Education’s Financial Hangover after the Pandemic

The COVID-19 pandemic changed education very quickly. K-12 schools and Universities started doing classes over zoom, the online tutoring industry exploded, and colleges across the country dropped their SAT requirements . But with case numbers down and many people vaccinated,, a sense of normalcy is returning, and many things are going back to the way things worked pre-pandemic. Lots of students are back on campus, the demand for online tutoring is shifting from parent driven to district driven (with some scientifically dubious solutions), and the SAT is back at MIT and others.

With a return to normalcy comes the expectation for the end of some COVID financial packages that were designed to keep schools working. But it is trickier than just turning off the faucet. The landscape of wages has changed, fast food and retail employers have had to raise their pay to continue to attract workers, and it has pulled people away from the already tenuous, but extremely important, area of childcare and early childhood education (ECE). ECE is sitting at 8% less employees than in early 2020 in spite of ever increasing demand, Even though the federal government recognizes how important it is, ECE was cut out of the Inflation Reduction Act from mid-2022.

ECE providers aren’t the only ones who have been drawn away because of low wages, the K-12 teacher shortage is very much ongoing. While wages are far from the only issue that teachers are dealing with, it is a piece of the problem. If the proposed American Teacher Act, a bill that would create a minimum wage of $60k for teachers, is passed it could help somewhat because statewide budgets would be forced to accommodate that reality. But without Democrats controlling the House, it is unclear how far legislation like this will go.

And then there is the looming problem of college enrollment. Possibly because wages have seen so much growth, fewer students are enrolling in community colleges, an obvious option if money is tight, since tuition and fees keep rising, although it seems tuition and fees didn’t quite keep pace with inflation. Small colleges have seen some of the largest dropin enrolment, since it doesn’t make as much sense to pay private college rates instead of public college rates if you don’t get the campus experience, so some of them are trying creative ways to keep students coming in. But all universities are experiencing the decline. But if the predictions in this Vox article come true, we may be headed for an especially precipitous cliff that could exacerbate all of these trends. Several years with fewer college-age students could be disastrous for those already at the edge.

When the pandemic hit, a lot of the solutions focused on one-time cash infusions. The tranches of money in ESSER I, II, and III all have expiration dates and were thought to be best used as a strong intervention against the learning loss which was obviously hitting every school-aged child. But without a clear solution to the learning loss, the money has been spent on solutions that are suboptimal, and the loss has persisted, even across ethnic groups. And plenty of the money simply hasn’t been spent, which will likely mean several contracts get signed in September 2023 and 2024, which are the deadlines to have money obligated.

We were smart enough to give ourselves a bit of runway on spending some of the money. Many of these institutions are stressed, but none or in the middle of collapsing. With targeted electrolyte infusions of cash for teacher salaries, for ECE, and lots more research on solutions that actually fix learning loss, these problems can be kept from spiraling out of control. Whether that happens will be down to how much congress actually does over the next two years and whether your particular state steps up to fill any gaps that the federal government doesn’t get to.