State Recommendations

This section highlights actions and policy changes state actors can take to help more students earn credentials beyond high school after the pandemic. In recent years, many states have established attainment goals to increase the number of residents holding credentials of value beyond a high school diploma. Many have identified closing educational attainment gaps by race and ethnicity as a priority in their attainment goals, yet the COVID-19 pandemic has the potential to derail the momentum many states have gained.¹

As the higher education sector recovers from the COVID-19 pandemic, states will play a critical role in ensuring the return to normalcy proceeds as smoothly as possible. At the state level, different actors play separate yet important roles. State legislatures appropriate funds to institutions and students as well as enact enabling legislation for higher education agencies and state authorizers to carry out their responsibility of protecting students. Governors can set policy agendas that prioritize college access, affordability, and accountability. SHEEO agencies not only play a critical role in providing data, guidance, and information to these policymakers but are also responsible for enforcing consumer protections and coordinating the state’s higher education enterprise. The recommendations below outline actions for each of these state actors to take to ensure postsecondary education remains accessible, affordable, and high-quality as students return to campuses.

Reallocate Appropriations to Support Colleges that Serve the Students with the Most Need

In many states, colleges that serve financially better-off students also receive more state funding. While open-access institutions like community colleges and regional four-year institutions spend only around $15,000 on academics per full-time student, highly selective colleges spend more than $52,000 per student.² This results in resource inequities for the students who need the most support. During the pandemic, these inequities have been exacerbated, as many Black, Latinx, and low-income students have struggled to find support to stay enrolled. States should reallocate or add resources to give more support to colleges that serve low-income students and students of color.

Maintain or Increase Direct Appropriations to Institutions in Order to Ensure Appropriate Levels of Support and Services for Students

Greater state funding for higher education results in more students completing college degrees.³ But it can be easier to find political will to fund student financial aid programs than to budget for direct aid to public colleges. As some states see constrained budgets due to the economic impact of COVID-19, they should resist the temptation to cut direct appropriations to colleges in order to fund financial aid. Colleges need consistent public support to provide adequate education to students and vouchers alone make that level of funding difficult to maintain. At the same time, public colleges use state funds to keep in-state prices low for students. This low price point can help convince more students that they can afford higher education without having to calculate aid eligibility.⁴

Be More Equitable with Student Financial Aid

Coming out of a year marked by trauma and economic upheaval, students are facing increased challenges paying for college and living expenses. States should consider allocating the majority of their financial aid programs to need-based aid. Need-based aid (as opposed to merit-based aid) helps students go to college who might not otherwise be able to afford it and should be the primary way that states disperse their student aid.⁵ To deal with the economic uncertainty going forward, states should also consider supplementing the federal emergency aid money by adding an additional, state funded emergency aid program so that students who face financial hardships can get small grants that allow them to stay enrolled. States should collect data on how public colleges and universities dispersed federal emergency grant funds to students and the impact these funds had to make the case for a new program that lasts beyond the pandemic.

Design Funding to Address the Digital Divide for Students

The pivot online highlighted the substantial number of college students who do not have access to high-speed internet or devices to stay online.⁶ A survey New America conducted in December with Third Way, a left-leaning think tank in Washington, DC, shows that 22 percent of college students reported having major challenges accessing a stable, high-speed internet connection.⁷ That translates to approximately four million students enrolled in higher education who likely are struggling to access the internet, during a time when the vast majority are required to complete their coursework online, which leads to a troubling consequence: many people are not starting or continuing their education. Another survey from New America asked why people either stopped out of community college or changed their mind and did not enroll in the fall semester, and nearly one-fifth said they did not have the technology or internet access needed to take classes online.⁸ States should consider providing internet subsidies and devices for college students, along with building connectivity in rural areas to ensure that students have access to the internet and the devices they need to be successful.

Help Colleges Use Federal Stimulus Funding Well by Providing Technical Assistance and Support

Over the past year, Congress has authorized around $75 billion in higher education relief money.⁹ This is a historic investment. And while around half the money must be spent on direct aid to students, institutions have been awarded billions of dollars to continue offering quality educational opportunities during the pandemic. SHEEO agencies and higher education systems should provide support to colleges and universities receiving federal stimulus funds to ensure that they use the money in ways that have lasting positive impact. This support could be in the form of technical assistance to navigate federal guidance on allowable uses of these funds or convening institutional leaders to share best practices. States have an important role to play in helping colleges think about how to best support students.

Coordinate Agencies to Facilitate Student Access to Basic Need Supports

Across the country, lack of food and housing support has led many students to drop out of higher education.¹⁰ New America has heard from students and colleges about just how badly the pandemic has exacerbated insecurity around these basic needs, which will likely continue with the recovery. State higher education agencies should consider coordinating and connecting agencies that provide support for basic needs with public colleges. Coordinating these agencies and connecting them to colleges will enable more students access to the support they need to stay enrolled.¹¹

Build the Capacity of SHEEO Agencies and State Authorizers

SHEEO agencies and state authorizers need increased levels of funding and staffing to fulfill their statutory responsibilities to protect students. SHEEO agencies have had to seek additional sources of revenue beyond state support, such as federal and philanthropic support to fulfill their missions. In 2020, only about two-thirds of SHEEO agency funding came from state revenues.¹² Additionally, state authorization offices have been underfunded for years, with the majority relying on fees paid by institutions they oversee to fund operations. This underfunding has led to significant staffing capacity challenges in many offices. In 2020, the average authorization office had only one full-time employee for every 74 institutions that it authorized.¹³ Prioritizing funding for these critically important agencies will help ensure states are able to properly oversee the increased number of online programs.

Adopt New Policies that will Protect Students’ Time and Money

By providing incentives for orderly closures of colleges, states can help ensure students’ educational trajectories are minimally impacted. Policies that cancel institutional debt, issue tuition refunds, and provide transfer options will all help protect the investment students have already made. The Maryland Disorderly School Closures legislation passed in 2020 provides an example of the type of action states can take. Under this law, students may be entitled to a refund of tuition and fees if the institution does not properly file student records with the Maryland Higher Education Commission prior to discontinuing academic or administrative operations.¹⁴

Create Information-sharing Agreements and Alignment across Agencies that Oversee Educational Providers

Many for-profit and non-degree credential providers interact with multiple state agencies (including veterans program approval agencies, workforce eligible training provider lists, and occupational licensure boards). In many instances, state agencies may be the only entity that oversees these providers if they are not accredited and do not participate in the Title IV federal aid programs. Inconsistent communication and enforcement of policies can create confusion and can result in substandard student outcomes.¹⁵ States that establish clear lines of communication and responsibilities across agencies can reduce confusion and take quicker, coordinated action against bad actors.¹⁶

Prioritize Oversight and Enforcement of Consumer Protection Laws and Practices

The pandemic has created an unprecedented situation where states have had to provide waivers and extraordinary flexibilities in quality assurance processes. While these flexibilities were necessary to prevent even greater disruptions in student learning, it is important to recognize that this unique situation has created opportunities for abuse, and it is critical for states to increase their oversight efforts now, particularly as for-profit institutions increase recruitment for online programs. Enrollment in for-profit institutions has expanded rapidly during the pandemic while many nonprofit institutions have seen declining enrollment. The enrollment increase in for-profit institutions is reminiscent of what happened during the Great Recession, but many of the federal regulations put in place following for-profit abuses have been rolled back in recent years.¹⁷ These rollbacks mean that quality assurance oversight is more important than ever at the state level.

Use Outcomes Data to Identify Institutions that may be Problematic.

States should collect outcomes data on postsecondary education providers as part of the authorization renewal process. While many states require institutions to provide information on retention, graduation, and licensure exam passage rates, these data elements are often self-reported and not standardized across institutions.¹⁸ If states were able to collect standardized data, they could create benchmarks that establish minimum thresholds providers are required to meet. States should also consider linking student records with workforce data to get a more complete picture of employment outcomes and wage data. This type of linkage could also help institutions demonstrate the value their credentials provide to state economies. If states are not able to collect all of the data elements they would like, data made available by the Department of Education could be an alternative, although it will likely not be up to date. The data provided by the Department’s College Scorecard and the Integrated Postsecondary Data System (IPEDS) outcome measure could be useful, but these data sources do not capture many non-degree credential providers because they are not accredited and do not participate in Title IV federal aid programs.

Monitor Institutions’ Financial Viability.

By using audited financial statements to calculate financial viability ratios and composite scores, states will be able to better identify troubled institutions before closure becomes inevitable. For financially troubled institutions, requiring regular updates on liquidity can help determine when states need to require additional consumer protections. The federal COVID relief funding has helped prevent widespread closures of institutions, but this one-time funding will eventually expire, and it remains unknown how student enrollment patterns, learning modalities, and preferences will change in the aftermath of the pandemic. Institutions that struggle to attract students and serve them well will struggle during the pandemic recovery. It is these institutions on which states will need to focus their financial monitoring efforts. Many financially struggling institutions are adept at staying open; however, requiring these institutions to be prepared for a closure, even if it never occurs, will help minimize the disruption to students in the event it does happen.¹⁹

Require Teach-out Plans and Agreements from High-risk Institutions

Institutions at risk of closing develop teach-out plans with another institution to ensure their students are treated fairly and have a pathway for finishing their programs if the schools do have to close.²⁰ Requiring these agreements be in place and clearly communicated to students will help lessen the confusion that accompanies a closure. Additionally, states should ensure a records management plan is in place, and require clear information be provided to students about closed school discharge opportunities. States may also want to provide legal authority for higher education agencies to seize student records if they are in danger of being lost, stolen, or otherwise not available to students, as Illinois has done.²¹

Assess the Equity Impacts of Institutions’ Reopening Statuses and Develop Plans to Counteract the Inequity for Students of Color and Low-income Students

The COVID-19 pandemic exacerbated the inequity that has existed in higher education for a long time. Due to the public health crisis and the economic downturn caused by the pandemic, many low-income students, first-generation students, Latinx, and Black students have transferred or stopped out of college completely.²²

Last August, a survey conducted by New America showed that the major reasons that many students at community colleges stopped out in fall 2020 included having to work, no longer being able to afford the program, facing the uncertainty of the pandemic, having to provide care for another family member, and questioning the safety of taking classes in person.²³

As the vaccine is rolling out and colleges are making plans for reopening, states must work with institutions to incentivize students’ re-enrollment. The Biden administration’s recently proposed American Families Plan can provide tremendous financial help for states to alleviate students’ cost concerns and improve student support.²⁴ Apart from alleviating students’ concerns about cost, states need to ease re-entry requirements and improve the transfer pipeline to help students enroll and accelerate their time to degree. Regardless of the plans or programs implemented, states should regularly assess the equity impacts of such plans or programs and provide interventions, if necessary, to support and incentivize students of color and low-income students to return to campus.²⁵

Monitor Closely Any Transition in Response to Emergency Events

The pandemic posed unprecedented challenges and enormous uncertainty to colleges and universities, which not only threaten their financial stability, but also disrupt the academic trajectory of students if the institutions close. Unfortunately, students are not always informed in a timely way about potential closures, which leaves them with no clear plans for how to continue their education.

As institutions face enormous uncertainty as a result of the emergency events, states should strengthen their oversight. In April 2020 New America and the National Governors Association recommended three main actions for states to consider in response to the unprecedented challenges posed by the pandemic, including re-evaluating and re-calibrating the state systems, identifying institutions at risk of financial collapse, and planning for possible closure.²⁶

New America and the National Governors Association believe that governors should create systems that allow oversight agencies to collaboratively monitor struggling institutions. In spring 2020 institutions transitioned to online learning quickly in response to the pandemic; in the future to monitor emergency transition to online learning, states should require institutions to provide information such as when institutions go online, when they cease operations, or when enrollment changes. States should also strengthen the authorization process for institutions that start recruiting for their online programs.²⁷

In terms of identifying institutions at risk of collapse, we emphasized the need to examine institutions’ current and projected financial status through data such as the Department of Education’s financial responsibility composite scores. States can also develop their own financial stability metrics.²⁸

After identifying institutions that are at the greatest risk of closing, states should require them to have teach-out arrangements with financially stable institutions. The teach-out plans should include record management plans to ensure students still have access to their transcripts and other important records. Students should also be informed of what will happen to their student loans and whether they will be eligible for closed school discharges.²⁹

Make Applications Virtual/Digital and Return to In-person Site Visits Once it is Safe

As the pandemic pushed institutions to move online, it also gave state authorizers and accreditors opportunities to rethink their approach to approving institutions. In some instances, these approaches became more efficient as state authorizers and accreditors made applications virtual. State authorizers and accreditors should consider making virtual approaches, such as digital application processes, permanent, as long as they do not sacrifice quality. However, some processes that became virtual out of necessity during the pandemic should return to their in-person schedule. For example, state authorizers were creative in making site visits and the review of sensitive documents virtual during the pandemic, but institutions can hide bad practice if site visits remain entirely virtual.³⁰

Require Institutions of Higher Education to Have an Emergency Management Plan in Place

The pandemic affected higher education institutions across the country, heightening the critical role of colleges and universities in working with state and local governments to manage responses to emergencies. However, according to a recent report by the National Conference of State Legislature, only a few states (including Virginia, Arkansas, and Maryland) require public colleges and universities to have emergency preparedness plans.³¹ While a global pandemic can feel like a unique threat, colleges and universities are regularly faced with other types of emergencies such as natural disasters (e.g., hurricanes, earthquakes, fires, etc.) or human-made disasters (e.g., shootings, terrorism, war, bomb threats, etc.).³² To effectively prepare for emergencies, states should work closely with higher education institutions and require them to report on their emergency preparedness and response plans. The plans can be based on the U.S. Department of Education’s 2013 Guide for Developing High-Quality Emergency Operations Plans for Institutions of Higher Education, which categorizes emergency management into five areas: prevention, protection, mitigation, response, and recovery.³³ States may also want to consider requiring institutions to keep a small share of their total revenues in reserve to help overcome financial shocks caused by emergency situations.

Establish Credit Transfer Policies between Institutions to Facilitate Enrollment Changes

The survey conducted by New America last December to understand the enrollment decline among students at or interested in community colleges found that about half of students enrolled in community colleges in spring 2020 and stopped out in fall 2020 will need a license to work in the field they were pursuing, and seven in ten of these students will need to finish their programs to earn the license.³⁴ This statistic highlights the need for institutions to ease the re-entry and transfer process and for states to implement flexible transfer policies between institutions within states to make sure student learning prior to and during the pandemic will be counted towards their progress, encouraging students, especially those who have stopped out, to re-enroll.

Prevent Institutions from Holding Academic Transcripts Hostage for Unpaid Debts

California is in the vanguard when it comes to preventing transcript withholding.³⁵ The state has a simple, clean law that forbids any school from withholding a student’s transcript over an unpaid debt. Other states should follow California’s lead and prevent institutions from harming former students by holding their academic records hostage. Estimates indicate that roughly 6.6 million students have had their transcripts or degree blocked due to unpaid debt.³⁶ These policies tend to be more harmful to low-income students who do not have the means to pay the debt. With the pandemic and disparate economic recovery disproportionately harming low-income households, these policies may dissuade students from continuing their education, even if they are the ones who stand to gain the most from a college degree.