Higher Education: A sound investment towards Oklahoma’s economic prosperity (Guest Post: Michael Thomas)

MichaelThomasMichael Thomas is one of four 2014-2015 OK Policy Research Fellows. Michael is a Master’s student in the Higher Education and Student Affairs program at Oklahoma State University. He works as a Graduate Research Assistant for the department of Graduate Studies, Outreach, and Research, focusing on the recruitment and retention of graduate students within the College of Education. He aspires to become a Professor of Higher Education Leadership and Policy.

The vitality of higher education is a fundamental and increasingly important determinant of a nation’s position in the world economy. Oklahoma is no stranger to this concept. In 2008, the Oklahoma State Regents for Higher Education contracted with Regional Economic Models, Inc. (REMI) to analyze the economic contribution of Oklahoma’s higher education system on the state’s economy. Examining current and future contributions of higher education through the development of a single-region, 70-sector Policy Insight Model, REMI demonstrated that by 2048, increased earnings from college graduates will contribute $8.825 billion annually to state disposable income. As a result, economic activity will increase, leading to more economic growth for the region.

Yet in order for Oklahoma’s higher education system to achieve or surpass this economic potential, three changes must occur: state appropriations to higher education should increase substantially; tuition charges should decrease or remain steady; and employment incentive programs should expand.

In May 2014, the Oklahoma State Regents for Higher Education approved $988.6 million in state funding that had been appropriated by the Legislature for the state system of higher education for FY 2015. This state funding helps offset the financial costs of attending and graduating from college. Moreover, it provides financial support to help maintain academic services and programs. However, Oklahoma higher education leaders are still faced with the challenge of managing public colleges and universities because financial support from the state remains inadequate.

According to a report from the Center on Budget and Policy Priorities, Oklahoma’s per student spending for higher education only increased by 1.9 percent from FY 2013-FY 2014 after adjusting for inflation, whereas other states saw increases in state spending per student as high as 28.5 percent. Since 2008, state funding for Oklahoma higher education has dropped by $106 million, amounting to a 21.3 percent decrease in state spending per student. How can Oklahoma expect to reach a state of economic prosperity if proper investment into higher education is not a priority?

Oklahoma’s college tuition has increased by 17.3 percent from 2008 to present, after adjusting for inflation. Tuition increases are the result of declining or inadequate state support. Because of this, moderate to low income students are faced with the burden of paying expensive tuition charges. As a result, many students are unable to attend or finish college. And while the Oklahoma State Regents for Higher Education offer a tuition scholarship known as Oklahoma’s Promise, many low-income Oklahomans struggle with the cost of expensive books and supplies, rising room and board costs, and increased student fees. However, increased state appropriations would offset the need to raise the price of tuition. Indeed, this change will grant more students post-secondary access while also ensuring employment across the higher education enterprise. Taking these steps can only add to the projected economic impact.  

Source: REMI (Regional Economic Models, Inc), “The Economic Impact of The Higher Education System Of the State of Oklahoma” https://www.okhighered.org/econ-dev/econ-impact-remi-9-08.pdf

The analysis of policy variables (capital assets, land, construction, furniture, infrastructure, machinery, etc.) provided by OSRHE allowed REMI to apply Policy Insight, an economic forecasting technology that runs realistic year-by-year estimates of the total regional effects of any specific policy initiative. Benefits to economic growth from spending on higher education were seen in the creation of new jobs, more competitive industries with higher education, and increased consumption.

The economic contribution of higher education on Oklahoma’s economy can be further realized through the use of employee incentive programs for college graduates. For example, the Oklahoma State Regents for Higher Education has a Teacher Shortage Employment Incentive Program (TSEIP), which works to recruit and retain math and science teachers. Teachers are reimbursed eligible student loan expenses or equivalent cash benefits. While the current policy provides benefits to math and science teachers only, the program benefits should be extended to an wider array of higher education programs and disciplines. For instance, college graduates of business programs would have incentive to stay in Oklahoma to work, stimulating the economy through increased productivity. Not only does this demonstrate Oklahoma’s commitment to and appreciation of diverse educational experiences, but its ability to maintain its competitive advantage as well.  

The connection between higher education and its impact on economic development is clear. Choosing to decrease tuition or expand recruitment incentive programs are powerful steps to take as Oklahoma travels the road to economic prosperity. Nevertheless, if Oklahoma’s higher education system is not adequately funded by the state, the predicted economic impact or any chance of going beyond it will not be realized.


Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

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