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It’s already the second week of 2026. Before we know it, it will be mid-November. But what did I read as time flew by?
If I had the money - a lost opportunity
We hear a lot about university finances these days and the pressures institutions face in maintaining revenue amid uncertain federal funding and enrollment declines, among other challenges. We hear considerably less about the finances of community colleges, even though they serve a large share of students, about 37% of all enrollments. A new study from the NBER seeks to address this gap by examining the financing of community colleges through the lens of the Higher Education Emergency Relief (HEER) funding provided during the pandemic.
Community colleges are in a financial pickle. They have high fixed costs and a complete, but inadequate, funding model that combines state, local, federal, and tuition dollars, leaving them little room to maneuver.
Baum and Johnson [snip] report a decline of approximately 25% in state appropriations in real terms on an FTE student basis from 2000-2001 to 2014-2015, and funding declines have continued since then [snip]. While some public four-year colleges have been able to compensate for state funding reductions by increasing tuition revenue [snip], community colleges are more constrained in their ability to set tuition levels and cannot rely on increasing the proportion of students paying out-of-state tuition. Community colleges also cannot depend on maintaining steady enrollments, particularly as local employment rates go up or down, as the relationship between enrollment and the economy tends to be countercyclical [snip].
The federal aid provided under HEER funding during the pandemic was an unusual influx of unencumbered money, not already tied up in covering fixed costs. The authors argue that by examining how community colleges in California, Michigan, New York, Ohio, Tennessee, and Texas used this federal aid during the pandemic, we can gain insight into community college leaders’ fiscal priorities.
To do this, they administered a survey to leaders at 170 colleges and followed it up with interviews. While the data is not as detailed as I would like, the authors do make clear that the influx of new money was substantial.
