Q&A: Editor Jennifer A. Delaney Discusses the New AERA Book Volatility in State Spending for Higher Education

May 2023

Photo credit: L. Brian Stauffer, University of Illinois News Bureau

In April, AERA published Volatility in State Spending for Higher Education, edited by Jennifer A. Delaney. Under Delaney’s leadership, the collected chapters in this book draw attention to the role of predictability in state support for higher education.

Delaney is an associate professor of higher education at the University of Illinois Urbana-Champaign. She discusses important takeaways from the book in the following Q&A.

Q. What led you to undertake this book? Why is it important to higher education and education research?

A. The U.S. has seen staggering moments of volatility in state support for higher education. Recently, unprecedented breakdowns have occurred in the relationships between state governments and institutions of higher education. For example, the state of Illinois was not able to pass a budget for FY 2016, 2017, and part of 2018, and consequently provided almost no funding for postsecondary institutions throughout a 793-day state budget impasse crisis. During the 2015–2016 academic year in Pennsylvania, a state budget was not passed on schedule and public institutions lived through eight and a half months of uncertainty—nearly the same length as a full academic year. In that same year in Louisiana, a budget was passed, but a state revenue shortfall resulted in large midyear cuts for institutions, and many students encountered tuition increases between the fall and spring semesters. Beginning in 2020, the COVID-19 pandemic and related economic recession have destabilized state budgets, increased institutional costs to provide safe learning environments for students, and worsened unpredictability in state support for higher education.

Especially in this environment, I was inspired to undertake this book project because I felt that too little attention was being paid by policymakers and scholars to the consequences of volatility in state funding. Instead, most discussions focused on levels of funding. This book fills an important gap in the academic literature, since predictability matters—to students, families, institutions, states, the public good, and society as a whole. The book focuses on how much volatility there is in the fiscal relationship between states and institutions of higher education and addresses some of the consequences of this uncertainty.

Q. What makes the book the first of its kind?

A. This book is the first to pay close and sustained scholarly attention to the consequences of volatility in state funding for higher education. Prior academic literature has focused on the consequences of levels of funding, without paying much attention to volatility. The research field needs to know more about not only the drivers of state support for higher education and the impact of changes in appropriations levels on institutions and students, but also the monetary and nonmonetary costs of an unpredictable funding environment. The book provides new knowledge that improves the research base to encourage better understanding of volatility in state support for higher education. Hopefully it will also encourage future scholarship on the topic.

Q. What are the key issues addressed in the book?

A. The book focuses on how much volatility there is in the fiscal relationship between states and institutions of higher education and addresses some of the consequences of this uncertainty. Specifically, chapters in this book address questions such as: Has there been an increase in the time required to recover from prior cuts to higher education? Which characteristics of states are associated with shorter or longer durations for recovery? What is the role of state economic performance and the business cycle in state spending for higher education? To what degree does volatility in spending for higher education vary across states? In what ways does politics shape volatility for higher education support, particularly in relation to political volatility, political and organizational state characteristics, political party control, and elected representative demographics? What mechanisms are available for addressing volatility, and how effective are these mechanisms? For instance, are there relationships between volatility and tuition-setting authority, performance funding, state merit-based student aid programs, lottery earmarks, or state “free” college programs? How does volatility in state funding for higher education institutions relate to state funding for student aid? What are the consequences of volatility in state support for students (e.g., for enrollment and completion, by institution type and race), institutions (e.g., for staffing and research expenditures), and pricing (e.g., for student fees)?

This work also highlights the importance of considering the costs of the risks inherent in an unpredictable environment. In filling an important void in the higher education finance literature, this book makes an important scholarly contribution and addresses a timely, perennial, and policy-relevant topic.

Q. What is the value of the book to higher education leaders, policymakers, and the public? What lessons/guidance should institutional leaders and policymakers take from the book?

A. Comprised of a set of high-quality research chapters, this book is a compelling edited volume on a topic for which there is not currently an available text. As such, the volume is expected to be of interest to two primary audiences. The first will be a typical scholarly audience comprised of academics and graduate students. It is expected that the book will be of use in graduate-level courses in higher education, especially higher education finance and public policy courses. The second audience will be institutional leaders and policy makers. This audience will include individuals from State Higher Education Executive Officers’ (SHEEO) offices and other state-level think tanks and policy organizations interested in state fiscal policy with respect to the support of postsecondary institutions. In addition, institutional leaders will find the volume useful, including university presidents, chancellors, provosts, planning and budget directors, institutional researchers, and student financial aid administrators. State legislative analysts, state elected representatives’ staffs, and state budget offices will also find the contents of the volume useful, especially for those in roles that relate to state decisions about higher education budgeting.

The primary lesson of this book is that volatility in state funding has distinct and important consequences. Collectively, the chapters make the case that policymakers, institutional leaders, and scholars should pay increased attention to volatility in state support for higher education, because the ramifications of failing to address it are too great. The risks of operating in an uncertain financial environment can lead to behaviors that are not always in the best interests of states, institutions, or students, and can erode the public good.