COVID-19 Crisis Reveals Overdue Need for New Way to Fund Higher Education

David Tandberg
8 min readJun 25, 2020


By David A. Tandberg and Christian K. Anderson

The word “crisis” has been overused to the point of making it nearly meaningless. And yet, here we are, in a crisis that defies hyperbole. The impact of the coronavirus (COVID-19) pandemic is deep and broad, and its damage to higher education will be profound unless we act now. This is true for obvious reasons, but also true for reasons that may be less apparent but no less important. Without significant reinvestment in our public higher education systems, we risk not only the welfare of our colleges and universities but, ultimately, the very society they support.

Since the early 1900s, higher education’s position in our society has grown. Total enrollment and participation rates and the overall size of the enterprise have increased dramatically. Higher education has increasingly become a form of glue, holding us together and providing critical services, while many other social institutions have declined. Given its large and expanding role in our society, we propose an immediate large-scale federal investment in our public colleges and universities to ensure they are properly positioned to help pull our country out of the COVID-19 crisis and then an on-going funding partnership between the federal government and states to ensure the long-term positive impact of higher education.

Clark Kerr, former president of the University of California system, observed in 1963 that the university was no longer a cloistered city on a hill, but instead a central actor in society, “a prime instrument of national purpose.” He predicted that, “What the railroads did for the second half of the last century, and the automobile for the first half of this century, may be done for the second half of this century by the knowledge industry: that is, to serve as the focal point for national growth.” What Kerr predicted has come true.

Colleges and universities provide economic development, upward mobility, and secure jobs, and sustain cities and towns even as manufacturing plants exit. Land-grant universities provide critical agriculture and rural development services. For many communities, universities provide essential (and sometimes the only) access to health care. Furthermore, college graduates with a bachelor’s degree will make, on average, close to one million dollars more over their lifetime than someone with only a high school diploma. They will also pay more in taxes, be less likely to depend on social services or be imprisoned, and be more likely to vote, volunteer, and have health insurance.

While some countries depend on government labs for research and development, the U.S. centers research and development activities in its universities. This research has produced critical advancements in technology, medicine, national security, communications, agriculture, economics, and energy. Much of what we depend on to keep us alive and to sustain and improve our quality of life has its roots in discoveries made in universities. Our position in the world economy as a major superpower is tied to the research and development activities of our major universities.

The benefits of higher education permeate most aspects of our lives — in fact, we are all deeply dependent on it. It benefits everyone, and the “return on investment” is tremendous. Such benefits are essential to our ability to respond to and recover from COVID-19 and to our ability to secure our prosperity moving forward.

The well-being of our society is directly tied to the well-being of our higher education system. This is particularly true of our public colleges and universities. They serve close to 75% of our students, have a specific public mission, and remain our most accessible institutions. They include our land-grant universities, community colleges, locally focused regional universities, minority-serving institutions, and large research universities. They were founded, designed, and are funded for the purpose of advancing the public’s interest. However, this is all very much at risk.

While the demands on our higher education system will not go away, higher education’s capacity to meet the current demands may. The pattern over the last several recessions was one of successively deeper cuts in state funding for public higher education followed by successively smaller recoveries. This downward trajectory in state support is concerning by itself, but the pandemic crisis dramatically amplifies the threat. COVID-19 presents a clear danger to our public higher education system. Our institutions are faced with the triple threat of unanticipated and significant pandemic-related costs, major reductions in revenue, and unpredictable student enrollments. Some projections put the total financial impact at over $100 billion. This will likely force the closure of some institutions, seriously reduce the capacity of others, and keep some students from graduating and others from enrolling.

Our public colleges and universities are facing state budgets that will result in unprecedented cuts in state funding, which will inevitably lead to more hikes in tuition, making college even less affordable and pricing out many students. These cuts will come after a decades long downward trend in state funding and a system of institutional support that has favored “elite” institutions but disadvantaged other institutions. State funding cuts have disproportionately hurt our broad-access colleges and universities that are more dependent on state funding and which enroll the lion’s share of our lower-income, first-generation, Black, Latino, Native American, and other minoritized populations. And money matters: increased resources are tied to increased student completions and enrollments, graduation rates, research production, and employment outcomes.

The ongoing underfunding of higher education, exacerbated by the current crisis, means we are losing out on much that our public higher education system can offer. We must provide an immediate major infusion of new money to help offset pandemic-related costs and reduced revenues in the form of new federal funding. We must then produce a new, longer-term, funding strategy for public higher education going forward. If we do not, the current benefits we receive from our public higher education system will disappear, and every aspect of our society and economy will suffer.

This crisis presents us with the opportunity to reimagine the America and the public higher education system we want and need.

Neither will be possible without a robust, adequately funded, public higher education system. We must have a vision, a defined strategy, an understanding of what it will cost, and a level of public investment to match. The limitations of state budgets mean that states cannot do it alone. We need to create a federal-state partnership where the federal government matches new state investments in their public colleges and universities up to a predetermined point. Under this plan, states would be incentivized to increase their funding of higher education. Appropriate restrictions would be needed on the use of the federal money in order to focus on specific priorities, like reducing the cost to students, expanding student access and success, addressing crumbling infrastructure, and improving the quality of instruction. It is now more important than ever to understand that public higher education is one of the few areas in government where public expenditures are actually investments that offer a direct return.

A close analogy to the current situation is the influenza pandemic of 1918. Many colleges and universities canceled classes. Thousands of students became ill, and many died. Unlike today, there were no online distance learning options. Colleges and universities also canceled sports seasons, curtailed social events, and required physical distancing. In the past weeks, we have seen announcements of closures of colleges and seen other institutions cutting or furloughing staff and faculty. By contrast, higher education was growing one hundred years ago and becoming much more important as a public service as states realized the advantages that came with a strong public college system. Even World War I and the flu epidemic could not slow this upward trajectory. Between 1915 and 1925, college participation doubled, and the number of institutions grew significantly from 951 in 1910 to 1,409 by 1930.

How was higher education able to continue to thrive despite the influenza? One reason is that financial state support was robust. The percentage of a public university’s budget coming from the state was, on average, nearly 65%, and in some cases, more than 90%. By contrast, these same institutions now receive an average of 16% of their operating budgets from the state and many receive less than 10%. College was seen increasingly as an important public good and not merely as a private benefit for the few who could afford it. Higher education cannot lose more ground as a public good; it cannot return to a time when it served only those who could easily afford it.

The Great Depression provides another useful analogy to the current situation. The federal response, via The New Deal, provides lessons for how higher education can serve as the driving force for our nationwide response to the COVID-19 crisis and the associated economic downturn. The New Deal used the federal government’s ability to spend, develop programs, and dispatch those resources and programs across the country in order to create jobs, spur innovations, and stimulate the economy. There appears to be little appetite for such an expansive role for the federal government in the response to our current crisis. However, with appropriate investment, higher education is positioned to help respond to the COVID-19 crisis and to pull us from our current economic decline. The infrastructure and talent are there. Higher education’s capacity for economic stimulation, proven return on investment, and ability to mobilize people have been established. The federal government ought to invest in and use our higher education system as a center piece of its COVID-19 response and then continue to invest in it in order to continue to benefit from all our colleges and universities have to offer.

Higher education has been there for our country through two world wars, the Great Depression, the Great Recession, and many triumphs and tragedies in between. We are now more dependent on it than ever before. The question now is: Will we support our colleges and universities? And will we do what must be done to fully realize all that higher education has to offer? In 2001, Clark Kerr wrote, “Higher education has been very resilient in turning fears into triumphs. I expect that this will continue.” We entirely agree with the first part of his statement. The second part is now very much in question — but it can continue to be realized if we make it so.

David A. Tandberg, Ph.D., is senior vice president for policy research and strategic initiatives at the State Higher Education Executive Officers Association. Christian K. Anderson, Ph.D., is an associate professor of higher education at the University of South Carolina

Originally published at on June 25, 2020.