Austerity and Disruption

With a concerted effort now to reduce government spending, higher education leaders should expect reduced state and federal support in 2025 and beyond, with demographic and climate trends also darkening the clouds. Workers and consumers should also see it all coming. 

Austerity has already begun. In July 2024, the Pew Foundation reported that state budgets were facing cuts as Covid-era funds ended.  The most notable cuts are coming to the California State University System, which is expected to reduce its budget by hundred of millions of dollars. But several other states are feeling the pinch. 

Austerity for higher education is also likely to increase at the state level as baby boomers reach advanced age and require more medical attention and nursing home care. How this demographic cliff of old age, reduced fertility, and fluctuating populations plays out will vary greatly across the United States. 

Some Southern states, like Florida, Texas, Georgia, and North Carolina, have improved financially despite threats from climate change. Anti-tax, anti-regulation, and anti-union laws make them friendly to corporations in search of relocation and a better deal. States in the West, like Utah, Arizona, and Nevada, are are also likely to continue thriving. Besides climate change, which is profoundly disruptive but takes generations to notice, mass deportations could affect their economies quickly--if the Trump Administration's threats can be carried out. 

Alaska, New Mexico, Oregon, and several states in the Midwest and Atlantic regions will face more austerity as their populations remain stagnant or decline and folks move to states with lower housing costs and less taxes, leaving others to die. Deaths of despair among youth will continue to ravage them. What happens with these failing states in the future is anyone's guess. One would hope higher education leaders would have solutions and be courageous enough to act, or at the very least allow those with solutions to talk.