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.

State support for higher education in the United States over the last four decades can best be characterized as having fluctuations and shifts in priorities. Using fiscal year (FY) 1980 as a starting point, while overall state support for higher education has grown, it has done so with volatility driven in part by decreased revenue as a result of recessions, and it has frequently taken years for state support to recover to pre-recession levels. In four states, state support on a constant 1983-dollar basis is still less than was spent in 1980.

The short answer to the question, “Is college still worth it?” is, “It depends.”

Attending higher education institutions may impart an array of societal and personal development benefits. Still, one factor of increasing import that raises the question of the worthiness of attaining a college education in a market-driven economy is the personal cost involved. The question becomes even more pertinent based on three trends: rising costs, decreasing employment opportunities for college graduates and a fair share of Americans having little or no confidence in higher education. 

In fiscal year (FY) 2023, federal obligations for science and engineering (S&E) to universities and colleges totaled $49 billion—$29 billion more than FY 2000, and a 10% increase from the prior year. The growth is less rapid when adjusted for inflation (2017 USD), with just over $40 billion in real obligations in FY 2023, a 5% increase over the year prior and $12.6 billion (or 46%) increase over the FY 2000 value.