Today’s global economy requires a highly skilled labor force that is prepared to compete on the world stage. Studies from the U.S. Chamber of Commerce, the U.S. Census Bureau, the Brookings Institution and the Conference Board have all identified building ...]]> While other states are experiencing difficult budget decisions, only New Hampshire has completely de-funded student aid

Today’s global economy requires a highly skilled labor force that is prepared to compete on the world stage. Studies from the U.S. Chamber of Commerce, the U.S. Census Bureau, the Brookings Institution and the Conference Board have all identified building and maintaining a highly skilled workforce as a national and local imperative. If we are truly concerned about our economic future, then ensuring access to higher education opportunities for all our citizens should be the No. 1 priority for state policymakers.

With the demographic changes rapidly taking place in New Hampshire, the future of our state’s economy is integrally tied to the future education of our residents. New Hampshire has long enjoyed the benefits of a highly educated populace, ranking third highest in residents holding associate degrees and ninth in those holding bachelor's degrees. However, when you look a little deeper, you quickly discover that the Granite State ranks near the bottom (46^th) in native population holding bachelor’s degrees. This indicates that many of our high school graduates who leave the state for postsecondary education never return. Additionally, the Carsey Institute at the University of New Hampshire reports we are at a 50-year low in the in-migration of residents to our state. If this trend continues. New Hampshire may well lose its economic edge.

Postsecondary education can produce millions in lifetime earnings

In 2011, the U.S. Census Bureau produced an analysis of estimated earnings over the course of an individual’s working life. The analysis revealed two important factors across all demographic categories: “higher earnings are both the result of higher likelihoods of full-time employment and the higher levels of education required for that employment.” This study demonstrates “a clear and well-defined relationship between education and earnings and that this relationship perseveres, even after considering a collection of other personal and geographic characteristics.”

New Hampshire state data bear this out. According to an outlook report prepared by the New Hampshire Center for Public Policy Studies for the New England Economic Partnership, “persons with lower levels of educational attainment claim a larger share of the unemployed (relative to their representative size in the overall population). [Conversely] … the higher the level of education attainment, the lower the unemployment rate for that group.”

Thus, it’s no wonder New Hampshire’s unemployment rates are lower than the national average, with so many of our residents holding postsecondary degrees.

New Hampshire will face skills gap

According to studies by the widely respected Georgetown University Center on Education and the Workforce, 64% of jobs in New Hampshire will require some postsecondary education by 2018. Numerically, these 486,000 jobs will span management and professional, education, STEM and healthcare fields. The key question is will we have the educated residents to fill these positions?

I regularly hear from business leaders already concerned about the skills gap of the current workforce. In an August 2012 article from the Laconia Daily Sun, Gary Groleau, corporate manager of labor relations and corporate development at New Hampshire Ball Bearing Inc., was quoted concerning the lack of capacity to train people for new work. "Without the infrastructure to educate and train people for these jobs," Groleau said, "the competitive advantage of the region and its manufacturers erodes very quickly. And this problem is not going to solve itself."

Another concern is both our rapidly aging population and the declining enrollment numbers in our state’s K-12 schools. In 2025 it is projected that New Hampshire will have a skills gap of 50,841 degrees. To bridge the current and looming workforce gap, New Hampshire must work to achieve higher levels of resident degree completion.

Direct student financial aid matters

General fund support for higher education is a wise and necessary investment. State support toward higher education is critical to our state’s economic and cultural future. Unfortunately, many New Hampshire students are being disadvantaged by the unprecedented lack of direct state financial support for their education. The situation for students will likely worsen, as federal Pell Grant funding for FY2014 will face a $5.7 billion shortfall. Low student aid leads directly to high debt, with New Hampshire students now ranking first in the nation for student loan debt at over $32,000 on average.

Most experts agree that need-based grant aid is most effective in ensuring that students can access higher education. Given the importance of higher education to our economic security, it is useful to explore how New Hampshire’s support of students in their postsecondary education compares with other New England states.

In 2011, the Legislature eliminated all student aid from the New Hampshire state budget. While other states are experiencing difficult budget decisions, no other state has completely de-funded student aid.

I believe it imperative that New Hampshire restore General Fund grant aid to the state budget for our neediest students.

A Brookings Institution study, “Beyond Need and Merit: Strengthening State Grant Programs,” reminded legislators that state grant programs are one of the core policy levers available that have a demonstrated ability to “affect students” access to and success in college. These programs should be designed to use taxpayer dollars as effectively as possible to increase the educational opportunities and attainment level of state residents.

It’s time for New Hampshire to get back into the financial aid business. I urge business leaders and all citizens to encourage policymakers to re-dedicate state resources to higher education scholarships.

Lou D'Allesandro is a New Hampshire state senator and former chair of NEBHE.

Clarification: An earlier version of this piece contained a table that inappropriately juxtaposed data from state agencies and the National Association on State Student Grant & Aid Programs.

In the letter, SHEEO President Paul Lingenfelter asks the next presidential candidate to sustain federal investment in research and development (R&D) and provide necessary levels of federal need-based financial aid. ...]]> The State Higher Education Executive Officers (SHEEO) group issued an open letter to President Barack Obama and Republican challenger Mitt Romney in Change Magazine’s September/October edition.

In the letter, SHEEO President Paul Lingenfelter asks the next presidential candidate to sustain federal investment in research and development (R&D) and provide necessary levels of federal need-based financial aid. The letter also emphasizes the collaboration necessary between federal and state governments to raise degree-attainment rates and support the nation’s civic and economic development.

For its part, New England universities performed 7.3% of the R&D from all sources across all U.S. universities in 2009 , capturing more than $4 billion in research funds. In New England, more than 70% of those R&D dollars comes from Washington, D.C., a much higher percentage than in other U.S. regions. While the region’s research universities have been overly reliant on federal research funds, they have been underfunded by the New England states.

 “Virtually all the basic research in the United States is done in public and private universities, supported principally with federal dollars,” wrote Lingenfelter. States, he noted, "have been stretched beyond their capacity to finance higher education enrollment growth, spiraling healthcare and pension costs, and increasing corrections expense. While we understand that federal resources are also limited, there is no other source to replace the federal role in research and development.”

In addition to supporting R&D, federal dollars support hundreds of thousands of New England students through student financial aid programs. Total state need-based grant aid in New England was equal to only 21% of total federal need-based Pell Grant aid disbursed to New England students.

Although state need-based grant aid pales compared with the total federal financial aid available to students, public higher education systems across the country have found other ways to minimize the cost to students and support degree completion.

For example, the University of Maine agreed to freeze tuition rates at current levels in exchange for state funding, as did the University of New Hampshire. Massachusetts is piloting a “completion incentive grant fund” that links need-based grant aid to students’ academic progress.

Between 2007 and 2010, the number of Pell Grant recipients increased 51% and the average Pell Grant award increased 46%. As in the case of R&D, the states cannot hope to replace federal student financial aid. As diminishing college affordability butts up against the call for higher degree-attainment levels, state and federal governments must work with higher education institutions to enhance postsecondary opportunities for students.