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Postsecondary Education: The Case for Systemic Change

Jamie P. Merisotis, President & CEO, Lumina Foundation
Luncheon keynote speech, Skilled Workforce State Summit, Minnesota Chamber of Commerce, St. Paul, MN

Thank you, and good afternoon everyone. I’m very pleased to be with you today, and I’d like to thank David Olson and his colleagues at the Chamber for inviting me to join you for this important summit. It’s good to be back in the Twin Cities. I’ve spent a fair amount of time here over the last decade or so, including serving as board chair of Scholarship America prior to the start of my tenure as Lumina Foundation’s president in 2008. This is a wonderful community, with a tremendous diversity of people and cultures, an effective and prosperous business sector, and a deep sense of community pride and commitment.

Rigorous, relevant college-level learning is the key element in making Minnesota the skilled workforce state

Of course, the chance to renew old acquaintances is really just the icing on the cake for me. The thing I’m most excited about—and really, the reason I am here today—is to lend whatever help I can to the important work that the Chamber has embraced … and that all of you have undertaken. Your task is clear from the title of this event, and from the substance of the conversations you’ve been hearing all morning: making Minnesota “the skilled workforce state.” You’ve already heard from speaker after speaker that higher education—rigorous, relevant college-level learning—is the key element in accomplishing that task.

I am here to underscore that message—a fact that surely surprises no one, given my role as president of Lumina Foundation and our focused commitment to the achievement of Goal 2025: By the year 2025, we want 60 percent of Americans to hold high-quality college degrees, certificates or other credentials. Our relentless emphasis on college access and success also makes clear why it’s so easy—and exciting—for me to support your efforts to put college attainment at the top of the state’s workforce agenda.

One of the most striking things I see from the outside is the record of achievement you’ve attained, especially compared to other states. When it comes to fostering success in higher education, the stakeholders in this state have done a commendable job and amassed an enviable record. For example, we know that more than a half-million students are being served each year in more than 200 postsecondary institutions here in the state … institutions whose combined budget is around $7 billion.

We also know that Minnesota has a proud history of innovation in higher education. Two quick examples of this, one from the past and one that’s quite recent:

  • The concept of “early-college” was essentially born here in the mid-1980s, when Minnesota launched the Post Secondary Enrollment Options program. PSEO’s dual-enrollment concept meant that high school students could earn associate degrees concurrently with their high school diplomas. The idea of dual enrollment was radical at the time, but it’s since been embraced by hundreds of schools and systems throughout the nation.
  • More recent is the interdisciplinary, workplace-relevant approach that’s being taken at the University of Minnesota-Rochester that Chancellor Stephen Lehmkuhle gave you a taste of this morning. By the way, you can read more about what’s going on in that “shopping mall school” in the copy of Lumina’s “Focus” magazine that you’ll find in the packet that the Chamber has prepared for you today.

But perhaps the most obvious aspect of that record of achievement is that the college-attainment numbers here in Minnesota are good in comparison with other states—and well above the national average of 38 percent. According to the most recent Census figures, 45.8 percent of the state’s working-age residents—that is, Minnesotans between 25 and 64 years old—have at least a two-year degree. Among younger adults, those between 25 and 34, the rate is 49.9 percent. In both cases, only two states have attainment rates that are higher.

So, as you can see by these examples, Minnesota has an enviable record of support and success in higher education. And that record is certainly no accident. It stems from the hard work and dedication of educators and administrators at every level. It stems from the cooperative efforts among a range of stakeholders—the kind of collaborative spirit that has led all of you here today. It stems from committed leadership—the kind shown by David Olson at the Chamber and Sean Kershaw of the Citizens League and institutional leaders far too numerous to cite. It stems from the focused commitment of engaged business leaders and an active philanthropic community—including the Bush Foundation and the Minneapolis Foundation, to name just two among the dozens of organizations in the state that actively support college access and success.

In short, Minnesota’s good record stems from the many committed coalitions that you’ve built here—coalitions that include representatives from business, from the field of philanthropy, from the policy arena, and from all stages of the education pipeline. There’s the P-20 Partnership … the Itasca Project … the Twin Cities Strive Initiative … the listening tour project involving the Chamber, the Minnesota State Colleges and Universities system and the state’s Department of Employment and Economic Development.

I mention all of these specific things because we know that there’s a lot of good educational energy in Minnesota. That energy is reflected in your presence here today, and it has fueled a lot of progress in this state.

But here’s the challenge: Despite all of the excellent work you’ve done, the fact is, it isn’t nearly enough. The barriers you face are significant, and the stakes are far too high for you to rest on your laurels. Even given its record relative to other states, Minnesota is still nowhere near where it needs to be to ensure prosperity and security for its residents in the coming decades.

In fact, make no mistake: complacency is a serious danger.

Why? Well, let’s look at the facts. At its current pace, Minnesota will reach a two-year degree-attainment rate of 55 percent by 2025. Yes, that’s well above the 46.5 percent rate that’s expected nationally if we project current trends out in a linear fashion, but it’s still below the Goal 2025 national target of 60 percent. More to the point, it’s far less than what economists and labor experts say will be necessary to build a truly skilled workforce here in Minnesota.

Higher Education Partnerships for Prosperity, the Itasca Project report released in June, states the challenge clearly. By 2018, it says, 70 percent of Minnesota jobs will require postsecondary education. So, how can you accelerate your progress … especially given the reality that it is unlikely that there will be extra money to fuel that acceleration? Through the decade that ended in 2010, state higher-education funding was cut 35 percent here in Minnesota; given economic and political realities, there’s little chance that this funding will be restored to its former levels, even under optimistic scenarios.

My colleagues and I are mindful of the importance of focusing on attainment gaps, or what we are referring to simply as the equity imperative. From my review of the data, it seems to me that the need to focus on equity should resonate with you as well. Census data show that nearly 48 percent of white, working-age Minnesotans have at least a two-year degree. Among African Americans, the rate is far lower, just 31 percent; and among similarly aged Latinos, it’s lower still: only 19 percent. Similarly, figures from the Minneapolis Foundation tell a disturbing tale of inequity at the high school level. They show that Minnesota has a 45 percent disparity in graduation rates between white and black students—the worst such gap in the country. It seems there is a tremendous opportunity to build on your successes and make Minnesota the skilled workforce state. There are equity gaps that must be closed … standards that must be aligned and altered … opportunities that must be expanded … costs that must be controlled … productivity gains that must be realized.

In short, if we want to close the skills gap and meet the global economy’s growing need for talent, Minnesota—indeed, the entire nation—must have a preeminent higher-ed system. But that system isn’t likely to continue to look like the one that we currently have. Instead, it will be a redesigned system, one that is flexible, affordable, and quality-focused to properly serve the needs of students, employers, and the state’s civic and social well-being.

At Lumina, we’ve thought a lot recently about this redesigned system. We’ve had to … because it is becoming increasingly clear that the current system just can’t get us where we need to be as a nation.

It’s not just a capacity issue. Even if it were possible simply to “super-size” the current system, we’d still fall short of Goal 2025. That’s because the problem isn’t just about scale. It’s about structure. The fact is, higher education needs to operate in new ways. It needs to be redesigned so that it better meets the needs of today’s students and positions the nation for success in our 21st century global society.

This redesigned system must deliver high-quality education to the growing numbers of low-income, first-generation, minority and adult students who represent our future as a nation. And it must do so with a specific eye toward what the state needs to thrive economically and socially. In other words, higher education must be retooled so that it is both more affordable and more productive. It must become a truly student-centered system—one that ensures access to all types of students, gives those students the support they need to succeed, and enables them to earn credentials that demonstrate real and relevant learning.

More and more of our work at Lumina is aimed at building this student-centered system. It’s not a task that can be accomplished quickly, and it certainly can’t be accomplished by any one organization.

So what should that new student-centered system look like? While there are many dimensions that will need to be tackled, for the purposes of my remarks let me zero in on two key issues: how that system is financed, and how we award credentials for those who successfully meet the academic requirements.

Stated plainly, the current student financing model is broken. Affordability of higher education has become a major issue of debate nationally in the last year or so, and for good reason. Our tuition and student aid systems were designed decades ago to meet student needs and social and economic conditions that are dramatically different from those we face today. The fact is, fewer than 1 in 5 of today’s college freshmen graduated from high school in the prior year and immediately enrolled in a residential four-year institution. So the 18-year-old who attends full-time and lives on campus is something of an anomaly today. And yet, a student financing system designed largely to serve that student remains largely in place.

Clearly, it’s well past time to fundamentally rethink our national approach to student finance. We need a system in which resources are used to support the success of a much larger—and infinitely more diverse—population of students.

Building this newly designed student financing system can’t happen overnight, of course, but there are several criteria that we already know it should meet. Here are just a few of the lengthy list of criteria that should be met:

  • Grants, loans, and tax credits, particularly at the federal level, should be incorporated into a common system to meet a clear objective: supporting the success of low-income students.
  • The system, especially state financial aid, should feature strong incentives for students to complete programs—and to do so as rapidly as possible.
  • The new system should incorporate innovative approaches to benefits management. The idea here is to assure that funds from sources other than financial aid—including income support like unemployment insurance and workforce development funds—are leveraged to support college attainment.
  • The new system should employ more efficient and more user-friendly eligibility and application processes at all levels.

In addition to redesigning student finance, the second step in building a more student-centered higher education system is the creation of a new system of credentials.

Right now, we’re operating under a system of credentials that is still far too closed and rigid to meet our needs. There are exceptions, but for the most part it is still a system that awards credit not for actual learning, but for time spent in classrooms or labs. It’s a system in which the recognized levels of achievement—associate, bachelor’s, master’s and doctorate—are too few, too widely spaced and too loosely connected. It’s a system that too seldom credits students for what they have learned on the job or in life. It’s a system in which students—first-generation students in particular—often can’t understand the pathways to degrees and other credentials. In short, it’s a system based mainly on time spent in classrooms and on campuses—not on learning and acquiring skills from a wide variety of education experiences … skills that are genuinely valued in the workplace and can be linked to future opportunities.

We need a new system of credentials to assure that high-quality learning is recognized and rewarded—no matter where or how that learning is obtained. What this will require is an alignment of the postsecondary education and workforce development systems in new and stronger ways, using the new system of credentials as the mechanism for achieving this alignment.

In truth, the shift to a learning-based, flexible, stackable credentialing system has been little more than an intriguing idea for a long time. But it is now an idea whose time has come. In fact, the task of defining and improving learning outcomes has risen to the top of policy agendas in several states … largely because of its clear connection to workforce needs. That connection puts many of you in position to be real influencers and leaders—vital catalysts in the effort to redesign higher education.

And there’s another thing that qualifies you as credible catalysts, one I’ve already talked about at some length this afternoon: You live in Minnesota. This state has an enviable record of achievement—in college attainment and in business—and that your dual record of success puts you in a unique position of leadership.

While there are areas for growth in your work on college attainment, it remains true that Minnesota is an example for other states to follow. Likewise, many other states no doubt envy your corporate accomplishments. After all, 19 of the nation’s Fortune 500 companies have their headquarters in Minnesota.

The point of all of this is that, in many ways, the nation is looking to you for direction and for inspiration. You’ve already demonstrated your flair for innovation; you’ve already modeled a culture of collaboration; you’ve already laid the groundwork. Now is the time to aggressively build on that foundation.

The basic blueprint that the Chamber has developed—what’s titled a “Business Plan for Postsecondary Education and Workforce Development”—represents a great start for that building project. It makes specific recommendations that focus on improving college readiness, delivering value by improving college affordability and productivity, and collaborating and innovating.

These recommendations—and the Chamber’s overall effort—are absolutely on target … right in line with Lumina’s work and aimed squarely at increasing college attainment here in Minnesota.

The challenge of producing a better skilled workforce is important, and it’s urgent. Addressing that challenge will require all of the key players to work more closely together than they ever have before. It will mean redoubling efforts to improve degree completion at all levels. And it will mean dramatically improving the system of providing incumbent workers and those who have been knocked out of the labor market with meaningful postsecondary credentials. If we simply coast along and pursue business as usual, this state will face critical shortages in high-demand and economically-critical areas, leaving far too many workers underemployed or not working at all.

If you—as business and community leaders, as policymakers, as educators, as leaders in the field of philanthropy—if you can make the college-success effort your shared and central mission … if you can fully embrace Goal 2025, just think what that could mean. Without a doubt, it would help you earn that title as “the skilled workforce state.” What’s more, it could help put the nation on a path to sustained global leadership in talent development.

I urge you to embrace that challenge. And as you do, you can be sure that my Lumina colleagues and I will be proud to be your partners in this vital work.

Thank you.

Tracy Chen

A series of reports show investing in employee tuition reimbursement yields significant financial payback.
See Talent Investment series