A warning shot for traditional higher education

Arkansas’ traditional higher education institutions may be in for a rough ride in the coming years. State leaders, including the legislature and Gov. Sarah Sanders, are calling for greater belt-tightening and backing up that rhetoric with their funding commitments.

In the last fiscal session completed in early May, Sanders signed into law the legislatively-approved $6.3 billion Revenue Stabilization Act. That balanced budget touted a modest 1.76% increase, the smallest in over a decade.

For higher education, there was actually a cut of around $4 million from the previous fiscal year. A major reason for that was not the will of Arkansas lawmakers or the governor, but due to the funding formula for colleges and universities, which measures performance — aka retention (staying in school) and graduation (completing a degree).

Over the last five years, retention rates at four-year colleges have averaged in the mid-70% range, while two-year schools have seen high 50% to low 60% retention rates, according to the Arkansas Department of Higher Education.

Graduation rates trail by 25% to 50% among these schools depending on how you look at the statistics. Finishing in four years versus six years can affect the success rate among four-year schools.

Gov. Sanders fired a solid warning shot for higher ed in a late June interview with me. When asked about the reduction in funding for higher ed, which will result in tuition increases for students on many campuses, the governor explained:

‘I think of all the places that could tighten their belt. Higher education is certainly one. We pour hundreds of millions of dollars into higher education and, frankly, I think we need to focus a lot more on the outcomes than we are right now, and I would love to see us actually tighten the belt of higher education instead of throwing more money and getting less for it.”

Translation: Your performance metrics may cut your funding some, but I’m looking for other savings as well as statistical improvements.

One of Sanders’ early moves as governor was to configure a new state workforce committee. The group, which was heavy on industry participants, outlined broad goals for advancing education geared towards careers. There were a number of industries identified as needing workers to meet future demands.

They included aerospace and defense, advanced manufacturing, firearm and ammunition manufacturing, energy, forestry, food manufacturing, industrial maintenance, refrigeration and boiler, lithium mining and battery technology, precision agriculture, semiconductors, and steel manufacturing. More broadly, there will be growing demand in the areas of broadband, construction, engineering, healthcare, law enforcement, EMT and fire, IT, retail, entrepreneurship, skilled trades, tourism and the outdoor economy, transportation and utilities.

Sanders often talks about workforce training to meet employer needs. Those requirements can manifest themselves in greater investments in non-credit training for workers and more investment in two-year colleges that meet a host of training initiatives for regional employers.

I’ll let the colleges and universities fight for changes to the funding formula and work the legislature and governor for more funding. It’s a debate battle to watch in the next regular session.

A portion of that debate needs to center around incentives to recruit more students to fields where we know there are current and future shortages, and, yes, some of those shortages will come in jobs that require four year degrees and beyond. For example, we have a shortage of physicians in nearly every specialty you can imagine ranging from general practitioners to OB-GYNs.

Decades ago, the college motto used to be “if you build it, they will come.” That’s not the process now.

Without knowledge of where the opportunities exist and how to access them, students won’t come. Let’s hope our state leaders can develop a campaign to guide the right students into the right specialties at the right time to avoid a really wrong result.

Editor’s note: Roby Brock is the Editor-in-Chief of Talk Business & Politics.