OPINION: Indiana’s Commission on Higher Education issues an eye-opening report, and it's not good

Indiana’s educational attainment gap with the rest of the U.S. is widening at record pace. I struggle to understand how this can be viewed as anything other than an economic emergency.

The latest annual report from the Indiana Commission for Higher Education includes this troubling news—and also some good news.

Good news first. Indiana’s slide in college attendance rates is stabilizing at a bit under 53 percent of high school graduates. The state legislature has expanded 21st Century Scholars eligibility, the report notes, which should slightly boost overall enrollment in college.

That’s the good news in full.

After almost a decade of declining enrollment, the best Indiana has managed to do is slow the decline in college attendance to a trickle. Our current level of educational attainment and college attendance rates puts us squarely in the bottom 10 states and territories. Sandwiched between Wyoming and Puerto Rico is terrible company to keep.

While college attendance rates in Indiana have collapsed to levels not seen in decades, the number of Hoosier kids are attending school outside the state is higher than ever before. So, it isn’t just that young people are choosing to skip college; it’s that more are specifically choosing to leave Indiana for school.

But there’s even worse news.

Indiana also has among the lowest rate of college students staying in our state after they graduate. The math on this is shocking, which is maybe why it wasn’t fully laid out in the report.

Of each age cohort in Indiana, about 88 percent graduate from high school and less than 53 percent attend college. Of those who attend college, 68 percent complete it in six years, yielding just under 32 percent of kids in each year cohort completing college. Of those who complete a bachelor’s degree, roughly 67 percent remain in state.

All told, that means that for every 100 Hoosiers kids turning 18, we should expect that only 21 will complete college and remain in Indiana after graduation.

Nationwide, about 39 percent of adults have a four-year college degree, and that share continues to grow. If we doubled the rate of college graduates who stay in Indiana, it would still take generations to catch up with the rest of the U.S.

Indiana is attempting to match degrees with the demand of employers. The state is doing relatively well in this area, according to the ICHE report. Unfortunately, the track record of those projections is poor. No one has done an especially good job estimating labor demand among college majors.

Moreover, state universities blithely ignore these job and skill demand studies anyway. It is expensive and troublesome to fund in-demand college majors. It’s much easier for a university to conjure up a college graduate retention gimmick than to hire more nursing or finance professors.

Still, a better way to evaluate the “fit” of college skills is to assess which jobs are actually being created. It’s helpful to start from the year college attendance rates peaked.

From January 2015 to March 2024 (the most recent data), the net number of jobs for high school graduates increased by only 4,652 positions in Indiana. During that time, about 330,000 people graduated from high school without pursuing more education and remained in Indiana.

For college graduates, Indiana added 74,421 jobs, while about 168,000 completed college and stayed in state. In other words, from 2015 to 2024, Indiana created 16 new jobs for college graduates for every new job for a high school graduate.

College graduates are the source of most of employment and income growth in Indiana. For each 100 high school graduates who enter the workforce, we get net growth of 1.4 new jobs. But, for every 100 college graduates, we get net growth of 45.9 jobs.

Collapsing college completion combined with college graduate brain drain is poised to stall Indiana’s economy. Just to be clear, this outcome is not bad luck, bad timing or the result of economic forces that devalue a college degree.

The actual cost of educating a young person in Indiana’s public universities is now lower than it was 20 years ago. Tuition and fees have risen because state taxpayers provide one-third less support than they did 20 years ago. That is why fewer kids are going to college and why a higher proportion are leaving the state to attend college.

I’m deeply sympathetic to the notion that more young people should attend trade school or technical education. Those jobs can be rewarding and lucrative. The problem is that there won’t be more of those jobs in the coming years; there will be fewer. So, an abundance of technically educated kids won’t grow the Indiana economy. That may be just fine, because we aren’t seeing growth in post-secondary education there either.

I’m also sympathetic to the argument that people who attend college receive most of the benefit, so they should pay most of the cost. But, as with the trade school argument, that scenario won’t grow Indiana’s economy. The spillover benefit of supporting public higher education is that it raises wages for everyone, not just college graduates.

Moreover, as I’ve said again and again in this space, all the net economic growth in the U.S. is going to places with high levels of educational attainment. In 2023, the 10 best-educated states, with just 15 percent of the nation’s population, produced 46 percent of the nation's GDP. With 2.05 percent of the nation’s population, Indiana produced 1.46 percent of the nation’s GDP.

That should be embarrassing for a state that claims it “works.”

Hope won’t alter Indiana’s prospects. Either Indiana educates more people while creating more communities in which those graduates wish to live, or we must prepare for long-term economic decline. It is a policy choice.