State-Level Responses to the Access and Completion Challenge in the New Era of Austerity

Understanding just how state leaders respond to fiscal crises and the continuing challenges of adequate funding should provide insight into how successful states are likely to be in creating environments where most citizens can attend and benefit from higher education. This article describes and begins to classify the nature and range of state responses to ongoing fiscal challenges. We focus on state-level leadership and governance, fiscal policies, and accountability mechanisms. We identify five types of responses: cutting costs (emphasizing cost controls and low-cost providers); buying degrees (allocating state funds based on outcomes not inputs); the grand bargain (providing more campus autonomy in exchange for lower funding); hunkering down and waiting (hoping that state appropriations will return to past levels); and falling apart (weak governance mechanisms compounding financial difficulties). The tradeoffs inherent in each approach are discussed.