Study finds Oregon lacks clear vision for future economic development, role of higher education

By Meerah Powell (OPB)
Oct. 27, 2022 11:19 p.m.

Key points of the study include the need for more affordable access to college and more state funding for higher education

Oregon lacks a clear vision. That’s the conclusion of a new, nearly 100-page report when it comes to the state’s economic development plans and how higher education institutions throughout the state fit into that picture.

Last year, Oregon Gov. Kate Brown encouraged the state’s public colleges and universities to undergo a comprehensive study in order to get recommendations for financial stability and ideas on how to strengthen the higher education system in the state.

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The Oregon Community College Association and the Oregon Council of Presidents hired the National Center for Higher Education Management Systems, a private nonprofit, to undertake the study.

The report, widely released Thursday, says Oregon has a lot of work ahead of it to stabilize its higher education landscape and future workforce. Key points include that students need more affordable access to college, and the state needs to shell out more money to support that endeavor.

“Oregon’s public institutions are caught in a financial bind,” reads a line on the first page of NCHEMS’ report. “In comparison to other states, Oregon underinvests in higher education; this is particularly the case in its funding of four-year institutions.”

Oregon, like other states throughout the country, has suffered from falling college and university enrollment — a trend that started before the pandemic but continued, and intensified, throughout it.

The report from NCHEMS says with fewer traditional college-age students in the years to come, Oregon colleges have two main paths to grow enrollment: improve high school graduation rates — and more successfully funnel those graduates into college — and increase college participation for older adults.

“But the bottom line is that tuition revenues alone will not pay for the investments needed to create a better Oregon,” the study reads.

The community colleges and public universities that commissioned the report said Thursday they agree with the key themes NCHEMS identified.

“The study clearly demonstrates that colleges and universities are integral to creating a prosperous and equitable economy that would be advanced by targeted and bold state investments in our students and higher education, in general,” Nagi Naganathan, President of the Oregon Institute of Technology and Chair of the Oregon Council of Presidents, said in a statement, agreeing to find strategies to implement the report’s recommendations. “[W]e are committed to increased collaboration with each other and with other key state stakeholders to build a Better Oregon with focused attention to affordability, equity, and prosperity of our state and all Oregonians.”

NCHEMS recommended a number of actions Oregon could take to improve its higher education and workforce landscape. Those include ensuring that Oregon policymakers and higher education institutions are working together more effectively to reach agreed-upon goals, continued focus on equity in access to higher education and “rebalancing the funding responsibilities for higher education in the state so that the students pay a smaller share and the state a larger share.”

But, more broadly, NCHEMS said in its report that it thinks Oregon needs to do a better job of clarifying its priorities and goals, especially when it comes to economic development.

NCHEMS said that requests for more state funding toward higher education will come across as self-serving on the part of colleges and universities unless they are framed in the context of working toward those priorities.

“At this moment, there is no widely shared vision for the future of Oregon, nor a statewide economic development plan, that provides that context,” NCHEMS wrote.

Oregon’s higher education reality

The NCHEMS report states that the proportion of younger adults in Oregon, ages 25-34, with a postsecondary degree is well below the national average. The rate at which Oregon students who graduate from high school go directly onto college is also among the lowest in the country, according to the report.

In many other aspects of higher education, Oregon is trailing.

According to data from an Oregon Higher Education Coordinating Commission report last year, Oregon ranked 34th in the nation in its investment into higher education.

Even though state funding has increased by more than 40% in the last 10 years, the state still falls 19% below the national average, according to that HECC data. While the U.S. average for state contributions toward higher education per full-time enrolled student is about $8,660, Oregon’s was about $7,000 in 2020.

Due to Oregon’s lower state investment, the cost of tuition has been steadily increasing to fill that gap. According to HECC data, in the 2020-21 school year, Oregon had the highest average tuition for residents at four-year institutions out of all western states.

Many of the points made in the NCHEMS report have been laid out by the Oregon HECC in years past. But HECC Executive Director Ben Cannon said it’s helpful to have that validation from outside experts.

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“I’m hopeful that the effect of [NCHEMS’] work will be to increase the public and policymakers’ commitment to Oregon higher education, increase their understanding of the opportunity that we have by investing in higher education to build the economy and increase social and economic mobility,” Cannon said.

Cannon said the HECC has done a lot of work over the years to build a shared vision within Oregon higher education to create strategies for increasing student access, affordability and completion, but he agrees with the report’s recommendation that there needs to be work done more broadly on the state level as a whole.

“I think that the authors of the report point to the need for a larger conversation and set of strategies by Oregon leaders, in their view principally focused on economic development, that would draw out the importance of higher education,” Cannon said.

The report notes that’s a conversation that may be best led by people outside of higher education, such as through a commission charged with creating an economic development vision.

“Developing the statewide vision is a task beyond the purview of the HECC,” the report reads, “because the vision cannot be created from within higher education, and it cannot be perceived as being a vision for higher education. Rather, this task requires leadership, engagement, and buy-in from major industry, political, and opinion leaders within the state.”

Cannon said he agrees with the report’s recommendation that such work shouldn’t be the responsibility of the HECC.

“The HECC are not economic development experts,” Cannon told OPB. “We certainly believe that higher education has a lot to contribute to the state’s future economy, but the report’s recommendation for a blue ribbon commission to develop economic strategies for the state of Oregon and highlight higher education’s role in reaching those draws from what other states have done, and I think it’s an interesting and important recommendation.”

What the state is already doing and what it needs to do

The HECC submitted its requested budget for the upcoming 2023-25 biennium to the state earlier this year. That includes a requested funding increase for higher education of more than 35% or roughly $1.4 billion more than the current budget.

The HECC wants some of that money to go to financial aid programs such as continuing the new Oregon Tribal Student Grant and increasing funding for longer-standing aid programs, such as the Oregon Opportunity Grant and Oregon Promise. The agency’s requested budget would also make sure the state’s public colleges and universities are sustained, and it also addresses requested capital projects.

That budget won’t be discussed until after Oregon elects a new governor and she comes out with her recommended budget.

But, at the end of the day, NCHEMS said Oregon higher education institutions can’t rely solely on more state funding to solve its problems. More work needs to be done structurally to improve outcomes for students, and to improve college-going rates in general.

The report said colleges and universities in Oregon must work to improve their retention and graduation rates by making efforts to help students who are already enrolled and might need assistance to make it to graduation.

Oregon institutions should also take steps to encourage enrollment of students who chose work instead of college when they left high school.

“This will require not only recruitment strategies that make the economic case to these students, but changes in academic offerings so that these potential students can find programs that cater to their desire to get into well-paying jobs quickly,” the report reads.

Colleges must also find ways to create more flexibility for students, so they can work and go to school at the same time without it feeling like an “either/or choice.”

The report said Oregon’s colleges and universities should also be working more closely with public schools to improve their graduation rates in order to funnel those additional students into higher education.

“Since each of the universities has teacher education programs — and ties to the public school system — it is in the institutions’ self-interest to assume more responsibility for the success of these schools,” the report said.

Though the report highlighted some findings the HECC has already published, Cannon said there were some new recommendations that intrigued him.

One was for developing better reports on affordability at individual institutions. Another was a discussion of the role that out-of-state students should play in determining state funding.

Currently, the state only counts Oregon resident students when calculating how higher education funding is distributed.

“[The report] recommends that we take another look at that and recognize the contribution that out-of-state students make if they end up staying in or getting jobs in Oregon and contributing to the economy,” Cannon said. “I think that’s something that we haven’t thought about for a long time, and I think that’s a maybe surprising recommendation that we would want to understand better and have some conversation about.”

The report notes that increased investment in higher education could help the state in a number of ways, including funneling more tax-paying residents into high-wage jobs in a state that relies heavily on income tax.

“Oregon is not taking full advantage of its major intellectual assets, its colleges and universities, to create a more prosperous, equitable, and attractive state,” the report said. “Creating such a state will inevitably require additional, targeted investments in its postsecondary institutions. But more important, it will require creation of a common vision for the nature of that desirable future state.”

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