The heated rhetoric surrounding immigration reform legislation in Congress threatens to drown out an important, bipartisan effort to resolve a decades-old inconsistency in federal immigration law concerning postsecondary tuition costs for undocumented students who have graduated from high schools in the United States.
The “DREAM Act,” which was incorporated into the Senate Judiciary Committee’s immigration reform bill last week, would allow states to provide in-state tuition for postsecondary education to undocumented students who have attended (for at least three years) and graduated from high school in their states.
Federal immigration law now prohibits them from doing so, though that has not stopped several states, including “red” states like Utah, Kansas, and Texas, from adopting such legislation in recognition of the fact that there are more than 50,000 of these students each year that graduate from high school as -- in nearly every way -- children of the American dream.
Of the DREAM Act, Sen. Jeff Sessions (R-Ala.) stated, “I find it inconceivable that we would provide greater benefits to persons who are here illegally than to American citizens. It makes a mockery of the rule of law."
However, Congress must ensure the debate over the education of undocumented students is actually grounded in the law, rather than rhetoric. Federal law related to this issue was interpreted more than 20 years ago by the United States Supreme Court’s 1982 Plyler v. Doe decision.
Plyler v. Doe involved a Texas law that effectively banned undocumented minor children from participating in public elementary and secondary education. The Court heard arguments that sounded quite similar to those used to deny in-state college tuition for the same students: that providing K-12 education rewards illegal immigration, that we should not give public benefits to those in the country illegally. The significance of this case is not that it settled once and for all the ideological arguments surrounding immigration. Rather, the Court created protective legal precedent for minor undocumented students by carefully examining the intersection of immigration law, the distribution of public goods, and individual rights as protected by the Constitution of the United States.
The Supreme Court’s decision addressed the question: Did a child break the law because the parents brought the child into the country illegally as a minor? The Supreme Court said “no.”
The Court ruled that such children, in fact, were entitled to equal protection under the law, one of America’s most cherished legal principles. As cited in the Court’s opinion, the Fourteenth Amendment to the Constitution provides that “[n]o State shall…deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
As a population within the state’s jurisdiction, undocumented students were, therefore, entitled to equal treatment under the law. In the opinion of the Court, Associate Justice William J. Brennan Jr., wrote, “To permit a state … to identify subclasses of persons whom it would define as beyond its jurisdiction, thereby relieving itself of the obligation to assure that its laws are designed and applied equally to those persons, would undermine the principal purpose for which the Equal Protection Clause was incorporated in the Fourteenth Amendment.”
The Court further argued that federal immigration law, despite “sheer incapability or lax enforcement,” was not a justification for denying children equal protection and access to education.
In recognition of this principle, several state legislatures have passed laws to allow in-state postsecondary tuition for undocumented students who have attended public high schools in state for more than three years. They realize the legal “no-man’s land” these students occupy, and have sought to remedy it under the law.
The central relevance of the Supreme Court’s case to this debate over in-state tuition for undocumented students is that we cannot simply ignore what Justice Brennan called the “shadow population” of students who go about their daily lives and contribute to our society in the same way that we all strive to contribute. Moreover, we cannot deprive these students of the equal protection that our Constitution provides simply because they graduate from the high school setting where the Supreme Court has decided that it applies.
Though the issue is easy to weigh down with heated rhetoric, we hope that the law will, in fact, prevail, and that Congress will pass the DREAM Act. As Justice Brennan concluded, “[W]hatever savings might be achieved by denying these children an education, they are wholly insubstantial in light of the costs involved to these children, the State, and the Nation.”
As someone who works with many states to improve education, I’m deeply troubled by the lack of our national progress -- and the missing urgency in postsecondary education -- toward improving students’ readiness for college and their prospects for completing college degrees.
Many in postsecondary education agree the readiness problem must be addressed, and a few states have taken strong early steps toward a solution. So, why haven’t we moved closer to solving the readiness problem?
The largest obstacle is that all of postsecondary education still does not see the readiness problem and the elements of addressing it in the same ways. Some question the size of the problem. Some fear that students’ access to higher learning could be at risk. Others fear that admissions would be affected, or believe that we can solve it simply by requiring more high school courses, or that readiness is more of a problem for high schools to solve.
We must come together in postsecondary education on many of these points if we are to prepare far greater numbers of students for college. ACT Inc. estimates that 60 percent to 70 percent of its test takers are not well-prepared for college study. Considering that only about half of students who enroll in college actually earn a degree or certificate, we must find ways to confront this problem. Research shows that most future job opportunities in the U.S. will require some level of college study or career training after high school.
A handful of states have taken action toward improving college readiness -- notably Arkansas, California, Indiana, Georgia, Kentucky and Texas, all of which have at least established specific state policy agendas for dealing with the problem.
Achieve Inc. has worked with many states through its American Diploma Project to promote the importance and help states take some early steps toward improving college readiness. The American Council on Education and the State Higher Education Executive Officers also are among the groups that have begun supporting the need to take action on readiness.
Most states, though, have neither committed to a specific agenda for improving college readiness nor made significant progress.
The lack of progress is particularly worrisome because many in postsecondary education agree that improving college readiness is doable, and we have a good idea of the practical steps our states and K-12 and postsecondary education systems need to take.
Briefly, these steps are needed:
Establish college-readiness standards in language arts and mathematics that are embraced by all of postsecondary education.
Ensure adoption of the college-readiness standards by the public K-12 schools.
Identify high school tests that measure students’ performance on the standards early in high school so they can find the extra help or courses they need before or during the senior year.
Make these tests part of the state’s K-12 school accountability system.
Prepare current and new teachers in the new standards and how to incorporate them into classroom instruction.
So, if we know how to address this college-readiness challenge, why is there such little progress across many of our states and systems of postsecondary education?
As we have reviewed state policies on college readiness in the past year, a time during which many states should have been making considerable progress on readiness, we’ve seen a lack of shared views within and across states of the magnitude and nature of the readiness problems we face. There is simply not the critical convergence of thinking around various elements of the readiness challenge that is necessary for all interests to establish or commit to a bold action agenda.
I remember attending a graduate school forum some years ago and hearing the noted organizational psychologist Karl E. Weick, now a professor at the University of Michigan, refer to higher education as a bunch of solutions in search of relevant problems. In other words, frequently the most difficult task is defining the problem clearly and in such ways that all of the key parties embrace the definition. The solutions are more apparent when the definition is clarified.
Here are some suggestions about how to bring consensus on some of the key points in defining the readiness challenge:
First, there needs to be agreement that all states face a significant readiness problem. Research shows that most students are not well-prepared to begin college study in language arts, mathematics or both. Even many students who are not required to take remedial courses are not well-prepared for college work, and many professors and college administrators know it.
Few states apply one set of readiness standards across all of postsecondary education, resulting in individual campuses or systems setting their own readiness or placement standards. Frequently, the standards are lower than they should be to indicate readiness. States that recognize the magnitude of the readiness problem are more likely to make readiness a priority and move toward improvement.
Second, postsecondary education needs to embrace the improvement of college readiness as a move in its own best interest -- and in the best interest of every state and the entire nation. Some officials in postsecondary education will question this statement. After all, remedial education still generates per-student funding, and many students who are not ready for college still make their way into degree-credit courses and generate funding, at least until they drop out. Their lack of readiness also provides an easy explanation for low college graduation rates. Having high proportions of students better prepared for college would eliminate a reason higher education currently uses to explain the low rates and would make higher education more accountable for its own effectiveness. Thus, making postsecondary education more accountable for postsecondary completion while maintaining access would force us to take readiness more seriously, because readiness is a key factor in degree and certificate completion.
Third, postsecondary education must not confuse the need to improve readiness with a threat to college admission or entry. Confusing readiness with admission will only keep states and postsecondary education systems from reaching consensus on making readiness a priority. Broad-access and open-door institutions (which serve a large majority of students across the nation) will not fully embrace a readiness initiative if they believe it will negatively affect access. Therefore, states need to assert that access and entry will be maintained regardless of the readiness agenda. Remedial education will continue -- only, we hope, a lot less of it, for more students will be prepared to begin college work.
This is the fourth and most essential point: Improving college readiness depends on strengthening high school graduation requirements and diplomas, but states and higher education systems cannot delay dealing with the readiness problem until these graduation requirements rise to meet college-readiness standards. All states need to raise high school graduation and diploma requirements, increase high school graduation rates, improve student achievement, and ensure that much higher proportions of students are ready for college upon completing high school. All of these areas need careful and diligent work from K-12 and postsecondary leaders working together. Rhetoric calling for high school diploma and graduation requirements and high-stakes graduation tests to be changed overnight to ensure college readiness for all students in the near-term may cause the public schools to question whether higher graduation requirements are realistic. Many states already struggle with low graduation rates in high schools, even under existing requirements and tests.
Fifth and related to the last point, for the readiness initiative to be taken seriously, the general claims that “all students need to be ready for college and careers” needs to be narrowed down, clarified and embraced widely. We must specify what readiness means in those essential skills that every person needs to learn further in school and at work -- reading, writing and math. Specified in terms of these learning skills, a case can be made that all high school graduates need these skills in collegiate academic programs, postsecondary career-preparation programs, or subsequent on-the-job training. In today’s economy, all students need a certain level of basic skills to pursue their goals.
Sixth, postsecondary education and the public schools need to recognize that meeting the college-readiness challenge will center on setting specific, measurable performance standards in key learning skills and having more students achieve them. There is still some confusion over this focus, especially in postsecondary education, which has little experience in performance standards-based education (in contrast to public schools since the 1990s). Postsecondary education tends to see readiness as synonymous with high school courses and grades or with ACT or SAT scores. While rigorous high school courses and good grades are necessary, they do not by any means ensure readiness. The national admissions tests may come closer to indicating student readiness in reading, writing and math, but they do not provide the precise and transparent focus on the core standards that high school teachers need to use in their classroom instruction.
Seventh, the best kind of readiness agenda will require a statewide effort that has all of postsecondary education acting as a body, agreeing on one set of readiness standards and uniformly communicating them to all high schools in a state. This statewide stance is needed to ensure that teachers in all of a state’s high schools know exactly what standards to help students meet. No state has managed yet to get all of postsecondary education -- universities and community colleges -- to speak with one voice. College readiness will be improved only when high school classroom teachers receive clear and concise signals about standards, backed by all of postsecondary education in their state. Statewide, state-level policy direction may be needed to provide the framework for public schools and postsecondary education to coordinate their efforts.
Reaching consensus across postsecondary education on the definition of the nation’s college-readiness problem will help states and college systems move toward solutions. All states need explicit readiness standards in reading and math, and they need to bring postsecondary education and K-12 schools together to develop such standards and to implement them. Getting more students ready for college and the work place will benefit our nation, every state, all students and postsecondary education.
Dave Spence is the president of the Southern Regional Education Board, a nonprofit and nonpartisan organization based in Atlanta that works with 16 member states to improve pre-K-12 and postsecondary education. He is a former vice chancellor of the California, Florida and Georgia state university systems, and he received the Virginia B. Smith Innovative Leadership Award in 2006 from the National Center for Public Policy and Higher Education.
Conflicting pressures have put urban public institutions of higher education that serve large numbers of low-income and students of color in a straitjacket.
Major cities in the U.S. generally have higher concentrations of poverty, communities of color and immigrants than the suburbs do. The problems facing higher education in cities dovetail with other urban problems such as the quality of urban K-12 schools and the socioeconomic status of their students.
Consequently, state-supported urban institutions are being asked -- and have moral and long-term economic imperatives -- to provide more academic and student support services to students coming through pre-collegiate educational pipelines that have not prepared them for college than is true for many other kinds of colleges.
Compounding the problem, we are being presented with increasing performance and accountability mandates. All of this is happening at a time when state funding for those institutions is declining in a scandalous way, yet the pressure on them to keep tuition low is increasing. In short, we are being asked to do more with far fewer resources than ever before.
And the impact will inevitably fall onto our students, those who need it most. Education Secretary Margaret Spellings said it herself in May: “In too many of our cities, the reality faced by minority and low-income kids is shocking.” Citing urban “dropout factories” and a 50 percent dropout rate for African-American, Latino and Native Americans, Spellings said, “We must ensure the same opportunities available to kids in the suburbs are available to kids in the city. If we don't, we will most certainly become a poorer, more divided nation of haves and have-nots.”
Parallels in Inequality
Many of our urban secondary schools are abysmal, it’s true. Equally unjustifiable, but perhaps no surprise, is that urban institutions of higher education have begun to endure challenges and inequities that mirror those faced by our feeder schools and districts.
In high schools, white students tend to be concentrated in well-performing schools in the suburbs while urban school districts, filled with lower-income and students of color, are deteriorating. At the postsecondary level, white students crowd the more selective state flagship and research universities. Meanwhile, if they go to college at all, students from traditionally underserved backgrounds often attend institutions with less stringent admission standards and lower retention and graduation rates, including community colleges and urban colleges and universities. The rate of college enrollment in the college-age population in cities is about half of what it is in the suburbs.
Options for low-income and students of color, in high school and college, are becoming separate but not equal to those for white students.
Colorado is a prime example of this distributing paradox. We currently rank in the top five per capita for college-degree holders, yet we’re importing our college graduates. The state ranks near the bottom in the number of low-income students and those from underrepresented backgrounds who go to college.
Part of this results from an educational pipeline in Denver that is more than just leaky; it is spitting out young people at an alarming rate. For example, roughly 30 percent of Denver Public Schools’ Latinos graduate from high school; in contrast, 70 percent of whites do. The student-of-color population, which is 80 percent at Denver Public Schools, drops to 48 percent at Community College of Denver, then to 24 percent at Metropolitan State College of Denver, my institution, which has the largest student-of-color population of any four-year institution in Colorado. In fact, Metro State has more students of color than the University of Colorado at Boulder and Colorado State University combined.
The Conventional Urban Student
Ethnic diversity has become the holy grail of colleges and universities; everyone is trying to get it. A high-achieving high school student of color is the most sought-after demographic in the college applicant pool. And our more prestigious schools are working to increase their matriculation rates of these students.
But what about the conventional student of color who graduates from an urban high school and whose achievements are more modest? These are the students -- place-bound, often of limited economic status and whose preparation for college is less rigorous -- who are largely served by our public urban institutions. In sheer numbers, they dwarf the students of color who attend the more prestigious institutions.
Urban low-income and students of color are coming to college with severe academic deficiencies, particularly in the areas of writing, mathematics and science. Furthermore, many students from economically challenged backgrounds lack college-going family precedent or role models. It is critical that these students have access to full-time faculty of the same ethnic background to serve as peer mentors, helping them navigate the transition from high school to college.
Postsecondary institutions serving large numbers of low-income and students of color are implementing various strategies to address these students’ academic deficiencies. Enhanced orientation programs, peer counselors, mentors, full-time faculty who teach classes at the freshman and sophomore level, learning communities, increased collaboration with urban high school districts and improved coordination with community colleges are all being implemented or enhanced to provide much-needed support for this cohort of students. However, many of these programs are in jeopardy because of limitations in state funding.
This is the case in point: Urban institutions are being asked to do more and more with less and less.
The ‘90s was a decade of dramatic growth in state revenues, yet there was a simultaneous shrinking of their colleges’ share of state budgets, as more programs and services began to compete with higher education for funding.
From 1970 to 2000, government appropriations per student for public higher education institutions increased 3 percent in constant dollars. During the same period, tuition and fees per student increased 99 percent, according to the National Center for Education Statistics. In Colorado, the percentage of the state budget going to higher education dropped from 22.4 percent in 1983 to 7.5 percent in 2007.
At the same time that state funding for higher education has been decreasing, the call for “accountability” in higher education is on the rise. State legislatures are expressing more interest in investing in the explicit results that come from public higher-education institutions, rather than investing in higher education itself. For instance, at a recent summit on higher education in Colorado attended by leaders from all the colleges, one proposal put forth would tie supplemental funding to schools proving they are more efficient than their peers and graduating better students.
With state funding squeezed tighter and tighter, many colleges across the country have been able to maintain the status quo only by raising student tuition and fees. However, in urban institutions that serve larger populations of low-income and students of color, the combination of decreased state funding and the continued imperative for lower tuition means a smaller pool of financial resources from which to draw to educate some of our neediest populations. Some institutions, like Metro State, have a statutory obligation to be accessible and keep tuition low with no corollary mandate for adequate funding to provide necessary wrap-around services for students from underserved backgrounds.
Additionally, in Colorado the relative funding by type of higher education institution has shifted. A recent comparison by the legislature’s Joint Budget Committee showed that in the last six years the amount of money, in general fund and tuition per student full-time equivalency, went up for all institutions in Colorado except Metro State, with only a negligible increase for the community colleges.
These relative disparities occurred despite the fact that the community colleges serve more urban and ethnic minority students than the four-year colleges combined, and Metro State is Colorado’s largest urban institution, most diverse four-year institution and educator of the second-largest undergraduate population in the state.
The Joint Budget Committee wrote, “(T)here has been a reallocation of resources among the higher education institutions, whether part of a clearly articulated statewide strategy or a happenstance of many unrelated decisions.”
State legislatures need to start addressing these kinds of inequities, and soon. Leaders in public higher education need to work together to create shared state visions among the research universities, the comprehensive colleges and the urban institutions, particularly to address how states are going to meet the needs of the growing segment of the population that come from low-income and underrepresented backgrounds.
This may seem to be just an urban problem, but it’s not because ultimately it affects all of society on a social and economic level.
For example, college graduates earn almost twice that of high school graduates, have greater purchasing power and produce higher tax revenue. In Colorado, if low-income and students of color graduated and were employed at the same rate as other students, it would annually generate an estimated $967 million in additional tax revenue, according to the National Center for Public Policy and Higher education. Obviously, it is through education that these at-risk students are able to lift themselves to a higher socioeconomic level. Otherwise, their options are limited to clawing and scraping their way ahead in menial jobs or worse.
The problems in our urban K-12 schools are deep and entrenched; they have been there for decades, for a multitude of reasons. Today our public urban baccalaureate colleges are headed down the same path, thanks to the lack of funding, an increasing number of students needing remedial coursework and the shrinking pipeline to good education available to low-income and students of color in this country. If these issues in higher education are not addressed now, they will become as intractable as those at the “dropout factories” Spellings derides.
One is left to wonder whether the precipitous decline of our public urban institutions of higher education would be allowed to happen if the student populations at these institutions were more affluent and more white.
Stephen Jordan is president of Metropolitan State College of Denver.
On September 24, a perceptive federal judge in California pointed out the obvious and cleared a lot of thick overgrowth from the landscape of postsecondary oversight in the United States. In brief, Judge Margaret Morrow concluded that a state cannot treat regional accreditors differently from each other in order to favor colleges based in the state over those based elsewhere.
Judge Morrow’s preliminary opinion in Daghlian v. DeVry, with which I agree for the most part, concludes that differences among regional accreditors are insufficient to sustain California’s contention that the state can in effect exempt locally based colleges from state oversight because they are accredited by the Western Association of Schools and Colleges (WASC), while requiring colleges based elsewhere to get state approval to operate because they are accredited by a different regional accreditor.
This decision may cut part of the knot that has plagued proposed revisions of California postsecondary approval laws. WASC has been actively opposing some of the changes, even though they don’t affect WASC schools, apparently on a camel’s nose theory: any hint of state interference in collegiate self-governance must be sprayed with hot and cold running lobbyists. Ultimately, WASC is lobbying the tide not to come in.
The DeVry case may therefore serve to drag into the open one of the less-well-understood aspects of education law and policy. One of the commonest fallacies in higher education, and one which is amazingly ill-understood even by professional educators, is that colleges get to offer degrees because their accreditor allows them to. Not so. Colleges, including private ones, get to offer degrees because state governments give them the authority to do so.
Let me say that again for maximum clarity: Private colleges in the United States have no inherent right to issue degrees. That right comes to them through a grant of authority from a state government. With the exception of Congress and Indian tribes, I know of no other source for degree authority in the United States. The authority may come as a charter, a constitutional provision or a statute, but it must have an origin in state law. No accreditor can give that authority and no accreditor can take it away. Nor can the federal government do either, except for its own colleges.
The federal government recognizes this area of state supremacy in its regulations governing accreditors. A federally recognized accreditor is prohibited by federal rules from accrediting a college unless that college has appropriate state authority to issue degrees prior to accreditation. That is why one current California proposal to allow schools accredited by the Western Association to operate without a separate grant of state authority cannot work. This chicken chasing its own egg is a turkey. Judge Morrow’s preliminary decision serves to add top-quality stuffing to this defunct bureaucratic poultry.
California (and every other state) must formally give authority to issue degrees to every college based in the state that wants to grant degrees. Instead, it seems simpler for states to just punt the function of postsecondary approval to the local accreditor. Sorry, it can’t be done that way. Likewise, accreditors have no ability to grant degree authority to a foreign school -- only the government of the nation, or its properly designated authority, can do that.
In theory, every state diligently determines which colleges can issue degrees and, ideally, exercises at least some baseline quality control. In practice, this does not always happen, and in California today, it can’t happen, for there is no state agency in existence to issue the approval. The consequences are significant.
Right now as I write, it is impossible to start a new degree-granting institution in California, because any such institution requires state approval. It requires state approval not only to get accredited, but to have any legal authority to issue degrees. And it can’t get this approval. On these grounds alone, California is flirting with a Commerce Clause problem: The legislature has de facto protected all existing California colleges from competition. Florida tried this a few years ago and was squashed in federal court.
Also, any California institution that comes up for renewal by its current accreditor has to show that it has current state approval to issue degrees. Some won’t be able to. Even if all parties accepted the convenient but illegal fiction that WASC can stand in for the state, Judge Morrow has killed any attempt by the state to claim that WASC accreditation works as a stopgap but that accreditation by the North Central Association’s Higher Learning Commission doesn’t.
With luck, one side effect of the DeVry case will be to hose out once and for all some of the fictions that states, colleges and accreditors have erected around the curiously opaque process of college and program approval. When the false fronts have collapsed -- the collegial slurry panned for its limited nuggets and the agencies of various states (e.g., loopholed Alabama, grandfathered New Mexico, AWOL Hawaii and disinterested Idaho) subjected to the need to perform -- we can hope for useful changes.
What should emerge from this helpful legal reality check on the role of states and accreditors? First, absolute clarity that each state is legally responsible for the private colleges based there. That includes program quality. No more hibernating under the accreditorial dust storm. Accreditors are owned by their dues-paying member schools and should never be expected to serve as enforcement arms of state or federal governments. They are arms of the colleges, dedicated to advancing the interests of their member schools. There is nothing wrong with that, but let’s give it the right name: a club of schools with similar interests and approaches, not an enforcement body (certainly not of federal standards), and not remotely capable of handling student complaints.
States that have perched primly in the back pews, hands clasped and eyes downcast while the U.S. Department of Education brutalizes accreditors into doing oversight work for which they are unsuited, unfunded and unprepared, need to stop shirking their duties and hoping that the feds will do it for them. Who on earth, looking with unclouded eyes at the federal government, would entrust it with quality control?
I have argued for some time that the Department of Education should make its own decisions about financial aid eligibility based on its own standards, properly enforced by itself. That is a different and appropriate role: You want our money? Here are our rules.
Right now, the Department of Education is incompetent, in the technical sense, to perform college oversight. They can deal, sort of, with the most obvious cases, but they have no real structure in place for meaningful Title IV eligibility oversight. Regional accreditors need not fear losing their recognition, since the feds have no replacement process in place. Therefore regional accreditors and the larger national and specialized accreditors can ignore most federal noises.
Finally, the federal government has no business assuming a duty that constitutionally belongs to the states. The federal government would love to move in on territory that has belonged to the states for over 200 years. It is trying to persuade accreditors to do the dirty work. The states should not let this happen. If Judge Morrow’s case is nominally about the comparability of accreditors, its real impact may be on states that have taken their responsibilities lightly for too long.
Alan Contreras works for the State of Oregon; his views do not necessarily reflect those of the state. His blog is The Oregon Review.
Can you believe that the State of Washington actually wants to tax Microsoft? Doesn’t Washington realize that by taxing Microsoft it risks pushing the company to move its headquarters to a lower tax state? And even if Microsoft doesn’t pay taxes it still contributes to the state in many ways by, for example, promoting knowledge creation. Washington wants Microsoft to pay huge sums in taxes just because Microsoft earns astronomic profits. But Microsoft earned these profits through diligence and intelligence. Does Washington really want to punish Microsoft for its hard-earned success?
Washington State, of course, does tax Microsoft. And if Microsoft tried to get out of paying all taxes many college professors would curse the firm for displaying such naked greed. But Harvard University, the Microsoft of the educational world, feels itself entitled to tax exemption.
Some Massachusetts legislators want to tax rich colleges. Under their proposal, as reported on Inside Higher Ed, Massachusetts colleges would pay a 2.5 percent tax on all assets over $1 billion. (The idea is part of a broader push to question whether some colleges with hefty endowments are inappropriately hoarding wealth while continuing to raise their tuitions sharply.) Nine schools, including Harvard and Smith College (my employer), are wealthy enough to be subject to the tax.
The tax would harm higher education in Massachusetts. But almost all taxes inflict harm. Taxing software companies, for example, reduces their output and increases their prices.
Kevin Casey, Harvard's associate vice president for government, community and public affairs, opposes the tax and was quoted in The Boston Globe as saying, “You'd be taxing success here.” But almost all taxes are taxes on success. For example, I just wrote an economics textbook. If the book sells well it will greatly increase my income and so cause me to pay higher Massachusetts taxes. Massachusetts, therefore, would tax my textbook success. But if you want the wealthy to pay more in taxes than the non-wealthy, then you must support taxing financial success.
Kevin Casey also believes that the tax would harm Massachusetts by damaging “stable bedrock institutions." But organizations such as Microsoft could also use this "bedrock institution" argument to argue for their own tax exemption.
Richard J. Doherty, president of the Association of Independent Colleges and Universities in Massachusetts, correctly pointed out that the tax would damage one of the strongest parts of the Massachusetts economy. He said, “It's like Florida taxing oranges.”
Florida, however, does tax its orange industry. A state that didn’t tax its most successful industries would have to impose higher taxes on less successful businesses and so would further impede these businesses’ fortunes.
Taxes are like poison. Taking a lot is fatal, but exposure to small quantities only moderately harms health. The best way for a government to tax, therefore, is for it to spread around its tax poison broadly so no entity must consume too much of it. If Massachusetts is determined to collect a certain amount of taxes from organizations (such as corporations), then it will do less harm if it forces all organizations to pay a little than if it mandates that a subset pay a lot.
A tax on elite colleges would reduce inequality. Students who attend top schools have vastly higher lifetime incomes than other Americans do. And even if the tax reduced financial aid and so increased student borrowing, it would still reduce inequality because those who graduate from elite schools with large debts are much better off financially than are their peers who do not attend college.
The Harvard economics professor Greg Mankiw has suggested that the tax could cause Harvard to move to another state. But whenever a state taxes a business it risks causing the business to flee.
Colleges, I suspect, are far less likely than businesses are to leave a state because of adverse conditions. Yale and the University of Chicago would surely pay a hefty tax to turn their crime-ridden neighborhoods into versions of Stanford’s Palo Alto. Yet both these schools stay put, even when nearly any similarly situated multi-billion-dollar business that sought to attract the best and the brightest (and often the richest) would have long ago moved to more pleasant surroundings.
In his blog Mankiw also writes of how another Harvard professor thinks his institution should act if taxed: This professor proposes that “Harvard can decide to no longer accept the children of Massachusetts residents.” Well, just imagine the reaction if Microsoft, in its anger over being taxed by Washington state, even joked about boycotting all Washington customers.
Although I support taxing rich colleges, I believe there are better ways of doing it than through imposing a wealth tax on endowments. As Mankiw wrote to me, many economists believe it inefficient for governments to tax savings. I would prefer if Massachusetts imposed a sales tax on tuitions. Such a tax might appeal to politicians who don’t begrudge elite colleges their huge wealth but do feel the schools should spend more of their capital on students by, for example, charging low tuitions.
As summer reaches its mid-point, selected high ranking U.S. House and Senate members continue to work on finalizing massive legislation to renew the Higher Education Act, which has already gone through seven extensions this year. One of the few primary issues still being debated is the “State Commitment to Affordable College Education Amendment,” commonly known as the “Maintenance of Effort” provision. The provision seeks to hold states accountable for maintaining certain levels of tax support for higher education, and I believe it is essential for the future of public higher education.
The maintenance of effort provision, which was advanced by Rep. George Miller of California, Rep. John Tierney of Massachusetts and supported by members of both parties on the U.S. House Committee on Education and Labor, is premised on the fact that the most significant factor impacting the rapidly rising cost of college education for nearly 80 percent of the higher education population has been the relentless decline in commitment on the part of most state governments to maintain requisite levels of public funding. The result of this long-term decreasing commitment has been that in many states, as state appropriations have dwindled, public university tuition and fees have skyrocketed. This trend has effectively shifted the burden of funding higher education from the general public to the student.
What Representatives Miller, Tierney and other bipartisan members of the House Education and Labor Committee have figured out is that billions in new student aid dollars will have little effect on the expansion of educational opportunity if state legislatures continue to consistently reduce their fiscal commitment to higher education. Essentially, MOE is a first step in holding states accountable for retaining given levels of appropriations for their own students. The perversity of the present system is that as state legislatures lower their fiscal effort or do not provide adequate support for increasing student populations, tuitions and fees subsequently rise, and as a result most federal student aid programs are tapped at higher levels further indebting ever more students and with greater average debt.
Many state officials have become savvy about the process. In fact, I was told by a very high ranking member of the state legislature in Kentucky a couple of years ago that he did not need to provide additional tax support for public universities since the institutions themselves had the ability to increase their own student tuition and acquire the funds through the federal tuition-based aid programs. This “supplanting” of state support with federal tuition-based program support occurs more readily when state economies are bad or simply when legislators, by whim or fancy, refuse to provide the appropriate levels of public tax support, knowing full well that public universities will in response raise student tuition and fees to provide essential funds.
As a consequence, additional fiscal burdens are placed directly on students and indirectly on the federal government to offset what states fail to provide. This has been a pattern over the last three decades as increases in state legislative appropriations have been unreliable and state institutions are sent scrambling for needed revenues. The maintenance of effort provision has the potential to place pressure, through the secretary of education, to better stabilize state appropriations by means of federal disincentives through the use of Leveraging Educational Assistance Program funds and other programs, or incentives when new federal funds are made available in the future.
Supporters of the MOE provision include the American Association of State Colleges and Universities, which represents the majority of public universities nationwide, and numerous national student organizations. Opposition to the inclusion of the MOE Amendment is spearheaded by the National Governors Association and Council of State Governments, who have the obvious interest in seeing that billions in funding should continue to flow freely without strings. This no-strings approach is, of course, extremely attractive to states that continue to reduce their commitment to public higher education by shifting the financial responsibility away from themselves.
Strong opposition also resonates from the “states’ rights” element that insists that the federal government should not have such fiscal leverage over states. Leading this charge is Sen. Lamar Alexander of Tennessee, who as U.S. secretary of education favored the elimination of the Department of Education and represents a state that is constantly last, or near last, among the 50 states in its tax effort to support public education at virtually all levels.
Legislators, such as Senator Alexander, who argue that states should receive federal funding without a corresponding fiscal commitment to higher education actually perceive that this anti-state tax effort strategy is good public policy. Unfortunately, in this system, the students are the ultimate losers as college affordability declines and federal direct student aid dollars are increasingly rendered less effective.
Many opponents of this amendment also insist that the MOE provision is precedent setting and represents a new dimension of federal encroachment in state sovereignty. In fact, concerns about the federal government holding states fiscally accountable is not new and has been a staple of education and welfare legislation for many decades. In 1965 the Elementary and Secondary Education Act carried with it a maintenance of effort provision that forbade states to supplant their own funding with federal dollars. Over the last four decades, these supplanting provisions have been upheld and enforced by federal courts on numerous occasions. Medicaid, and other federal funding measures operate in similar fashion making it difficult for state legislatures to cut funding without federal fiscal consequences.
In summary, maintenance of effort is an essential component for ensuring that states are held accountable for their funding of higher education. This amendment, if used effectively by blending both fiscal disincentives and incentives, will make states think twice before cutting higher education appropriations and should have an attendant effect of better stabilizing state higher education finding. The true winners will be, of course, the students, but in the broader context the spillover beneficiaries from state fiscal stabilization and enhancements to higher education will be the entire social and economic system.
F. King Alexander
F. King Alexander is president of California State University at Long Beach.
In forming a strategy to deal with the severe economic downturn, President-elect Obama and his evolving brain trust of economic advisers should recall the largely successful and innovative efforts by federal and state governments to avoid a projected steep post-World War II recession -- in particular, the key role given to higher education.
Beginning in earnest in 1944, many leaders in Washington and in the state capitals throughout the nation worried about a return to Depression-era unemployment rates -- President Roosevelt included.
There are many reasons that the expected deep recession eventually turned into the beginning of an economic boom in the US after the war, including high saving rates during the war with the result of unanticipated and pent-up consumer demand. But another reason was proactive efforts to mitigate feared unemployment rates, to support industries with growth potential, and to fund yet another round of infrastructure development and expand public services.
One of the most important salves that came out of that era of policy making, one that provides a guide for our present predicament, was the embrace of large-scale investments and innovative policies by both federal and state governments to promote greater access to higher education.
The famed GI Bill, for example, was not simply an effort to open new opportunities for deserving returning veterans -- many of whom had delayed their education or needed new skills to enter the job market. The unprecedented investment by the federal government in providing grants for college had another important purpose: to reduce projected unemployment rolls and, at the same time, help restructure the U.S. labor market by producing a more skilled labor force.
State governments acted as a partner in that macroeconomic strategy. Under the leadership of Gov. Earl Warren, for instance, California expanded markedly the physical capacity of their public higher education systems by establishing new campuses, hiring new faculty, eventually creating their own scholarship programs to supplant the GI Bill, and subsequently reaping tremendous economic and social benefits from the investment in human capital.
The Role of Higher Education in National Economic Recovery Today
That basic strategy of expanding funding for individuals to attend a college or university and to get a degree, and funding the expansion of higher education institutions, is a key component thus far missing in the national debate over the route to economic recovery.
Expanding higher education funding and enrollment capacity may be as important as any other policy lever to cope with an economic downturn, including funding for infrastructure. Any new federal initiative to boost access could also be designed for an immediate impact on the economy.
The overall educational attainment of a nation is, in fact, much more important today than some 60 years ago. Broad access is increasingly viewed as vital for socioeconomic mobility and demand for higher education generally goes up during economic downturns. Individuals who lose their jobs, or fear low prospects for employment in declining economies, see a university or college degree as a means to better employment prospects.
In some significant measure, it is likely that enrollment demand will go up, particularly in the public higher education sector, because tuition costs are generally much lower than in the private independent and for-profit sectors. We are already seeing evidence that many students who had planned to attend private or out-of-state public colleges will turn to cheaper in-state options.
Yet most state and local governments are in the midst of wholesale cutting of their budgets, the initial rounds of large and succeeding cuts to their public higher education systems.
To make ends meet, places like CSU simply cannot afford more part-time, let alone full-time, faculty to teach the classes -- this despite a 20 percent increase in freshman applications over last year. In the face of this significant rise in demand, CSU plans to cut its enrollment by some 10,000 students. That would mean a net 10 percent cut in total freshman admitted for 2009-10 over this academic year. Most CSU undergraduates are in their mid-20s, meaning some sizable number of students will be displaced, forced into an eroding labor market.
CSU’s planned limit on enrollment is in reaction to successive years of major budget cuts, including a mid-year cut of some $66 million and probably larger cuts next academic year. CSU already took a $31.3 million cut earlier this year.
The ten-campus University of California system might follow suit. Adjusted for inflation and enrollment growth, state funding on a per-student basis at UC has fallen nearly 40 percent since 1990 -- from $15,860 in 1990 to $9,560 today in current, inflation-adjusted dollars. The UC president and the Board of Regents have made preliminary threats of a similar reduction to that of CSU in freshman admissions that would equate to a 6 percent overall reduction in the universities' system-wide undergraduate enrollment.
Admittedly, such threats in the past have acted as negotiating positions with the state legislature and governor. But these are not ordinary times, and this is not an ordinary recession.
The net effect of any enrollment caps in the public four-year institutions is a seemingly unrealistic expectation that California’s community colleges will act as a buffer, absorbing the spill-off of students denied admission at UC and CSU and the general rise in demand for higher education. That won’t happen.
California’s community colleges are already facing initial cuts of $332.2 million. There will be no additional funding for expanding the community colleges, with one estimate that more than 250,000 students will be turned away -- the colleges will be cutting the number of part-time lecturers in the midst of unprecedented demand for classes. I sense that that number will be much larger without a proactive mitigation.
A similar cascading scenario will occur across the nation. Millions of students are already flocking to community colleges and public universities at a time of midyear cuts that are forcing colleges to lay off faculty members and cut classes; many higher education institutions are already freezing enrollment.
In New York, Gov. David Paterson faces a large budget deficit and plans midyear cuts of some $348 million in the budget for the State University of New York’s 64-campus system and the City University of New York. This comes on top of some $196 million in cuts made earlier in this fiscal year. All of this will have an impact on access and enrollment rates.
After a long period of declining public financing for higher education on a per student basis, most public universities and colleges have little room to yet again do more with less. State budget cuts for higher education already in the works will undoubtedly have a negative impact on student access rates for this academic year. But the largest impact will come in 2009-10 when tumbling state budget allocations will correspond with rising demand for higher education.
Beyond bonds for construction, most states, like California, have severe limits on borrowing. Most must provide balanced budgets under their state constitutions. Some may raise taxes to cover growing real and projected deficits; but most will cut deeply into public expenditures, including education.
Public university and college systems in California and other states are no longer interested in pitching in to expand enrollment without the resources; now they are pushing back under the rubric of self-preservation. Every institution is increasingly sensing that they are on their own, and not part of a collective effort to serve a state, to serve a nation. No one that I am aware of has modeled the potential impact of this cascading effect of the disparate actions of state governments, multi-campus systems, and individual institutions cutting budgets and cutting enrollment.
The traditional lever of public college and universities to help cope with declining state and local revenues is to raise tuition and fees. However, I sense that we are at a point where significant fee increases, matched by rising unemployment rates and continued constrictions in credit markets, will cause a huge, artificial downward pressure on the ability of students to enroll in all types of institutions -- from community colleges to major selective universities. Further, additional tuition revenue will likely not cover the added cost of expanding classes and campus infrastructure required to meet enrollment demand.
Would it be smart to constrict access to higher education just when unemployment rates are potentially peaking?
U.S. Lags Behind Other Nations
The U.S. is already lagging behind many international competitors in the number of students entering and, even more importantly, graduating with a college degree. Less than two decades ago, America had the highest rate not only of students who entered a college or university, but also of those who then actually earned a bachelor’s degree or higher. Now the U.S. ranks a rather meager 16th in the percentage of young people who get a degree – behind Australia, Iceland, New Zealand, Finland, Denmark, Poland, the Netherlands, Italy, Norway, the United Kingdom, Ireland, Sweden, Israel, Hungary, and Japan. Indeed, and sadly, the U.S. is one of the few OECD nations in which the older generation has achieved higher rates of education attainment than the younger generation.
Here is the gist of the problem: too few students who graduate from high school; too many part-time students; too high a proportion of students (nearly 50 percent) in two-year community colleges, most never getting a degree; too many part-time faculty; an absence of long-term goals at the national level and by state governments regarding higher education access and graduation rates; and to date no well-conceived funding models to assure quality.
This is a problem that needs national leadership. The U.S. continues to grow in population. Today, the U.S. enrolls about 19 million students in degree-granting colleges and universities. If current participation rates remain flat, and states and federal governments don’t cut further the budgets for higher education, we would grow by about 2.5 million students over the next 15 years. But if the U.S. were to match the progress of our economic competitors and expand access to its growing population, one study indicates it would need to grow by more than 10 million students.
The deleterious effects of further and large-scale cuts to higher education, combined with modest improvements to an already inadequate financial aid system for low- and middle-income students, would pose a triple hit for the U.S.
First, access and graduate rates would decline in the near and possibly long term, depending on the depth of the economic collapse and the actions of government. The U.S. already has the highest percentage of part-time students among those enrolled in higher education when compared to economic competitors -- not by choice largely, but a result of personal economic necessity. This indicates the fragility of current access rates.
Second, unemployment rates would climb higher and probably have disproportionate effects on working- and middle-class students
Third, depending on the actions of other economic competitors, most of whom have concrete national policies to expand higher education access and graduation rates (the U.S. has no such policy), the U.S. will accelerate its international decline in overall educational attainment.
A Happier Scenario
Another and much happier scenario, however, would be that the federal government, in partnership with state governments, view higher education as a vital component for economic recovery and long-term prosperity -- on par with new investments in infrastructure and stop-gap measures to stabilize housing and credit markets.
How to adequately assess options and their costs and benefits is a complicated question. For example, what would be the potential impact of greater, or lower, access to college on, for instance, unemployment rates?
At the same time, the incoming Obama administration must decide among a growing number of economic recovery initiatives, each with their own interest groups and heartfelt supporters. Everyone has his or her hand out. Weighing the benefits and costs of competing demands for federal tax dollars will be increasingly difficult.
An exploratory Commission on Higher Education, not unlike what President Harry Truman formed in 1946 but with more urgency, and possibly an initial budget overseen by the new secretary of education, could provide a larger vision and contemplate a range of options -- big-picture analysis that the myopic Spellings Commission simply ignored in its fixation with creating new accountability regimes. Accountability is not an end, but a means, and that was seemingly lost on Education Secretary Margaret Spellings, the commission’s leadership, and a cadre of higher education pundits.
President-elect Barack Obama has repeatedly noted the importance of raising educational attainment rates, and improving the quality of education in the U.S.. The Obama campaign did offer a number of important policy initiatives related to higher education. These included greater reliance on direct loans from the federal government (instead of subsidizing private bank loans), a long-overdue simplification of federal financial aid forms by linking applications to tax filings, marginal funding for community colleges to create more job- oriented programs, indexing Pell Grant maximum awards to the rate of inflation, and offering a one-time refundable tax credit of $4,000 to a student who agrees to 100 hours of public service over two years.
These are all good ideas. But they are simply not enough in light of mega-trends in the economy and America’s underperformance in education.
Short-term and immediate policies could include significant directed subsidization via state governments of their public higher education sectors relative to projected near term enrollment demand -- to essentially stop states or major public universities from capping enrollment or turning away large numbers of students. Federal Pell Grants for low-income students, already severely underfunded relative to demand, could be increased significantly in the amount awarded and the number of students receiving aid.
Resources for direct loans could be substantially expanded and made more generous with the possibility of a one-time grant for middle-income students to attend a participating public or accredited private institution that would also receive a small federal allocation. In return, these institutions would promise to reduce tuition for students enrolled in the federal program -- perhaps by 5 percent for publics, and 10 percent for selective privates. Such programs, like the GI Bill, helped to galvanize the higher education institutions in the nation, public and private, into understanding their distinct and significant role in real and anticipated hard times.
Another idea might be to tie federal unemployment compensation with access to an accredited higher education institution -- perhaps targeted to certain groups as an option.
Any infrastructure investment initiative should also focus a portion of its portfolio to support public college and university building programs that expand enrollment capacity, like classrooms, or meet research and faculty needs -- such as offices and research labs. Such a program would reflect the federal government’s brief but important investment in university and college building programs during the mid-1960s and could require matching funding from state governments or private enterprise.
There is always the question of whether to fund the individual students or institutions. Past federal policy has focused on funding of grants and loans to individuals. But there is urgency to venture, at least on a temporary basis, into funding key and largely public institutions -- the main providers who have explicit public purposes.
Long-term goals need to assess the overall health of the U.S.’s still famous, but strained, higher education system and what national and state goals might be conjured. In states with projected long-term and large population growth, like Florida, California and Texas, there has been no coordinated assessment of actual enrollment capacity. Can they grow to meet ambitious efforts to increase educational attainment levels? What would constitute a “smart growth” approach to capacity building?
Cost containment in higher education, particularly among selective institutions, and how to finance public higher education is also an important long-term policy issue that needs a macro-view. But the vast majority of public higher education, I would argue, is vastly underfunded, and not, as many critics like to crow, overtly inefficient.
What alternative models are there for financing public higher education? A national consideration of alternative funding models could help guide states, and public and private institutions, toward a funding scheme that aligns with a national goal for educational attainment. This could include providing states with guidelines and models of best practices. Issues related to fees and tuition in public colleges and universities, for instance, are almost hopelessly mired in state politics, and often misguided analysis on affordability.
For good and bad, the U.S. higher education system has been relatively stable over the past 50-plus years, subject to only marginal efforts at reform and reorganization. Stability is important for institution-building and focusing on the quality of what institutions are designated to do within their respective state network of public and private colleges and universities. But the lack of innovation and serious consideration of the overall fit of the current system with current and future economic and socio-economic mobility needs of society is already proving to be a significant problem for the U.S. -- one among many.
States should not be left on their own to reinvigorate and use their higher education systems to mitigate the economic downturn or to, essentially, chart the future labor force and, ultimately, competitiveness of the US. Simply stated, they are not now capable of charting aggressive and enlightened policies related to higher education like they did in the now very distant past. As noted, they are hampered by growing and competing demands for the tax dollar including health care, prisons, and they face significant limits on their ability to launch a spending program suitable for meeting rising enrollment demand.
Further, states generally lack a broad understanding or concern regarding issues related to national competitiveness and the larger problems of growing social and economic stratification. Arguably, now is the time for strategic period of federal government investment, targeted to individual students and supporting colleges and universities.
What will other nations do with their network of universities and colleges in the midst of the unprecedented turn in the global economy? The jury is out. Perhaps a few nations, and in particular their ministries of education, have grasped the role of higher education for mitigating the severe economic swing we are experiencing now. They will redouble their efforts to expand the role of higher education during the economic downturn, or at least protect that sector from large cuts in funding.
Those nations that resort to uncoordinated and reactionary cutting of funding, and reductions in access, will find themselves at a disadvantage for dealing with impact of the worldwide recession, and will lose ground in the race to develop human capital suitable for the modern era.
Like the Roosevelt and later Truman presidential administrations, the incoming Obama administration should more fully integrate higher education policy into its economic recovery strategy. The U.S. is at a critical juncture in effectively combating the severity of the economic downturn, and higher education will either be an important mitigation, or a large-scale drag on economic recovery. What is missing thus far is the national leadership that can do something proactive.
John Aubrey Douglass
John Aubrey Douglass’ most recent book is The Conditions for Admissions: Access, Equity, and the Social Contract of Public Universities (Stanford Press). He writes about global trends in higher education. A version of this paper was published by UC Berkeley’s Center for Studies in Higher Education in its on-line Research and Occasional Paper Series.
For the 11th time since World War II, boom has turned to bust in our economy. Recession brings change in both the public and private sectors, as industries and government are forced to rethink how and to whom they deliver products and services. The current recession will be no exception.
Higher education’s response to economic downturns, however, has changed little. States and their colleges and universities have used the same strategy in every recession of the past generation, doing less of the same -- reducing access, cutting programs and services -- and charging students and their families more. During each of the last three recessions, average tuition and fees at public colleges and universities have climbed nearly 25 percent, and enrollment has fallen in two of these recessions.
Choosing retrenchment over reform has helped to make college more expensive and less accessible and affordable. Since the last recession of 2001, the U.S. has fallen to tenth in the percentage of young adults with a college degree, the share of income needed for the poorest family to pay public college expenses after financial aid has jumped from 39 percent to 55 percent, and student loan borrowing has nearly doubled.
The world surrounding higher education has changed significantly since the last recession, in ways that make a repeat of past behavior riskier than before.
Eight years ago, the knowledge economy was still developing, and the Baby Boomers -- our best-educated generation -- were still in the prime of their working lives. Today, half of the fastest-growing jobs require education beyond high school, and the first of the Baby Boomers will reach retirement age in just two years. This means that millions of college-educated workers will be needed to fill new and existing jobs, and our current completion rates won’t meet that need.
Eight years ago, two-thirds of Americans believed that success in the work force didn’t require a college degree and a majority thought that qualified students could get to and through college. Today, more than half of Americans say that a college education is essential, and two-thirds say that eligible students are being shut out of college. The public’s demand for access to higher education and their confidence in colleges’ and universities’ ability to deliver it are on a collision course.
Despite these warning signs, we’re already seeing history repeat itself. Lawmakers in Florida are moving to allow every public university to increase tuition by as much as 15 percent per year despite widespread public opposition. Three of the nation’s largest public university systems -- the University of California, California State University, and Arizona State University -- are proceeding with plans to cap or cut enrollment amid rapid growth in their states’ college-going populations.
How do we break this cycle and redefine higher education’s response to financial crisis? It will require strong leadership at the state, system, and campus levels, focusing on priorities, productivity, and innovation.
Setting priorities involves hard choices. We believe that in the current financial crisis, ensuring accessible and affordable undergraduate education must be the highest priority. States should not cut higher education disproportionately compared to other state services and rely on students to make up the difference through tuition hikes. Colleges and universities should share resources to ensure that every eligible student can enroll, and redirect resources from high cost, low need graduate and research programs to undergraduate instruction. Both should make financial need the top priority for their student aid funds.
We see encouraging signs on this front. Governors in Maryland, Michigan, and Missouri have proposed shielding higher education from cuts in exchange for tuition freezes. In Pennsylvania, Gov. Ed Rendell has proposed a bold effort to increase need-based aid for students attending community and state colleges.
Gauging and increasing productivity is also a must. State, system, and campus leaders need to look at how money is being spent and the results of that spending, rather than simply focusing on revenues. They must also set clear expectations for institutions to regularly review these data and use them to reform or eliminate high cost, low performing programs and reinvest the savings in areas consistent with state needs and priorities.
There are positive developments in this area as well. The National Association of System Heads is working with public university systems in nearly 20 states to better measure and manage costs as part of a broader push to improve participation and completion rates for underrepresented students. One of the participating systems -- Mississippi Institutions of Higher Learning -- has changed its budget development process to include a focus on institutional spending, not just campus wish lists.
The third -- and perhaps most important -- element is innovation. Our colleges and universities are renowned for the innovations that they bring to other fields, but they focus relatively little on their own reinvention. Many promising initiatives, including dual high school/college enrollment and course redesign, operate on marginal dollars in good times and are the first to be cut when budgets tighten.
Here again, some states are showing leadership. Policy makers in Indiana, Ohio, Tennessee, and Texas are exploring new funding models that would include real incentives for retaining and graduating students, not just enrolling them.
Recessions are inevitable, but our responses to them are not. Policy makers and higher education leaders who once again decide to do less of the same and charge more for it will tell us that they had no other choice. But we know that just isn’t true.
Patrick M. Callan and Robert H. Atwell
Patrick M. Callan is president of the non-profit, non-partisan National Center for Public Policy and Higher Education. Robert H. Atwell is president emeritus of the American Council on Education, serves on the National Center’s board of directors, and chairs the board of directors of the Delta Project on Postsecondary Costs, Productivity, and Accountability.
Our nation’s system of public higher education is in crisis. Unprecedented funding cuts give us several reasons to be concerned: First, about 70 percent of American college students attend public colleges and universities, which means more than 12 million students may be directly affected. Second, many public institutions produce a wealth of valuable research that serves as an engine for both regional and national economic growth.
Less well known is that the crisis in the publics has the potential to undermine the high quality of American higher education as a whole. While state budget cuts may appear to be aimed at the publics, we will all be poorer if our renowned system is allowed to falter. As a result, everyone in the academy -- even those of us in private institutions -- should be thinking of ways to revitalize public higher education.
While there is talk in academic circles of various reforms, two specific changes would go a long way toward helping public institutions strengthen their positions: revamping public university governance, and establishing a progressive tuition structure.
A diversified model
Anyone who spends time outside the U.S. knows that American higher education remains the envy of the world. One of the characteristics that distinguishes our system from others is that the U.S. does not have a centralized approach to higher education. There is no government minister who provides a uniform curriculum or one national research agenda.
The American system is decentralized, which allows for a diversity of approaches and a significant amount of experimentation and innovation. It also fosters healthy competition. Small schools compete with large schools; publics compete with privates; comprehensive universities compete with liberal arts colleges. And there is spirited competition within these groups.
The result is an educational richness not found in other parts of the world. Some liberal arts programs specialize in teaching great books, while others excel in music and the arts. Other institutions become known for their scientific or technical degrees. There are different learning models as well, ranging from traditional classroom education to experiential learning, which involves the integration of classroom study and real-world experience.
There is no one-size-fits-all -- our students are free to choose from a wide range of educational models best suited to their learning styles and future aspirations.
The same dynamic is present in research. Although federal support for university research is a key component -- and there are certainly government research priorities -- there is ample room for faculty- and institution-driven initiatives. Myriad government and private funding sources provide support for a range of different priorities and possibilities. Some institutions are powerhouses in energy or life sciences, while others focus research efforts on economics, agriculture or urban issues.
A threat to our leadership position
Like most competitive models, the American approach to higher education works best when there is a degree of equilibrium within the system -- robust peer groups that force creativity and innovation. When a substantial sector of the group is weakened, disequilibrium is introduced, which threatens the competitive dynamic.
This is what we’re seeing today as the nation’s public institutions struggle financially. Nearly 40 percent of the nation’s colleges and universities are public institutions -- a substantial share of the overall system.
It is certainly true that private institutions have not been immune from the current downturn. We’re all aware that endowments have plummeted, fundraising is flat, and demand for financial aid has increased, putting additional pressure on strained budgets. But the public crisis appears to be both broader and deeper, with the potential to be with us for years to come.
The state of California provides the starkest example. This year, $800 million in funding cuts have forced furloughs of faculty and staff in both the UC and Cal State systems. This means that classes will become even more crowded and faculty members -- already stretched thin -- will have less time to work closely with students.
There will also be an increase in the number of students turned away. The UC system alone (not including Cal State schools or community colleges) is planning to reduce freshman enrollment by 6 percent. In a system of 220,000 students this amounts to more than 13,000 people who will be denied access.
The pain is by no means limited to California. Across the country -- from Michigan to Wisconsin to Virginia -- states are facing revenue shortfalls and making significant cuts to higher education. Even $825 million in federal stimulus -- the portion targeted for all of higher education -- is not enough to offset the extensive cuts made by state governments.
The timing could not be worse. President Obama has underscored what those of us in higher education know to be true: the nation’s economic prosperity is dependent on our system of higher education. The president has noted that jobs requiring a college degree are growing at twice the rate of jobs that require no higher education.
It is the quality of the American system that will develop the human capital needed for our economy to recover and prosper over the long term.
Opportunities for change
Of course, with every crisis comes opportunity. The current situation can pave the way for public higher education to gain some much-needed flexibility and autonomy. By unshackling these systems from some state-mandated controls, they can be revitalized and continue to play an essential role in ensuring the success of American higher education.
We will see a range of innovations such as three-year degree programs, the concept of “cyber campuses,” and more nonresidential education. Each has the potential to reduce costs or generate revenue -- or both.
More fundamental changes will be needed. Two in particular will give public institutions greater control over their own destinies. The first will be effective in the short term, while the second will empower public institutions to introduce and support long-term innovations:
Progressive tuition: We are seeing many public systems raise fees as one way to shore up their finances. But this regressive approach runs the risk of reducing access for those already struggling to pay for college. Another option would be for publics to raise tuition, while providing more need-based financial aid. By pledging that students from families earning under a certain amount -- say $100,000 -- can attend at no cost (and those above a certain threshold would pay on a sliding scale) public colleges can generate valuable revenue, while maintaining the all-important mission of access.
Reform governance: Board members at public institutions are primarily political appointees. While most are knowledgeable and dedicated, the political process by which they are appointed often results in a divergence of views and priorities. Allowing presidents, chancellors, and existing board members to appoint trustees -- standard practice at most private colleges and universities -- would strengthen the ability of public boards to play a strategic role in guiding their institutions.
More than ever, the country needs higher education to do what it does best: develop human and intellectual capital, and be the engine of progress for the nation. The future of American higher education -- and indeed the nation -- will depend on our ability to maintain a vibrant, diverse and competitive model of higher learning.
Both private and public institutions are critical in this endeavor and must be empowered to succeed.
Joseph E. Aoun
Joseph E. Aoun is president of Northeastern University.
Education Secretary Arne Duncan delivered a tough message to state colleges last month: Despite the cascading effects of the recession falling hardest on state governments, states should not expect the federal government to provide stopgap money to maintain business as usual. Duncan advised states to get creative.
Lumina Foundation for Education agrees. To increase the percentage of Americans with high-quality degrees and credentials to 60 percent by 2025, as President Obama aims to do, the nation needs quantum improvements in productivity.
We believe states must lead the way. In our experience working in and with state government, the first and hardest step toward productive creativity is penetrating inertia. When the going gets tough, there is comfort in the status quo. Working with HCM Strategists, a public policy consulting firm, we have made $9 million in grants to states as a testament to creative, courageous state leaders, and a talented, fresh team of “inertia busters.”
The “inertia busters” embody the skill set we believe is necessary to promote and deliver on the state higher education policy changes this nation needs.
This means assembling a team that included a former chief of staff to a governor, Jimmy Clarke, who knows how to run interference for politicians; a grass-roots advocate for change Ellyn Artis; a higher education faculty member Mario Martinez; and a director of a federal regional education lab, Rob Muller.
Their role was to promote and advance innovative ideas and strong leadership. As constructive critics and fierce advocates, the inertia busters helped open the door for elected officials to seize the incredible moment for change posed by the confluence of a deep recession and ambitious national degree attainment goals. By simply focusing on the change that is needed now, this team busted inertia in several ways.
1. Maintaining momentum in the face of leadership change. If the economy weren’t enough bad news, Arizona reeled after the White House took Gov. Janet Napolitano and the two education committee chairs left office. Enter an inertia buster, Darcy Renfro, who used her strong policy reputation in Arizona and legal skills to lift up the Board of Regents’ leadership while energizing a new crop of leaders. Arizona’s ambitious agenda promises a new funding model and an array of innovative ways to get Arizonans bachelor’s degrees at much lower costs.
2. Asking states the critical questions so new policies engage institutions. Maryland and Wisconsin are states where policy solutions start with institutions. Greg Nichols, a former state higher education exec, encouraged Maryland’s review of 40,000 student transcripts to understand at which colleges and in which courses productivity was most affected. Now, the community and independent colleges will join with the University System of Maryland to redesign the top 24 introductory courses and turn these courses into money-saving, student-excelling models for the entire state.
In Wisconsin, Rob Muller encouraged the institutions to identify the state policies that stand in the way of their efforts to promote swifter student progress toward a degree.
Advisers Nate Johnson, Jeff Stanley and Amy Sebring have campus level and state government experience that helped their state teams in Tennessee, Ohio and Texas, respectively, grapple with how to design and use powerful new funding incentives for course and degree completion. All three states are now poised to be national models for how campuses and legislators learn and work together to align spending with completion goals.
3. Pushing states to take the hard steps now, when resources are down, versus waiting for a sunnier day. Like most states, budget straits left Montana and Indiana struggling to maintain the most basic services. Inertia busters Judy Heiman and Jeff Stanley saw opportunity in this crisis.
Judy’s experience in the governor’s office and legislature in states on both coasts and Jeff’s career on Indiana’s campuses and state higher education commission afforded them a unique perspective to affirm the importance of a potentially unpopular change.
Both states used funds from the federal American Recovery and Reinvestment Act to make higher education more cost-effective now. For example, Montana halted all new construction and used federal stimulus dollars to develop a university portal and online infrastructure that will serve far more students with high-quality courses that are available more hours and in more places. Indiana used stimulus funds to expand its share of total state funding dedicated to completion incentives.
The contribution of the inertia busters and seed grants are small in proportion to that of elected leaders who deserve the ultimate credit for the work to date. Governors and state legislators will continue to take the heat and muster the courage to change deeply embedded policy and practice.
But the “inertia buster” difference maker is so important that we are commending this role to others looking to promote state policy change.
Kristin D. Conklin and Suzanne Walsh
Suzanne Walsh is a senior program director at Lumina Foundation for Education where she leads the foundation’s productivity work. Kristin Conklin, a founding partner of HCM Strategists and principal lead for Lumina's state productivity grants, has spent 15 years working on college readiness and success with state and federal policy makers.