Chapter 3: Bachelor’s Degree Production and State Higher Education Finance Policy in the Pre- and Post-Recessionary Period

State and local governments play a critical role in the national economy in that they fund vital services (Harris & Shadunsky, 2013), including higher education. National swings in the economy, including recessions, also determine the amount of tax revenues states collect and consequently their level of financial support for higher education institutions and college students. Higher education researchers (Delaney & Doyle, 2011) have suggested that in good economic times, states spend more on higher education and in poor economic times, states spend less. The mid-to-late 2000s consisted of a series of economic and financial downturns across the United States, with the most extreme case being the Great Recession between 2008 and 2009. The Great Recession left lasting impacts on state governments, affecting state spending in several areas, ranging from healthcare, K–12 education, and public safety/corrections, to higher education (Harris & Shadunksy, 2013; Mitchell et al., 2015).