The economy of the United States is going through a dramatic transformation, and millions of Americans are struggling to find their place in the emerging knowledge economy. Most state policymakers and higher education leaders no longer doubt that the U.S. must dramatically increase the number of students who earn high-quality post-secondary degrees and credentials, because skills and knowledge are the essential building blocks with which economic growth and prosperity are created. But states are struggling with unprecedented financial challenges which are resulting in actual reductions in higher education funding. Colleges and universities are struggling with their own challenges, including record enrollments, demands for greater accountability (including elusive expectations for quality), and a financial model that seems incapable of responding to the challenges before it.

Given these enormous challenges, Lumina Foundation believes that reaching the levels of higher education attainment the nation needs—60% by 2025—requires fundamental changes in all aspects of higher education. Public policy can be the primary driver for creating the change in higher education that the nation needs, but higher education policy itself must be reinvented.

What do states need to do to increase higher education attainment to the levels they and the nation need? Given the overwhelming financial constraints on state budgets, simply scaling up the current system—even if that were possible—is not an option. Lumina proposes that Governors, legislators, and other key state policymakers, working in close collaboration with employers and higher education leaders, pursue three priority strategies to increase higher education attainment to the levels states must achieve:

  1. Set a specific state goal for attainment, and develop interim measures of progress: The first step to increasing attainment is to set a specific state goal that can be used as a basis for all future decisions affecting higher education in the state. Tennessee, Ohio, Texas, Arizona, and Oregon have all set state goals for attainment, and these states are already seeing a dramatic shift in the way higher education decisions are framed and addressed.

    State goals for attainment also lead to the need for interim measures that help to point the way toward the eventual achievement of a state goal. A clearer recognition of the data needed to measure progress and improve system performance is therefore essential. Quality data focuses attention where it belongs—on students and the learning outcomes they are achieving, and not institutional characteristics or resources. Several promising approaches have emerged in recent policy discussions that merit further investment. Among the specific approaches states can pursue are:

    • Create unified student unit record systems that link K-12, higher education, and workforce data
    • Collect, publicly report, and use at the campus and state levels common metrics that measure progress in attainment, completion, costs, and affordability
  2. Focus scarce state resources on higher education productivity and completion: In this environment, states should target their resources overwhelmingly to produce more college graduates. As simple and logical as this step seems, most state funding is geared either to institutional characteristics or enrollment, with little or no support specifically targeted to helping students succeed. While this practice is educationally suspect even in the best of times, in this environment it cannot be justified. Among the specific approaches states can pursue are:

    • Reward institutions that focus on students completing quality programs
    • Reward students for completing courses and programs
    • Expand and strengthen lower-cost, non-traditional institution options
    • Invest in institutions that adopt good business practices
    • Create accelerated associate degree programs targeted to working adults and displaced workers, and when possible, expand them to all students
  3. Align K-12 and higher education standards and assessment: States are rapidly coming to the realization that the most important outcome of K-12 education is that students be prepared for success in higher education. Surprisingly, public policy is not usually based on this assumption, but this is changing. The Common Core is a big step in the right direction, but states need to assure that the standard for high school graduation is that students are ready for college. It is not enough, though, to align standards. The assessments used in K-12 education, and especially in high school, need to tell students and their teachers and families whether or not they are ready to move directly into credit-bearing courses. The definition of college-ready that states should use is simple—that students do not need remediation in college. Among the specific approaches states can pursue are:

    • Align college placement exams with the new common core standards, and offer these exams in high school
    • Establish a state college outreach network that reaches all students by the 8th grade
    • Assure state and institutional financial aid is targeted to the success of low income students

While these three priorities outline the state policy agenda for all states, each state will need to develop and implement specific policy strategies that meet its particular needs and objectives for increasing degree attainment. Each state is unique in terms of its higher education governance structure, funding approach, range of institutions, student demographics, and economic needs. All of these variables—and several more—mean that the specific plan to increase attainment will be unique to each state.

Lumina Foundation will work through its projects, partner organizations, and, in some cases, directly to help states develop and implement plans and strategies to increase attainment and reach the Big Goal.

In accordance with section 4945 of the Internal Revenue Code and regulations of the Treasury Department, Lumina is prohibited from lobbying. All of the Foundation’s policy work must comply with the requirements outlined in section 4945 and the related regulations.

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