Remarks by Jamie P. Merisotis, President/CEO, Lumina Foundation
Rotary Club of Indianapolis

Thank you, and good afternoon, everyone. I’m pleased to be with you today, and I’m truly honored to have been asked to address this historic organization in the city I love to call home. For nearly a century, Indianapolis Rotarians have been making this city better by acting on the club’s motto, “service above self.” Today, I want to talk about another way we can all be of service to this city and its residents, and it’s a specific area of service that you might not have considered: I want you to be college champions.

Now, I don’t expect you to go out and win an NCAA title—though if you’re up to that task, I say go for it. Instead, what I’m asking is that you make a commitment to help increase college attainment here in Indianapolis. As college champions, I want you to encourage and support your friends, your family members, your co-workers and employees … everyone you know who is on the path—or should be on the path—that leads to a college degree or credential. And let me be clear that, when I say “college,” I don’t just mean the traditional four-year degree. I mean all types of quality post-high school education, including associate degrees and certificates. Believe me, having a college credential matters; it matters now more than ever, and it matters to all of us—not just to the person who earns it.

In my remarks today, I hope to explain just how important it is that we increase college success rates. In fact, I’ll try to show that boosting college attainment is absolutely vital—to our nation’s economic recovery … to the prosperity and security of this state and this great city … really, to the future of every American. More important, I will share some ideas for how you can aid this vital effort right here in our hometown.

Before I delve too deeply into the topic, however, it might be helpful to tell you a bit more about the foundation. As you know, Lumina Foundation is based right here in Indianapolis. Actually, my office window gives me a nice view of the Soldiers’ and Sailors’ Monument on the Circle. But Lumina’s scope is national rather than local. In fact, we are among the nation’s largest private foundations. Unlike most of our peer organizations, however, Lumina has a specific and focused mission that aims at just one cause: enrolling and graduating more students from college—especially low-income students, students of color, first-generation students and adult learners. That mission is operationalized with even greater specificity through what we call “Goal 2025,” or sometimes just the Big Goal. Simply stated, by the year 2025, we want 60 percent of Americans to hold high-quality college degrees, certificates or other credentials.

Clearly, as a nation, we have a long way to go to reach this goal. According to the latest figures, only about 38 percent of Americans between the ages of 25 and 64 have at least a two-year degree. Here in the Indianapolis metro area, the picture is a bit brighter, with 41 percent of working-age residents holding at least an associate degree. But things are well below average in the state as a whole, with only one in three working-age Hoosiers—33 percent—holding a two-year degree. More importantly, both the city and the state are well behind where we need to be. I’ll come back to that point in a moment.

As you can see in the excerpts that we’ve provided to you this morning from Lumina’s signature report on college degree and certificate completion—an annual update titled A Stronger Nation through Higher Education—the data all point to one urgent message: Nationally, in nearly every state, and certainly here in the Indianapolis area, college-attainment rates are well below the level that positions us for success and stability in the 21st century global economy.

As all of you are aware—sometimes personally and painfully aware—American companies and workers no longer merely compete with their counterparts in nearby states or regions. Today the competition is worldwide … and it is fierce. Unfortunately, when it comes to preparing the nation’s labor force, we’re slipping dangerously. College-attainment rates are soaring among young adults in many other nations, but our rate has remained essentially flat for decades. Figures released by the Organization for Economic Cooperation and Development in 2011 put us in eighth place. And now, according to their 2012 report, we’ve fallen to 15th in the proportion of 25- to 34-year-olds who have obtained a two- or four-year degree. Clearly, this stagnation is very troubling. We need to ramp up if we hope to keep up.

Now, and certainly in years to come, workers without college-level learning simply won’t have the knowledge and skills they need to succeed. In fact, the Georgetown University Center on Education and the Workforce has estimated that by 2018, 55 percent of all jobs here in Indiana will require some form of postsecondary education or training. That’s a huge increase since the mid-’70s, when only about a quarter of those jobs required any education beyond high school.

That means, in the next six years, this state will need to fill 930,000 vacancies resulting from job creation, worker retirements and other factors. Of these expected vacancies, well over half—about 500,000 jobs in Indiana—will require postsecondary credentials. In short, we have a huge gap to fill. And failing to do so will result in devastating losses: massive amounts of unrealized human potential, tens of thousands of Hoosier jobs that are likely to go uncreated or unfilled.

Now, I know what some of you may be thinking right now. “Jobs? What jobs? Aren’t we talking about educating people for jobs that don’t exist?”

Well let’s talk about that. Here are some things we know. First, the unemployment rates for those with college degrees are considerably lower than for those without postsecondary credentials. This is true even in these troubled economic times. According to data from late 2011, national unemployment rates for 18-24 year olds (not enrolled in school) were below 9% for BA recipients and 12% for AA holders, compared to a whopping 23% for those with only a high school credential.

We also know that wage differentials for people with college degrees compared to those with high school credentials are wide. That’s a fact that we’ve understood for many years—if you go to college, you make more money. What you may not know is that this differential in wages is actually growing. Individuals with a bachelor’s degree make an average of 84% more over their lifetimes than those with just a high school diploma. This is an increase even since the late 1990s, when the differential was about 75%.

These statistics show clearly that the labor market is hungry for college graduates. Even in this tight job market, employers are willing to pay an increasing premium for college graduates … because more and more of these employers are having difficulty finding the types of skilled workers they need. And employers aren’t just looking for workers with technical knowledge, though that is certainly important. Today’s jobs also increasingly demand the “soft skills” that college-level learning provides … the critical thinking and analytical skills that make workers more adaptable in an ever-changing workplace.

Make no mistake: The skills gap is real, and it is growing. And we needn’t look too far beyond Indianapolis for proof. Consider these facts:

  • A recent review of job postings on CareerBuilder.com showed nearly 1,600 job openings in Indiana that required some form of postsecondary training: 673 in healthcare, 460 in engineering, 278 in information technology and 286 in manufacturing.
  • Just a few weeks ago, in a detailed survey of more than 550 Indiana CEOs, business leaders lamented the skills gap in no uncertain terms. The survey report cited “the lack of a trainable workforce” as a key factor in the painfully slow pace of economic recovery in Indiana.
  • Similarly, in its the most recent report card, Conexus gave the state a C-minus for its availability of workers who can fill technical jobs in advanced manufacturing and logistics. Last year, the state’s human capital grade from Conexus was a “C,” but slow progress in the number of Hoosiers earning associate degrees led to the downgrade.
  • Progress Rail Services, a division of Caterpillar, announced about a year ago that it planned to hire 650 workers for its advanced manufacturing facility in Muncie. Recently, officials reduced that number to just 250, saying they were having trouble finding qualified applicants.
  • AAR Corporation, which inspects, maintains and modifies commercial aircraft, recently launched two on-the-job training and apprenticeship programs at its Indianapolis International Airport facility. AAR Vice President Timothy Skelly explained why the programs were needed: “There are just not enough qualified people out there, so what we’re trying to do is grow them ourselves.”

Those are just a few close-to-home examples that show the growing urgency for increasing educational attainment. And there’s another compelling truth —one that has huge implications for our future: Increasing college success isn’t just a way to fill existing jobs; it’s actually a proven means to stimulate job creation.

Economists tell us that much of the nation’s economic growth over the last half-century is largely attributable to two things: technology and increased educational attainment. Why are these two so important? Because they increase productivity, and productivity growth is the engine that drives all advanced economies. Talent is the vital element, and higher education is the lever for developing it.

The key to the nation’s long-term economic success is a 21st century labor force, one with adaptable workers who possess high-level skills and relevant knowledge. And those skills … that type of knowledge … can only be offered in well-designed and rigorous postsecondary programs. Again, here’s the key takeaway: You’re much more likely to land and hold a rewarding, well-paying job if you have some type of college degree or certificate. And in the near future, if you don’t have that college credential, you’re almost certain to be poor.

Of course, the benefits of higher education aren’t just economic, and they’re not just limited to individuals. In fact, the social and cultural benefits of a well-educated population are enormous. We all know—and social science research actually shows —that college-educated citizens are more globally aware, more engaged, more apt to make reasoned and ethical decisions than those who lack higher education. So, higher college-attainment rates mean lower crime rates, less reliance on public assistance, better health, and increased levels of civic involvement such as voting and volunteering. Also, we all recognize equity of opportunity as a shared value. Every person, regardless of finances or family circumstances, deserves the chance to succeed and contribute to our collective well-being. Like nothing else, higher education offers that opportunity.

For all of these reasons, then, we at Lumina are committed to reaching that Big Goal I mentioned earlier; that is, ensuring that 60 percent of our citizens hold high-quality college degrees, certificates or other credentials by 2025. We know Goal 2025 is ambitious. In fact, we know it can’t be reached without the concerted and cooperative effort of stakeholders from every arena, including K-12 and higher education, federal and state government, business and labor leaders. So let’s examine a few of the steps that these various stakeholders can take … that you, as concerned citizens of Indianapolis, can take … to help in this vital effort.

It’s clear that we must tighten the connection between college success and economic success … and that connection must be tightened from both sides. Let’s start with what might be called the “supply side” of the higher-ed enterprise—that is, higher education institutions and systems, and the policymakers who help create the environment in which those schools and systems operate.

On that side, institutional leaders and government officials must do a better job of listening and responding to the needs of employers. They must show greater willingness to work in true partnership with the business and workforce-development community … to give students what they truly need to succeed on the job, and in life. And they must eradicate the false distinctions between what many tend to revere as “higher education” and what they often deride as mere “training.” It’s well past time for a full realization that virtually all skills are workforce-relevant and that all are constantly evolving.

There are some very encouraging signs here in Indianapolis that such changes are in the works. Institutions are striving to be more focused on the needs of students; they are working cooperatively with local employers to meet workforce needs. Let me cite just a few examples … including some specific projects that Lumina is actively supporting here in central Indiana.

  • First of all, for many years, Lumina has worked with the Central Indiana Community Foundation to support the College Readiness Fund, a funding collaborative that has done much to improve and expand college access here in Marion County. This fund has provided all types of training and support for the good organizations that offer pre-college access counseling, mentoring and support to youth in our city.
  • Another, more targeted project directly addresses local workforce demands and provides a great first step for students entering higher education. In this effort, Conexus is working to develop a turnkey course of study that will allow high school students and middle-skill adult workers to earn an industry-recognized credential in advanced manufacturing and logistics.
  • Yet another important bridge, and a much larger one, can be seen in the ongoing transformation of Ivy Tech into a true, statewide community college system. For decades, the nation’s community colleges have been a vital, yet vastly underappreciated resource. Now, in many ways, they’re taking a leadership role in higher education, and Ivy Tech certainly fits that mold here in Indiana. It does this by providing high-quality, workforce-relevant programs at reasonable cost, by tailoring programs for working adults, by serving as an entry point for students who later transfer to four-year programs, and by working hard to meet the needs of students who often face significant barriers to success.
  • I’ll point out two particular programs in which Lumina and Ivy Tech are active partners—two programs aimed squarely at increasing the number of degree holders here in Indiana.
    • The first, in which Indiana University is also a partner, aims to boost attainment rates among the students we call “near-completers,” that is, adults who dropped out of their programs after earning at least 45 credit hours toward an associate degree or 90 hours toward a four-year degree. The idea is to seek out these adult students, actively recruit them to return to school, and then give them the support they need to earn their degrees.
    • The second Ivy Tech effort is the Accelerated Associate Degree Program, or ASAP. As its name implies, this program gives students the opportunity to earn a transferable or workforce-credentialed degree quickly—in one year, instead of following the traditional two-year track. Success rates have been impressive, with nearly 90 percent of ASAP students either earning a degree or remaining enrolled after 12 months. This is a success rate five times that among all Ivy Tech students, and 10 times better than the average for at-risk, low-income students.
  • Finally, another highly successful effort that you’ve heard a lot about on television and in other media: Western Governors University-Indiana. WGU-Indiana is an accredited, nonprofit, university that offers a variety of online programs, largely for working adults. WGU students earn credit by clearly demonstrating their learning, not by spending a certain number of hours in class. We at Lumina are convinced that this shift—from a time-based system of credits to one that puts competencies at the center—is huge. In fact, we see it as a vital first step in a fundamental and much-needed redesign of the American higher education system.

Perhaps the best indicator that this redesign is needed is one you’re all familiar with: that is, the very real problem we have with college affordability. For decades, American higher education has relied on two major sources of funds: government appropriations, and the tuition and fees paid by students and families. When one source was in short supply, institutions looked to the other. Funding from both of these sources has increased significantly and steadily to meet rising college costs for many years. Well, now we’ve hit the ceiling. Neither government nor students can afford these continuing cost increases. The money, and the political will, are just not there. Yet the demand—and the societal need—for increased college attainment is greater than ever.

That’s what Goal 2025 is all about: meeting that rising need. We need to scale up the system so that it can produce the numbers of graduates that our economy needs, all while maintaining or improving the quality of its graduates … and without the likelihood of major new investments made by the federal government, states, parents and students.

In short, we need a more productive higher-ed system—one that ensures quality by fostering genuine learning … a system that truly prepares students for work—and for life—in a global society.

At Lumina, we believe strongly that higher education needs to be far more focused on the needs of students and less on the needs of higher education institutions. And it’s critically important that we focus on today’s students—the ever-growing number of low-income, first-generation, minority and adult students who constitute the “real world” on campuses these days.

Ultimately, this means that higher education must be more student-centered. By better serving its main customers—students—the postsecondary system will also meet the needs of employers, not to mention meeting our collective needs in American society itself.

And that brings me to the “demand side” of the higher-ed enterprise. This includes students, to be sure, but also employers and workforce-development officials. Without question, the business community—the demand side—has a major role in making Goal 2025 a reality. And my Lumina colleagues and I are doing more and more these days to encourage employers to seize that role.

In practical terms, we’re asking the employer community to view its role in the Goal 2025 effort from three perspectives or through three lenses: company, community and country.

From the company perspective, each employer can take direct and meaningful steps to aid college attainment among its own workers. Some examples:

  • More and better programs that provide tuition reimbursement.
  • Flexible work scheduling to allow workers to attend college classes.
  • Assistance and counseling to help create individualized learning plans for workers, including encouraging prior learning assessments to recognize college-level learning already acquired. This will both accelerate time to the credential and hold down the costs of credential completion.

These and other incentives for employees should be developed to help employees pursue certificates, degrees and credentials of all kinds.

Next, from the community perspective, employers should make education a central plank in their platform of community engagement and service. In fact, boosting attainment should be at the top of the list when it comes to corporate responsibility efforts. What better way to demonstrate good corporate citizenship than to foster an “education-friendly” workplace?

Finally, and most broadly, employers need to view this effort through the larger lens of country. Business leaders here in Indianapolis—and really, all of us as Americans—need to be advocates for increasing college attainment because that’s what the entire country needs.

In other words—and in closing—Goal 2025 isn’t something for Lumina to achieve. It’s not a wholly owned effort of philanthropic foundations … or employers … or state and federal policymakers … or the higher education community. It is—and it must be—a broad-based, inclusive and intensive effort that we all embrace.

To succeed, we need college champions from every walk of life and in every area venue—from IPS classrooms to corporate boardrooms … from the restaurants in Broad Ripple to the food court counters in Circle Centre Mall … from suburban soccer fields to the city’s blacktop courts … from church basements to the skyboxes at Lucas Oil Stadium.

Everyone in this room has felt the transformative power of education. And we all know that power needs to be more broadly shared here in Indianapolis. I urge you to do all you can to make that happen because the payoff can be huge … for all of us.

Thank you for the opportunity to speak with you this afternoon.

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