NC Budget and Tax Center

Budget Preview: Post-Secondary Education & Training Educated Workers, Engaged Citizens

North Carolina’s post-secondary education institutions—both public universities and community colleges—are the envy of other states.  The commitment to building these institutions in North Carolina was earlier than in most states. Throughout our history, their presence in our communities have supported big advances in the educational attainment of our population and strengthened our ability to attract and retain business.

Over the course of the Great Recession, North Carolina’s commitment to these institutions has begun to falter as demonstrated by reduced funding since the start of the Great Recession (FY2007-08) at the state level: 11 percent lower for public universities and 4.3 percent lower for community colleges.

State funding declines have impacted campuses and communities.  Tuition at UNC system schools has increased by nearly $1,000 in inflation-adjusted dollars over the decade, while community college tuition increased by $650.  These increases can prove prohibitive for students from low-income families where post-secondary costs in North Carolina already represent more than one-third of the household budget.  Student’s classroom experience has also suffered due to larger class size, fewer class offerings and less exposure to the equipment that can make job training for the 21st century relevant.

It is clear that the debate over post-secondary education will be a significant one this session and beyond.  As North Carolina figures out how to meet the demand for educated workers and engaged citizens, a focus on access, affordability and completion will be critical. The strategic direction committee for the UNC system has outlined a laudable goal of increasing student completion while at the same time presenting controversial strategies to get there including increasing on-line course offerings. The Governor’s comments denigrating a liberal arts education only made matters worse. What the strategic plan and its emphasis on training North Carolinians for the workforce means for community colleges and the relationship between these institutions is unclear.

What is clear is that both institutions prepare and train North Carolinians for participation in the economy and society, and as such, our collective investment to maintain their innovation is essential. As policymakers put together the biennial budget, here are a few things to look for:

  • First and foremost, have policymakers made significant progress to achieve at least pre-recession funding levels?  The bottom-line we will all be looking at is whether there has been a reinvestment in post-secondary education as in all areas of the budget.
  • Performance-based funding:  For both the university and community college systems, performance-based funding has been raised as a tool to encourage innovation and orient campus activity towards completion goals.  Last year the community college system developed new metrics to evaluate community college performance, whether those change further and whether more funds will be delivered via this mechanism will be important.  On the university side, performance-based funding similarly shouldn’t come at the expense of core funding for these institutions.
  • Need-based financial aid:  As tuition has increased, need-based financial aid has become increasingly important as a tool to ensure access and ultimately make certain that students have the financial support to complete their educational program.  It will be important to look for funding levels in both university and community college need-based aid programs as well as the source of funding, particularly the escheats and lottery fund allocations.
  • Student Supports: From child care subsidies to financial aid to transportation support, funding cuts and time restrictions have limited the ability of student supports to achieve their goal of supporting students to completion.
  • Back to Work Program:  Last year, the General Assembly provided just one year of funding for an important credential attainment program for the long-term unemployed.  Funding for this program was non-recurring despite the very real needs for training opportunities for those who have been out of work for 6 months or more.

This year’s budget process represents a crossroads of sorts.  Whether policymakers choose to invest in the education and skills training of North Carolinians for the jobs and challenges of the future can establish our trajectory to once again lead among the states.

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