How Budget Cuts Are Reshaping Higher Education – Poets&Quants for Undergrads

Fiscal Pressures on Higher Education and Implications for Sustainable Development Goals

Introduction: Higher Education Funding and SDG 4

Higher education institutions are critical drivers for achieving the Sustainable Development Goals (SDGs), particularly SDG 4 (Quality Education). However, the sector’s fiscal vulnerability within state budgets presents a significant challenge to this mission. State funding for higher education is often discretionary, unlike mandated expenses for K-12 education or Medicaid. This flexibility makes university funding, the third-largest expense for most states, a primary target during periods of revenue shortfalls, thereby jeopardizing progress towards providing inclusive and equitable quality education for all.

Analysis of Current Fiscal Trends

Recent data reveals an unstable funding environment that directly impacts the ability of institutions to deliver on their educational and research mandates, which are foundational to the SDGs.

• Nominal vs. Real Funding: While states allocated $129 billion to higher education in 2025, representing a 4% nominal increase, this figure reduces to approximately 2% after accounting for inflation.
• Uneven Distribution: The financial landscape is inconsistent across the nation. Seventeen states experienced a net loss in funding compared to the previous year, while 25 states surpassed 2020 and 2024 levels. This unpredictability hinders long-term strategic planning necessary for sustainable development.

Impact on University Operations and SDGs 8 & 9

Budgetary constraints have tangible consequences for university infrastructure and employment, directly affecting SDG 9 (Industry, Innovation, and Infrastructure) and SDG 8 (Decent Work and Economic Growth).

1. Infrastructure and Innovation (SDG 9):
   • In Virginia, $600 million in campus projects were frozen, stalling the development of modern educational infrastructure.
   • South Dakota cut $9 million from maintenance budgets, risking the degradation of existing facilities.
   • Shrinking federal research dollars and new caps on indirect costs threaten the viability of university labs, which are epicenters of innovation. At Michigan State, 160 projects were stalled, and the University of California system anticipates potential losses of up to $5 billion annually.
2. Economic Growth and Employment (SDG 8):
   • Washington state reduced its budget for four-year institutions by 1.5% to address a state shortfall.
   • Michigan State University eliminated over 180 jobs, contributing to local economic instability and undermining the role of universities as major employers.

Consequences for Students and SDGs 1 & 10

The primary burden of fiscal cuts is transferred to students, creating significant barriers to achieving SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities), in addition to further undermining SDG 4 (Quality Education).

• Erosion of Quality Education (SDG 4): Students face diminished educational quality through fewer research opportunities, crowded classrooms, and outdated facilities resulting from delayed construction and maintenance.
• Increased Inequality (SDG 10): To compensate for funding gaps, many universities are increasing tuition and recruiting more out-of-state students. This strategy raises concerns about equitable access for local and lower-income families, potentially widening the inequality gap.
• Barriers to Poverty Alleviation (SDG 1): Higher tuition leads to heavier student debt loads, which can limit economic mobility and perpetuate cycles of poverty, counteracting the role of education as a tool for poverty eradication.

Conclusion: Resilience and the Path Forward

Despite a history of navigating economic downturns through measures like tuition hikes and hiring freezes, the current fiscal climate poses a persistent threat to the role of higher education in fostering sustainable development. As noted by University of Nebraska President Dr. Jeffrey Gold, these challenges also present an “opportunity to actively reimagine our university” for the future. For higher education to continue serving as a cornerstone for achieving the SDGs, a renewed commitment to stable and equitable funding models is imperative. This requires robust partnerships between government and educational institutions, as envisioned in SDG 17 (Partnerships for the Goals), to ensure universities can lead in creating a more sustainable and equitable world.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on budget cuts in higher education primarily addresses four Sustainable Development Goals (SDGs) by highlighting the negative impacts of reduced funding on educational quality, equity, innovation, and employment.

• SDG 4: Quality Education: This is the most central SDG, as the entire article revolves around the challenges facing higher education. The text discusses how budget cuts affect the quality of education through “crowded classrooms or outdated facilities,” fewer research opportunities, and potential tuition hikes that impact affordability.
• SDG 9: Industry, Innovation, and Infrastructure: The article directly connects budget cuts to a decline in innovation and research infrastructure. It mentions that “Federal research dollars are shrinking,” which leads to universities “scrambling to keep labs open,” and specific examples like “Virginia, which froze $600 million in campus projects” and “160 projects stalled” at Michigan State.
• SDG 10: Reduced Inequalities: The article raises concerns about equity and access to education. It notes that to cope with funding shortfalls, “many universities are recruiting more out-of-state students which is raising tough questions about whether local, lower-income families will still have the same access to public colleges.” This points to a potential increase in inequality based on economic status.
• SDG 8: Decent Work and Economic Growth: The economic impact of the budget cuts is highlighted through direct job losses. The article states that at “Michigan State, more than 180 jobs were lost,” which relates to the goal of ensuring stable and decent employment.

2. What specific targets under those SDGs can be identified based on the article’s content?

Several specific SDG targets are relevant to the challenges described in the article.

1. Target 4.3: By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university.
   • Explanation: The article’s discussion of “Higher tuition means heavier debt loads” and the concern over reduced access for “local, lower-income families” directly challenge the principles of affordable and equal access to university education outlined in this target.
2. Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries…and substantially increase…public and private research and development spending.
   • Explanation: The article explicitly details a trend moving in the opposite direction of this target. Statements like “Federal research dollars are shrinking,” Washington “trimmed 1.5% from its four-year schools,” and South Dakota “cut $9 million from maintenance” demonstrate a decrease, not an increase, in public R&D spending and support for scientific research infrastructure.
3. Target 10.3: Ensure equal opportunity and reduce inequalities of outcome…
   • Explanation: The practice of recruiting more out-of-state students over local, lower-income applicants as a financial strategy directly threatens the goal of ensuring equal opportunity. This action could lead to inequalities of outcome, as access to higher education is a key determinant of future economic success.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions or implies several quantitative and qualitative indicators that can be used to measure the impact of budget cuts and track progress toward the identified targets.

• Indicator for Target 4.3 (Affordability and Access):
  • Implied Indicator: Student debt levels. The article states, “Higher tuition means heavier debt loads,” suggesting that tracking the average student debt is a key measure of affordability.
  • Implied Indicator: Enrollment rates of students from lower-income families. The concern about whether “lower-income families will still have the same access” implies that their enrollment percentage is a critical indicator of equal access.
• Indicator for Target 9.5 (Research and Development Spending):
  • Mentioned Indicator: Public expenditure on higher education and research. The article provides concrete figures, such as the “$129 billion” states allocated to higher education, the “4% increase” before inflation, and specific cuts like the “$600 million” freeze in Virginia and the “$9 million” cut in South Dakota. These figures serve as direct indicators of R&D spending.
  • Mentioned Indicator: Number of research projects. The fact that “160 projects stalled” at a single university is a direct measure of the impact on research activity.
• Indicator for SDG 8 (Employment):
  • Mentioned Indicator: Number of jobs in the education sector. The article provides a specific data point: “more than 180 jobs were lost” at Michigan State, which can be used as an indicator of employment trends in the sector.

4. Summary Table of SDGs, Targets, and Indicators

Source: poetsandquantsforundergrads.com