The Economy, Higher Education, and Campus Internationalization

By Hudzik, John K. | International Educator, May/June 2010 | Go to article overview

The Economy, Higher Education, and Campus Internationalization

Hudzik, John K., International Educator

A DECADE INTO THE TWENTY-FIRST CENTURY, three factors have a high probability of shaping the future of campus internationalization and global student mobility: (1) the current economic downturn on top of years of higher education budget problems, and this as a catalyst for structural challenge and change in U.S. higher education; (2) growth in global higher education capacity; and (3) a widened set of drivers for campus internationalization.

The depth and breadth of the economic downturn have led some to dub it the "great recession," certainly the worst downturn since the Great Depression, with very high unemployment, large losses in equity and housing markets, and growing public sector deficits and safety-net costs. All public sector revenue sources are under assault (e.g., income, sales, property, and capital gains tax revenues). More problematic, there were structural budget deficits at all levels of government prior to the recession and a return alone to economic health will not address these.

With education largely a function constitutionally reserved to the states, and because there is no national higher education system, state budgets heavily impact public higher education in the United States.

Historically, the worst years for state budgets have been the two years following the end of a recession. Large cuts in state budgets are expected through 2010 and additional cuts predicted for 2011 and perhaps 2012. More state cuts to higher education are likely, also forced partly by a transfer of available revenue to deal with growing safety-net needs and other recession-induced problems.

The current recession caps a 25-year period in which tuition revenue has grown as a proportion of total higher education revenue (from 25 percent to 37 percent on average) and state support of the total proportionately decreased, as reported by a State Executive Higher Education Officers (SHEEO) report in 2009. In the current downturn, SHEEO estimates that constant dollar appropriations per full-time equivalent student remained lower in 2009 than most years since 1980. Tuition increases substantially above inflation compensate for public support, and this almost certainly reduces access and induces cost-cutting "trading" behaviors (e.g., attending public rather than private or two-year rather than four-year institutions, and foregoing enriching experiences such as education abroad).

Consumers and higher education likely will focus increasingly on differentiating core needs from "addons" as costs increase and ability to pay declines. The lesson therein for internationalization is to move from campus periphery to core, or risk substantial marginalization in the competition for scarce funds.

Long-standing and immediate economic challenges put U.S. higher education at a crossroads. Most of the recent reactions constitute a "tactical retreat" in response to the speed and depth of the downturn (e.g., furloughs, across-the-board cuts, hiring, and spending freezes) and focusing on support rather than the academic units. Opinion remains divided about the capacity of U.S. higher education or its willingness to engage structural change. James Duderstadt, former president of the University of Michigan, building on the views of others, sees reform challenged by a system whose past achievements lull it into complacency about its future. The drag of maturity is a potent source of inertia.

Others foresee a "new normal" emerging that will force long-term structural and strategic change because further tactical responses will be insufficient and tuition cannot grow enough to take up slack. Rising pressure from Washington and elsewhere for higher education to enroll and graduate more students in the national interest and to do so without significant additional public support adds pressure for change. Globalization of higher education is likely to produce additional sources of pressure for change.

The Global Economy and Globalization of Higher Education

There is little indication that the economic downturn has affected global higher education growth, and also little evidence of an impact on student mobility. …

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