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As a nation, we can’t fool ourselves into thinking we can build our way out of the coming educational crisis.

After World War II, America’s policy makers and business leaders recognized that the country would need more college graduates if it was to realize its economic and cultural potential. They set about rapidly expanding institutional capacity, building out the public university systems as we know them today.

It worked. As many as 30 to 40 percent of adults earned a postsecondary degree. While most of those new degree holders were white and came from middle class and relatively affluent backgrounds, they positioned the United States to become an economic powerhouse, just like the system designers predicted they would.

But now the demands of the knowledge economy have changed the playing field. By 2025, 55 to 60 percent of working-age adults will need college degrees, work-force certificates, industry certifications or other high-quality college credentials to meet the country’s work-force needs.

Instead of inventing a new blueprint, our leaders keep looking back to the old one. Unfortunately, that plan is nearly maxed out. If we are to meet the challenges of the 21st century, we need a new way.

It’s time for a new public compact between students and families, colleges and universities, state governments, and business leaders centered primarily on the needs of students, not institutions. Specifically, that means making the first significant, sustained and transformative investment in low-income, first-generation, minority and working-adult students. To do this, some states will need to spend more money on education. Other states will have to spend money smarter.

At the Institute for Research on Higher Education at the University of Pennsylvania Graduate School of Education, we recently completed the College Opportunity Risk Assessment. We analyzed the landscape of intersecting risks to postsecondary educational opportunity, such as how a state prepares its high school students, how it engages nontraditional college students and how it supports minority students, as well as the state’s fiscal health and stability.

Since higher education policies and practices vary widely by state -- a consequence of not having a national higher education system like most other developed countries -- the areas of strength and weakness vary, too. For instance, California faces serious risks related to the cost of certificates and degrees, while risk in Illinois is most acute due to the state’s lack of a rainy-day fund and its large debt and unfunded liabilities -- particularly public-sector pensions.

Still, some themes emerged that can be the building blocks for this new public compact.

Understand reality. There are simply not enough 18- to 24-year-olds who could earn degrees to fix our credential deficit, especially in aging Northeast and Midwestern states. We need to bring more working-age adults into higher education.

Policy makers can look to Tennessee Reconnect program, which is changing perceptions in Tennessee about what it means to be a college student. Through financial support and college counseling, the program targets adults who are first-time students, students who have enrolled in higher education but have not completed their degree programs, and service members and veterans.

Creating more programs like Tennessee Reconnect would require shifting some of state governments’ attention and resources toward the institutions that educate most Americans, such as community colleges and regional comprehensive colleges.

Don’t drop the dropouts. The national college dropout rate -- meaning students who haven’t earned a bachelor’s degree six years after enrolling -- is 56 percent. Many of those students aren’t leaving because they are bored at college or can’t do the work. They drop out because the immediate costs are too great. Or because they are not receiving the level of academic support they need. Or because they feel isolated as one of the few members of an underrepresented group on campus.

If even half our current dropouts made it to graduation, we, and they, would be in a much better situation. Some states have successfully increased graduation rates, albeit at a slow pace. No one policy can account for statewide improvements; rather, a “family” of public policies in each of the risk categories must push in the same direction to improve performance. The state that is closest to developing this family of policies is Tennessee by aligning policies to improve educational performance and finance.

Rebalance the financial burden. On a per-student basis, public colleges have more money flowing through them than ever before, but students are supplying a greater share of that revenue through tuition while states’ contributions have proportionally fallen. What’s more, tuition has risen at the same time that other out-of-pocket associated costs of attending college have boomed.

We can’t meet our work-force needs without creating a more equitable system of higher education. And we can’t create a more equitable system by asking all students to pay more when many of them can only do so by borrowing. Some states (Illinois, Minnesota and Pennsylvania) have addressed this issue by freezing tuition -- a short-term strategy, but one that provides needed relief to students and families. Few states, however, have linked increases in tuition to changes in family income, as Maryland did before the recession. That approach provides stability and predictability, and more states should consider it.

Investment in need-based financial aid is another strategy to reduce the burden on students. After years of Illinois students leaving the state for opportunities elsewhere, the state has stabilized funding for its once-highly regarded Monetary Assistance Program: a need-based financial aid program supported with state funds. More needs to be done, but Illinois may begin to correct for its long, sad decline in support for higher education and its students.

Fix your pension system and build a rainy-day fund. We often focus on higher education allocations, but our analysis shows we should also pay attention to other areas of a state’s budget. Some states -- including Indiana, Minnesota and North Dakota -- experience less revenue volatility than others, but that doesn’t mean they have identified risks in other areas.

Great volatility in their general fund expenditures, underfunded pension plans and low state reserves are all warning signs for a higher education system at risk. It will be a challenge for lawmakers to shore up these areas while also maintaining or increasing the money earmarked for higher education. But if these lawmakers don’t act, the ongoing fiscal challenges will drain away the money that could open college classrooms to the wider group of students we need to reach.

Ensuring the future of educational opportunity for generations to come will require states to develop public policies in educational performance, equity, higher education funding and productivity, and broader economic policies. No one policy solution can be the silver bullet. Public policies for higher education must go beyond those often considered by higher education committees to those that recognize higher education as driving economic development and serving the purposes of a modern democracy.

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