Stimulus for America’s Community Colleges

Alan Berube and
Alan Berube Interim Vice President and Director - Brookings Metro

Sara Goldrick-Rab
Sara Goldrick-Rab Associate Professor of Educational Policy Studies and Sociology - University of Wisconsin-Madison

February 3, 2009

Many people in the education sector are rooting for the economic recovery package now working its way through Congress.

That’s because the package’s education component—an estimated $150 billion in the House plan—represents a central part of the Obama administration’s efforts to lay the groundwork for future economic growth. These investments can produce tremendous returns, driving long-run employment and earnings gains, and increasing the chances that future generations will become well-educated.

When it comes to investments in higher education, however, President Obama and congressional leaders should exercise focus. Resources should be targeted in ways that stimulate enhanced educational attainment, and close disparities in degree completion.

To that end, the recovery package—and future federal higher education policy—must do more to help transform America’s community colleges.

Faced with high tuition costs, a weak economy, and increased competition for admission to four-year colleges, students today are more likely than at any other point in history to attend one of the nation’s 1,100 community colleges. Annually, community college enrollment is increasing at more than twice the rate of that at four-year colleges, by 2.3 million students in the first half of this decade alone.

The rise of these institutions reflects their important roles in training workers, especially first-generation college students, for well-paying, high-demand jobs and in providing students a bridge to even higher levels of education.

We need to get more out of the system, however. Columbia University researchers estimate that the community college dropout rate is 50 percent. Despite the fact that community college degree and certificate holders earn considerably more than workers with only a high school diploma, just one-third of students who entered a community college in 1995 completed a degree of any kind by 2001. With many of the fastest-growing occupations requiring some post-secondary education, but not necessarily a bachelor’s degree, serious challenges await if community college performance does not improve.

Part of the problem lies in the way we fund community colleges. Owing to their historical role in serving local labor markets, community colleges are hampered by a heavy financial dependence on states and localities, where negative budget outlooks today portend deep funding cuts. Moreover, they are funded primarily based on enrollment, without regard to whether their students earn degrees or get good jobs. This gears community colleges’ incentives toward inputs and process, rather than outcomes like student success.

Given the critical function of community colleges for meeting our nation’s future economic needs, the federal government has a responsibility to improve this state of affairs. Its current role is limited; community colleges receive less than 30 percent the level of federal government support provided to four-year colleges.

A forthcoming paper from the Brookings Institution proposes a major shift in this relationship. It calls for four key federal reforms: a new focus on national goals for the two-year sector guided by a first-ever accountability system; expanded federal funding to help community colleges meet these more ambitious goals; stimulating greater innovation in community college policies and practices to enhance educational quality; and developing student data systems that enable crucial tracking of outcomes. As recognized by ambitious initiatives such as the Lumina Foundation’s Achieving the Dream project, a “culture of evidence” focused on student achievement—when coupled with capacity-building efforts to make success possible— can have a rapid and transformative impact.

On funding, the federal government should double its current level of direct support for community colleges, from $6 billion to $12 billion, in order to account for 30 percent of their budgets. Resource needs, especially for infrastructure, technology, and faculty, are significant and pressing.

Since 1974, only 149 new community colleges have been built, and many campuses today are bursting at the seams. While community college students tend to enroll part-time, even these students require space in which to learn. In the first two years, this spending would amount to just 1.4 percent of the proposed costs of the recovery package, and would support infrastructure upgrades that truly stimulate the economy. Over the longer term, it would add modestly to federal higher education expenditures, but would ensure that our nation realizes an economic payoff from increasing enrollments.

The federal government should not simply expand funding, but use these new resources explicitly to promote greater success for community college students. Colleges receiving enhanced funds would be required to track and report student results, such as completion of a minimum number of credits, earning a degree, and landing a good-paying job. Over time, a majority of federal dollars would be awarded based not on enrollment, but on colleges’ performance on these critical measures.

Our community college system, long on the sidelines in funding and policy debates, now needs a seat at the table. Ensuring that American workers are trained to compete in the global marketplace, to earn a place in the middle class, and to fulfill their responsibilities as citizens requires expanding and improving their experience with postsecondary education. By better supporting the affordable and accessible higher educational institutions found within all of our communities, and asking more of them in exchange, we can put our nation and its families back on the path to economic prosperity.