by the VA House Appropriations Committee staff, state lawmakers finalized the Network with a $114 million appropriation in May, and Virginia's HB6001 (Budget Bill) directs both the funding and associated MOUs between the universities and the VIPA.

Expanding free community college programs

 About two-thirds of states offer some type of free community college program, and state lawmakers  continued to advance those programs. Last month, Massachusetts lawmakers unveiled and passed a budget that expands the state’s current free community college program—MassReconnect—to all state residents, regardless of their age. The newly authorized MassEducate program builds on MassReconnect—Gov. Maura Healey’s initiative to make community college free for students aged 25 and older, and which drove a 45 percent increase in state enrollment for this age group last year. In Healey’s FY 2025 budget proposal the administration requested $24 million, a 20% increase in funding, to continue MassReconnect. Lawmakers instead chose to expand tuition-free community college availability to all residents. The budget sets aside more than $117 million for the MassEducate program, and will be covered by revenues collected under the state’s high-earner or “Millionaire’s Tax,” a special levy on anyone making $1 million a year or more in the state. Additionally, lawmakers appropriated $14.7 million into the state’s SUCCESS program, currently in place at Massachusetts’ 15 community colleges, which provides funding and assistance for wraparound services and resources for students. Lawmakers appropriated another $14 million to expand the SUCCESS program to include the state’s universities. Gov. Healy celebrated the creation of MassEducate in her signing of the budget on July 29.

On July 23, Michigan Gov. Gretchen Whitmer signed the state’s education spending plan. As part of Michigan’s new FY 2025 education budget, lawmakers passed and funded Whitmer-recommended initiatives that either create or expand Michigan’s tuition-free community college programs. Earlier this year, the governor called for a no-cost community college for high school graduates in her State of the State address. Building on the Michigan Reconnect program, which offers tuition-free community college for adults 25 and older, and last year was re-authorized to temporarily lower the age requirement to 21, the state will launch a new free community college program, the Community College Guarantee program, for recent high school graduates this fall. The new initiative will cover tuition costs and fees for graduating high school seniors to earn a degree or skill certificate at a local in-district community college. The program also will allow students to choose to attend a community college in a different area than where they currently live, but they will have to pay out-of-pocket expenses to cover the difference between in-district and out-of-district tuition.

A proposal that would implement a labor-market driven model of community college programs in North Carolina languished when lawmakers could not agree to surplus spending in the FY 2025 budget adjustment to the state’s two-year spending plan passed last October.