State higher education leaders have identified economic and workforce development as their top policy priority for 2026, with nearly all respondents calling the issue critically important amid federal policy changes and budget pressures, according to a new survey released Tuesday.
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The issue reclaimed the top spot after ranking second in 2025, reflecting states' continued focus on aligning postsecondary education with career readiness as the nation faces projected workforce shortages. Georgetown University research indicates the U.S. will need over five million additional workers with education beyond high school through 2032, including 4.5 million who will need at least a bachelor's degree.
College affordability surged to second place, jumping from sixth position last year, as states grapple with student concerns about costs despite steady increases in state funding. The dramatic rise in importance reflects widespread legislative action, with at least 20 states considering legislation in 2025 to create or expand statewide promise programs offering free college.
Other top priorities include higher education's return on investment, state operating support for public institutions, and college completion rates. The consistency of these issues in the top five demonstrates their enduring significance to state policymakers.
A new addition to the survey—state impacts from federal policy changes—ranked sixth, highlighting concerns about the One Big Beautiful Bill Act's reductions to Medicaid and SNAP funding, which could squeeze state budgets and affect higher education appropriations. The legislation is expected to reduce federal matching funds by nearly $1 trillion, potentially forcing difficult budget choices that could impact higher education funding.
"2026 holds a lot of unknowns as we look to see what state legislators will prioritize and how changes at the federal level will impact states," said Tom Harnisch, SHEEO's vice president for government relations. "Economic and workforce development continues to be top of mind—and with the implementation of Workforce Pell rolling out later this year, we're optimistic that states will continue to make advances in addressing workforce needs."
