Remarks by Jamie P. Merisotis, President and CEO, Lumina Foundation for Education
Connecticut Board of Governors for Higher Education, Hartford, CT
April 13, 2011

Thank you for the invitation to speak with you today. Many of you know that I have more than a passing interest in the economic and social well-being of this state. My parents raised our family in Manchester. My 88 year-old father, a New Hampshire native who now resides just a mile from here, arrived in Connecticut almost 60 years ago after serving his country in World War II. He and my mother managed to not only raise a family with limited resources, but also instilled in all of us a strong belief that education is the most important path to prosperity. Neither of them ever made it to college. But two generations of the Merisotis family—most of them still in the state—have benefited from excellent public schools and nationally regarded colleges and universities.

In many ways, the state of education in Connecticut historically has been strong. Sixty-eight percent of the state’s high school graduates go directly to higher education. Forty-seven percent of adults in the state have at least an associate’s degree compared to 38 percent nationally. The state ranks 7^th nationally in the proportion of residents who hold a postsecondary degree.

But past is not necessarily prologue—for Connecticut, or any other state. Facts show clearly that increasing higher education attainment is essential to the nation as a whole. Why? Because, at the most fundamental level, the nation’s workers and citizens simply won’t have the knowledge and skills they need to succeed in today’s globally-competitive environment.

The Georgetown University Center on Education and the Workforce has estimated that by 2018, two-thirds of all of the nation’s jobs will require some form of postsecondary education or training. That’s a huge increase since the mid-’70s, when less than a third of jobs required any education beyond high school. Here in Connecticut, 65 percent of jobs will require postsecondary education by 2018. Between now and 2018, Connecticut will need to fill about 600 thousand vacancies resulting from job creation, worker retirements and other factors.

Today, other states are increasing the share of their young adult population with a college credential more quickly than Connecticut is. The state is now ranked 34th in the growth of the population aged 25-34 who hold an associate’s degree or higher—well behind other New England states. Nationally, Connecticut has dropped from 4th to 7th in the percentage of all adults with postsecondary degrees since 2000.

Like most U.S. states, Connecticut’s economic and social well-being will increasingly be defined by the skills and knowledge of its citizens. This state must focus on expanding educational access and success, and it must do so according to a detailed set of strategies and plans that this board, the state’s colleges and universities, its employers, and its policy leaders all embrace. This is what Lumina Foundation has been focused on as we work to assist states in advancing their higher education agendas.

Let me briefly pause to tell you a bit more about Lumina Foundation for Education. Lumina is a national foundation with assets of about a billion dollars. We are committed to one mission: enrolling and graduating more students from college—especially students from low-income families, minorities and students of color, first-generation college-going students and working-age adults. In fact, we are the largest private foundation in America that focuses exclusively on this mission. We pursue our mission in a targeted way. All of our energy and resources are focused on achieving one ambitious but specific goal for raising college attainment, what we call “Goal 2025” or simply, the Big Goal.

This Big Goal is that by the year 2025, 60 percent of working-age Americans will hold high-quality college degrees or credentials. Today, the national degree-attainment rate is hovering just below 40 percent—here in Connecticut you are doing better with 47 percent. But there is still a long way to go to reach 60.

At the same time, your state is continuing to lose ground in college completion compared to your neighbors. That slide is exacerbated by the low degree completion by all students and especially minorities. Three- year graduation rates at community colleges are only 13 percent for white students and only six percent for minority students. At the Connecticut State University System, six year graduation rates for white students are only 48 percent and for minority students it is 10 points worse. This is not sustainable and represents a major challenge for the state as a whole—not just its colleges and universities.

To reverse these trends, Lumina Foundation believes there are three essential steps to get the state back on the track for national leadership and economic competitiveness: setting goals, publicly reporting and using common completion metrics, and aligning funding to meet these goals. Let’s begin with the first of these points. It is imperative that Connecticut set statewide completion goals that are broadly agreed upon by the key stakeholders. These goals also should be defined at the institution level. This will ensure that every campus in the state knows how many students they are responsible for graduating to meet the needs of the state and the country. This will also allow you to know which groups of students are struggling and may require new and different support and incentives to graduate in a timely fashion.

Once your campuses share a common direction through completion goals, I encourage you to take advantage of the common completion metrics adopted by the National Governors Association. These metrics measure student movement to and through certificate and degree programs. They are about shining a light on gaps in the current accountability system particularly in areas such as credits to degree and developmental education. To effectively diagnose where there are gaps, the state should report these metrics annually to the public in a user-friendly manner. They should also be disaggregated by age, race, and income so that we can tell who is being well served by higher education and where we can improve. There are two policies in particular that are common sense ways to help you achieve these goals. One is funding colleges based on completion, and the other is revising financial aid policies to support timely completion.

Earlier this year, Governor Malloy signaled his desire to reward colleges for increases in performance, rather than for enrollment, or what peers spend, or across-the-board increases or decreases over last year’s funding. About 15 states today have legislation or are actively pursuing funding revisions that learns from the experimentation of the late 1990s. These funding policies and proposals generally follow four basic principles:

• Using simple and understandable formulas with a primary focus on student success, such as course and degree completion;
• Recognizing institutional differences– two-year schools and four-year research universities are different and this should be reflected in the what and how of performance measures;
• Including progression measures, such as year-over-year increases, to protect against large fluctuations of funding among institutions; and finally
• Committing a meaningful amount of total appropriations performance.

Their efforts point the way for how Connecticut can signal to its colleges that meeting completion goals is a top public priority.

Difficult budget times should not stall these efforts. In fact, Indiana used completion metrics as a tool to allocate necessary mid-term budget cuts in early 2010. As a result, colleges and universities that were doing a better job in meeting the state goal of increasing completion saw their budgets cut less than others.

We have also seen indications that performance-based funding works. In Pennsylvania—after a decade of gradually increasing the percentage of state funding allocated on the basis of performance—today 7% of state funding flows based on improvements—graduation rates have increased nearly 10 percentage points. This growth occurred even as enrollment was increased and admissions standards remained unchanged. Persistence to the second year has also increased, especially for Hispanic students, whose rates have jumped nearly 15 percentage points.

The financial incentives I have suggested for colleges should be mirrored in clear incentives for students. There are ways to reward students for behaviors that increase the chances for completing a degree. You can limit the number of semesters or credits during which students are eligible for aid. You can require a college preparatory course of study. You can encourage and reward them for taking a full time course load. Recently, Connecticut’s community colleges started developing financial aid packages assuming students would enroll full-time. When students saw they could afford to go to college full-time, they responded.

States like Oklahoma show the way for Connecticut to refine the conditions by which students keep their need-based financial aid—and strengthen incentives for completion. Oklahoma’s Promise scholarship serves students from families making less than $50,000. To be eligible, it requires a college-preparatory high school curriculum, and a minimum high school GPA—since research shows that a rigorous high school education is the best predictor of completion. The program covers the student’s full tuition at an Oklahoma public college but limits eligibility to five years of tuition and requires students maintain a minimum GPA. Over almost 20 years, the scholarship has shown an impact on student success:

• 81 percent of participants enroll in college the year following graduation, versus 58 percent of all Oklahoma high school graduates.
• After starting college, students in Oklahoma’s Promise have lower remediation rates and are more likely to maintain a higher first year GPA than the overall college student population in the state.
• About 83 percent of Oklahoma’s Promise students persist from freshman to the sophomore year, versus 70 percent of all Oklahoma college students.
• Fifty-one percent earn a college degree within six years, compared to 40 percent of all students.

This impact could be duplicated in Connecticut.

We know these suggestions are aiming high. But that is a necessity, not a luxury. We also know it will not be an easy path to success. We all have a long way to go to reach that 60 percent goal, in Connecticut and throughout the nation. But in our view, the achievement of these goals is vital—not only to maintain a good quality of life for individual Americans, but to ensure the long-term stability and security of our society as a whole. What’s more, we at Lumina are convinced that this ambitious goal is achievable.

Thank you again for the invitation to speak to you today on matters of importance to Connecticut and the nation. Raising the education attainment of Connecticut’s citizens represents the best investment possible to ensure this state’s economic and social well-being, and I commend you for your commitment to achieving that outcome.