Dr. Lawrence Souza, Adjunct Professor Finance: St. Mary's College of California, Menlo College, Sonoma State, University of Redlands, University of San Francisco
The following is an excerpt of Dr. Souza’s report.
Over the decades, access and funding for education have been declining, along with educational outcomes; these secular trends only got worse after the COVID-19 pandemic. National Assessment of Educational Progress (NAEP) data show declines in reading and math following COVID-19, with partial recovery in 2024. NAEP shows pandemic-era declines, with 2022 reading down ~3 points and math down 5 (grade 4) and 8 (grade 8) vs. 2019; 2024 saw reading decline further by ~2 points (grades 4 & 8) while grade 4 math ticked up ~2 points; grade 8 math flat. Recovery is uneven, and gaps widened most for lower-performing students. (NCES/NAGB).
Program for International Student Assessment (PISA) 2022 showed U.S. students below the Organization for Economic Co-operation and Development (OECD) averages in mathematics, average in science, and stronger in reading. College enrollment stabilized after pandemic declines; however, college campuses have not fully recovered to pre-pandemic levels, continue to experience high absenteeism, and students are continuing to experience high levels of anxiety over their job prospects, finances, housing, and food security. U.S. spending per student remains among the highest internationally. U.S. average tuition and total spending per student across levels remain well above OECD averages; in 2021, the U.S. averaged USD 20,387 per FTE vs USD 14,209 OECD.
One of the biggest issues for the country, economy, and households is student loan balances remaining at approximately $1.64 trillion. ESSA governs federal K–12 accountability, while states shape standards and assessments. In higher ed, Federal Student Aid and state grant programs (e.g., Cal Grant) drive affordability; governance varies across systems. Future drivers: chronic absenteeism recovery, teacher workforce shortages, AI-enabled instruction/tutoring, and better longitudinal data linking funding to outcomes.
Lastly, under the current administration and congressional priorities, it looks like college and university research and scientific research will continue to be defunded, which will have a negative effect on college enrollment, scientific research, educated-skilled labor force, and economic output.
California K–12 enrollment continues to decline, stabilizing at around 5.8–5.9 million in 2024–25. Funding remains shaped by Proposition 98 and the Local Control Funding Formula (LCFF), which guarantees a minimum level of funding for K–12 public schools and community colleges, which aim to improve equity. Chronic absenteeism has improved but remains elevated. Transitional Kindergarten (TK) expansion provides early learning benefits. Factors putting downward pressure on college student enrollment include CSU adopted multi-year tuition increases beginning in 2024–25, citing structural budget needs, and UC’s Tuition Stability Plan which moderates annual changes for a cohort. These policies interact with Cal Grants and federal aid to shape net price.
However, rising loan costs and debt levels, and the elimination of the tuition forgiveness and loan forgiveness programs under the Biden Administration will only make college less affordable and out of reach for more California residents. Local colleges and universities will also be negatively affected by the current immigration policy, particularly community colleges and the state university system along the interior valley. Lack of education access and upward mobility is expected to have negative effects on labor force participation rates.
When comparing the United States education systems to other countries, the U.S. spends more per student than OECD averages, yet PISA outcomes remain mixed—a long-standing paradox highlighting efficiency, equity, and coherence issues. Singapore, Japan, Korea, and Chinese Taipei outperformed the U.S., especially in mathematics. Finland remained above OECD averages across subjects. U.S. remains relatively strong in reading; gaps persist by socioeconomic status. Europe emphasizes coherent curricula and vocational pathways, such as Germany’s dual system. Asia’s success is linked to rigorous teacher development and high expectations, though exam pressure raises concerns about well-being.
High performers emphasize selective preparation, continuous development, and coherent curricula (e.g., Singapore, Japan lesson study; Finland’s teacher education). Germany’s dual system integrates apprenticeships with classroom learning, smoothing school-to-work transitions. Many OECD systems use national curricula and centralized support, facilitating alignment and scale—contrasting with the U.S.’s localized finance and governance.
Europe/Asia’s high performers pair high expectations, strong teaching, aligned curricula, and credible vocational pathways; the U.S. can adapt these within its federal system.
Women earn the majority of U.S. bachelor’s degrees—about 59% in 2021–22—yet remain underrepresented in some STEM fields, especially engineering and computing; representation has improved over time. Campus climate surveys highlight safety and inclusion challenges.
The overall gender pay gap persists; the field of study explains much of the early-career differences because the highest-paying majors (e.g., certain engineering and CS) enroll fewer women, on average. BLS shows earnings rising with educational attainment (“Education pays”). Strategies: diversify participation in high-earning programs, expand mentoring and internships, and make wage information transparent by field.
One of the main complaints from female students is the lack of access to programs and club leadership positions. Most of the club leadership is made up of men, and most of the teams that compete in academic competitions are made up of men. Female students commented, when surveyed, that they want to participate in the leadership of these clubs and want to compete in the prestigious competitions, but male students exclude them from conversations, ignore them or even become hostile to them if they try to enter their groups, club leadership, and the competitions.
Higher educational attainment is associated with higher earnings and lower unemployment (BLS), better health behaviors and outcomes (CDC), and lower crime; causal evidence shows education reduces certain crime categories (Lochner & Moretti, 2004). Poverty rates also decline sharply with higher degrees (Census/ACS). These relationships work through multiple channels: skills, income, social capital, and health literacy.
Key takeaways from this research report include incomplete learning recovery, affordability challenges, California’s demographic headwinds, and international lessons on teacher quality and vocational pathways. Recommendations for improving education efficacy include literacy and math recovery programs, attendance re-engagement, teacher pipeline investment, transparent funding tied to outcomes, expanded dual enrollment and apprenticeships, and modernized student aid.
For California, policies should emphasize targeted Local Control Funding Formula (LCFF) interventions, Transitional Kindergarten (TK) expansion, support for right-sizing schools, and higher education affordability. Europe should strengthen school-to-work linkages, while Asia should balance academic rigor with student well-being. Shared agendas include teacher development, coherent curricula, early education, and transparent outcome tracking.
Lastly, female students on campus should look to establish their own clubs, enter competitions on their own, and seek out male students who are inclusive and supportive.
Association of American Universities. (2019). Report on the AAU Campus Climate Survey on Sexual Assault and Misconduct. https://www.aau.edu/
Bureau of Labor Statistics. (2024). Education pays: Unemployment rates and earnings by educational attainment. https://www.bls.gov/emp/chart-unemployment-earnings-education.htm
California Department of Education. (2025). DataQuest update: Enrollment reports. https://www.cde.ca.gov/ds/ad/
Federal Reserve Bank of New York. (2025). Household debt and credit: Q1 2025. https://www.newyorkfed.org/microeconomics/hhdc
Legislative Analyst’s Office (California). (2025). Proposition 98 guarantee and K–12 spending plan. https://www.lao.ca.gov/Publications/Report/4963
Lochner, L., & Moretti, E. (2004). The effect of education on crime: Evidence from prison inmates, arrests, and self-reports. Quarterly Journal of Economics, 119(1), 155–194.
National Center for Education Statistics. (2022–2025). The Nation’s Report Card; Condition of Education. https://nces.ed.gov/
National Student Clearinghouse Research Center. (2024). Term enrollment estimates. https://nscresearchcenter.org/
OECD. (2023–2024). PISA 2022 results; Education at a Glance 2024. https://www.oecd.org/
UC Office of the President. (1960). California Master Plan for Higher Education overview. https://www.ucop.edu/
U.S. Department of Education. (n.d.). ESEA/ESSA overview; Title IX; IDEA. https://www.ed.gov/
U.S. Department of Veterans Affairs. (n.d.). GI Bill history and impact. https://www.va.gov/
From Connections Newsletter (Food for Thought): August 2025
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