Lessons of the Global Recession

Students from poor and vulnerable populations are not only less likely to find ways to cover their course fees, but are more likely to make decisions about their education based on limited knowledge of the quality of courses of study and their relevance to rapidly shifting labor markets. During this recession, a downward spiral in labor markets makes students and their families less convinced about the return rate for their investments in higher learning. This is also why their willingness to further their education beyond secondary school becomes more tenuous during recessions. The quality of vocational higher education and community colleges that have closer ties to the labor market will be a more important consideration. Those that do enter postsecondary institutions are more likely to drop out than other students. Whatever the case, the recession must not result in a situation that provides an unfair advantage for better-off groups that have escaped the worst excesses of an economic crisis.

Another response from the 1997–1998 crisis was the caution and concern about underfunding basic and senior secondary education. For example, sudden and large shifts of government financing to higher education in countries with developing market economies can be perceived as placing adequate financing for basic and secondary education at risk.

Some evidence shows that on average, low-income countries spend as much as 14 times more on higher education as on a secondary school student and 34 times more than on a primary school student (ADB 2008b, Glewwe and Kremer 2006). This disparity is a risk at the best of times, and an even greater risk during a recession. Therefore, a recession calls for urgent action, in particular the kind of cost-sharing and partnerships that will reduce the risk of widening disparities and ensure sustainable financing for all sectors.

The tendency for governments to protect basic and secondary education budgets during a recession, while understandable, can be short sighted. It is inevitable that higher education per student costs will remain well above other levels within the system. Yet countenancing inequity in higher education during a recession can have disastrous implications over the long term. Aside from the obvious loss of talent and the marginalizing of the poor, there is also a loss in the knowledge and skills available to serve in the social and economic development of poor communities.

During recessions, the sense of corporate responsibility becomes less robust and compromised by financial constraints (Salmi and Bassett 2009). Foundations and alumni may cut back on contributions aimed at for helping poor students. Other private funding sources for university research that focuses on the plight of poor and vulnerable communities may be affected. The private sector and civil society need to respond by maintaining loans, scholarships, and deferred payback periods. Moreover, private institutions need to respond by providing students from poor and vulnerable populations with better information about course choices and labor markets. International groups that establish higher education programs in Asia need to avoid exploiting poor and vulnerable students for economic gain. Also, international foundations that support scholarships for students from poor regions need to ensure that these students are supported to study in programs that will aid community development in the regions from which the students come.

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