Association for Public Policy Analysis & Management

The public higher education system in Illinois (IL) is in crisis. A political stalemate between the governor and state legislature resulted in a budget impasse in July 2015, whereby IL four-year public institutions lost an average 46.5% in state appropriations over two years and funds for the state’s need-based grant program were delayed. Many public institutions raised tuition in response–five by double-digits by 2017. One widely reported short-term consequence of the impasse, for example, was that Chicago State enrolled just 86 first-year students in the fall of 2016 (a 57% drop from 2015). This is particularly salient to concerns of equity, as the institutions in IL most reliant on state appropriations also serve the largest shares of low-income students. A number of reports have descriptively shown decreases in enrollment, yet no study to our knowledge has tried to estimate a causal impact of the IL budget impasse on low-income student enrollment.

This study answers the following research question:

• What impact has the state budget impasse had on low-income enrollment at public four-year institutions in IL?

To estimate this effect we used a difference-in-differences approach (DiD) to compare changes in low-income enrollment in IL between 2014 and 2017 (the first difference), relative to changes in enrollment in a comparison group of states (the second difference). Similar to previous studies examining the effect of state policy on institutional enrollment, this approach allows us to subtract out observable changes in trends related to low-income enrollment (e.g., tuition) and approximate an effect due to a change in state policy. For this study, we used grant and loan disbursement data from the Federal Student Aid; institutional data from Office Integrated Postsecondary Education Data System; and state-level data from the American Community Survey from 2012 to 2016. We constructed a number of comparison groups – the nation, proximal states that are involved in tuition reciprocity agreements through the Midwestern Student Exchange Program (MSEP), and states that have decreased support for higher education.

Our study found:

• Descriptively, and relative to the four comparison groups, IL institutions experienced the largest average drops in Pell enrollment between the fall of 2015 and 2016 (3% drop in the U.S. average versus 7.3% drop in IL).
• The budget impasse in IL had a negative effect on Pell enrollment. Relative to the national institutional average, IL institutions lost an average of 153 low-income students between 2014 and 2016 per year (β = -152.9, p > .05). When compared to states that also experienced decreases in state support, IL lost more than 255 low-income students per year (β = -254.6, p > .05).
• Nationally, IL four-year public institutions were already serving fewer low-income students to begin with (β =-1,379.9, p > .05).

This study serves as a starting point to understanding the short, interim, and long-term effects of sudden state disinvestment in public higher education. While IL is the current anomaly, other states have recently experienced short-lived, or were under the threat of, budget stalemates (PA, NM).