Association for Public Policy Analysis & Management

In the United States, community colleges are becoming increasingly important in the higher educational landscape. Barack Obama and other policy makers are interested in how community colleges can help underemployed individuals improve their job prospects through shorter term certificates and vocational training. Community colleges provide easily accessible, low cost training and thus, economic circumstances might impact the educational decisions of their prospective students.

There are many ways in which the Great Recession changed the landscape for college going in the United States. The Federal limits for Pell grants and Stafford loans increased, further changing an already borrowing heavy college finance climate. In addition, reduced wages and increased layoffs lowered the opportunity cost of attending college for the marginal student who might not otherwise pursue higher education. Community colleges are likely to serve these marginal students because their costs tend to be lower than four year colleges and there are low barriers to entry in terms of admission requirements and enrolling mid academic year. These marginal students might be older or otherwise different from normal college goers. All of these factors impact the demand for community college. However, community colleges lost state appropriations which might be passed on to students in increased tuition costs and larger class sizes potentially restricting the supply of college. Therefore, it is likely that community college students are responsive to changing economic conditions.

The Great Recession brought about large changes in unemployment, layoffs and other indicators of economic success. Because the opportunity cost of foregone earnings decreased for individuals during the Great Recession it is possible that investments in human capital changed as a result. How did community college students respond? Did the Great Recession impact their decisions to enroll, persist, return to school, acquire a degree or certificate, change their field of study or transfer to four year college?

I use college level data from the state of California combined with data on the timing and magnitude of county level changes in unemployment rates, housing prices and layoffs to understand how community college students altered their decisions as a result of the Great Recession. The variation in these indicators provides differences in the extent to which the recession impacted students. The college level data provides information on enrollment demographics, course enrollment, grades, transfers, degrees and certificates awarded. Using the geographic variation in changes among economic indicators allows for identification of the impact of the recession on decision making.

Preliminary findings suggest large impacts of the Great Recession on student persistence in community college. In addition, students increased the number of credits pursued. That is, continuing community college students saw large increases in enrollment and took larger course loads as a result of the Great Recession. In addition, enrollment increased for those under thirty and more certificates requiring 30 to 60 credits were earned. Especially since supply was likely decreasing during this time, these results suggest that the recession increased demand for community college.