News & Views

Back To News & Views

The Future of Public Higher Education: Why States Should Care

Jamie P. Merisotis, President & CEO, Lumina Foundation
NCSL’s Annual Legislative Institute on Higher Education, Denver, CO

Thank you, and good evening everyone. I’m very pleased to be with you. I want to thank Julie Bell and her colleagues at NCSL for organizing this year’s institute, and for inviting me to join you here in Denver. It’s wonderful to have an opportunity to speak in this relatively intimate setting with a group whose actions and views are so important to my organization’s mission—and really, to the future of the nation. I especially look forward to your questions and comments, which I’m sure will prompt a lively and productive dialogue. And so, I’ll do my best to keep my remarks fairly brief.

First, a little more background on me, and Lumina. I spent more than two decades working on state and federal education policy, most of it higher education policy. I also happen to be a first generation college graduate, so I’ve personally benefitted a great deal from both state and federal policies, including state scholarships, Pell Grants, and loans.

Now as many of you know, Lumina Foundation’s work has some relationship to the experience I’ve had, and that millions of other Americans have been fortunate to have. All of our work is focused on college access and success, specifically aimed at assuring that by the year 2025, 60 percent of Americans hold high-quality college degrees, certificates or other credentials. As one of the nation’s largest private foundations—and certainly the largest with this specific focus—we have a responsibility to use all of the tools we have at our disposal to fulfill our mission and help the nation achieve that goal. In short, all of our work, from grant making to public policy to convening, is focused on system-level change that leads to measurable increases in college attainment.

Of course, we’re not alone in the quest to dramatically increase college attainment. In fact, at least 35 states now have specific, challenging goals for higher education attainment. Many of your state goals are at the same 60% level as Lumina’s, and in one or two cases, they’re even higher.

'College' means all forms of post-high school or postsecondary education, not just four-year degrees

By now, the case for increased college attainment—and by “college” I am referring to all forms of post-high school or postsecondary education, not just four-year degrees—is well-documented. The simple fact is, two-thirds of all of the nation’s jobs will require some form of postsecondary education by the end of the decade.

Nearly four out of every five jobs destroyed by the recession were held by workers with a high school diploma or less

Without question, it pays to have a college credential. A report released just yesterday shows that undereducated workers are increasingly being left behind and that we need to do a lot more to produce the skilled talent our nation needs to compete more effectively in the global economy. Nearly four out of every five jobs destroyed by the recent recession were held by workers with a high school diploma or less—and those workers have continued to lose jobs during the slow recovery.

By comparison, those with a Bachelor’s degree or better gained more than 180,000 jobs during the recession. And since the recovery began in January 2010, workers with some college or an associate degree gained 1.6 million jobs, and those with a bachelor’s degree or higher gained another 2 million jobs. During that same period, people with a high school degree or less lost another 230,000 jobs.

College-educated workers also have benefited from unemployment rates that have stayed low relative to those with only a high school diploma or less. Unemployment rates for new four-year college graduates peaked at 11.1 percent in July 2011 before declining to 6.8 percent in May 2012. Meanwhile, unemployment rates for new high school graduates peaked at 30 percent in January 2012 and were still at 24 percent in May of this year.

Americans with college degrees also earn considerably more money over their lifetimes than those who lack college credentials. What’s more, this wage differential is actually growing.

All of these facts 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. In coming years, economists predict that more jobs—and increasingly better jobs—will go to workers who have the advanced technical skills and the generalizable skills that higher-level learning provides … the critical thinking and analytical skills that make workers more adaptable.

And here’s another important point: Increasing the level of college attainment isn’t just about filling existing jobs—or even about preparing people for those emerging knowledge-based jobs. More and more research is showing that increased college attainment is actually an important factor, not just in workforce preparation, but in job creation. Our ability to “upskill” workers to meet employers’ changing demands is, in itself, a driver of economic growth. Highly skilled workers—the kind that are produced in high-quality postsecondary programs—are able to adapt and progress right along with changes in their chosen fields, and this adaptability actually fuels economic growth. In short, talent is the key, and higher education is where that talent is shaped.

No one who examines these facts and trends can seriously doubt the growing value of a postsecondary credential.

No one who examines these facts and trends can seriously doubt the growing value of a postsecondary credential. And I say that despite the fanciful arguments of so-called experts who continue to question whether college is worth its cost. Clearly, rising costs are a huge concern … one that must be addressed by all of the stakeholders in American higher education. But it is folly to let that concern overshadow the enormous, lasting benefits that flow from increased college attainment. Doing so is an act of pure denial—one that sends the wrong message to the very populations whose attainment levels we must increase most: that is, the growing numbers of low-income students, first-generation students, working adults and students of color.

Without question, postsecondary success is key to their future as individuals … and their success is key to our future as a nation. At its core, that’s what the drive to reach that 60 percent attainment goal is all about: forging a brighter future. And all of you can have a direct and powerful impact on that effort because, as the title of my talk indicates, you are in position to shape “the future of public higher education” in your states.

But here’s one thing about forging a brighter future: You can’t do it if you’re still living in the past. And, unfortunately, for some who are in positions of influence over higher education, nostalgia remains a much-too-powerful force. Rather than looking forward at what the postsecondary system needs to be to serve today’s students and tomorrow’s society, some reflexively look back to what college was. They make decisions in large part not in response to new realities and emerging trends, but on their own decades-old recollections of campus life.

The fact is, college just isn’t what it used to be. Oh, the campus may look the same—and even some of the people who teach and lead the institutions may be the same in your state. But today’s colleges and universities are dramatically different from those of just a few decades ago. Technology and online learning … the influence of social media … collaborative, project-based learning … open-access courseware … portfolio-based assessments … all of these growing trends—and many more—were unheard-of just a few years ago.

And as much as our view of the college campus must change, it’s even more important that we develop an updated view of today’s college student. 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. Today’s students run the gamut in terms of age, race, ethnicity, culture and income level. We can’t properly serve them—or our states or the nation—if we’re governed by nostalgia. On the contrary, we need to build a higher education system that is specifically geared to serve these 21st century students—the ever-growing number of low-income, first-generation, minority and adult students who constitute the “real world” on campuses these days.

To your credit, you are all here for these three days to wrestle with the very issues that those who are more nostalgic might choose to avoid. You are embracing the challenge of increasing college productivity and boosting on-time completion rates. That in itself shows that you understand the need for a redesigned system … one that is better suited to the needs of today’s students and today’s workforce.

Focusing your energy on improving on-time completion is a logical and important step, and performance-based funding mechanisms are critical to that effort. Lumina has invested heavily in the development and implementation of these models in several of your states. But outcomes-based funding is really just one aspect of a more comprehensive redesign effort that must take place if we are to ensure 60 percent attainment of high-quality credentials by 2025. To reach that big goal, we need a student-centered system of higher education—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 the work of Lumina and its partners in this room is aimed at building this student-centered system. But it’s not a task that can be accomplished quickly, and it certainly can’t be accomplished by any one organization. If I may, I’d like to suggest two aspects of this new, student-centered system … two steps in which state policy can play a critical role. The first step is to develop new methods for financing higher education; the second is to forge a new credentialing system.

Stated plainly, the current student financing model is broken. Today’s 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. Remember, the 18-year-old freshman 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 of the past remains largely in place today.

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.

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. Despite the good work of many who have toiled to make assessment of learning an embedded element of the system, 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, and not on learning and skills acquiring from a wide variety of education experiences.

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. 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 … and that puts many of you in position to be a real catalyst for change in the states you serve.

You know, there’s never been a greater need for catalysts. None of the hard work necessary to build a student-centered system can succeed without bold and committed leadership at the state level. As state policymakers, you hold the power of the purse in state-funded higher education. And make no mistake, despite the growing number of new providers, state-supported higher education must carry the load as we work to prepare our citizens for the future. After all, enrollment figures from Fall 2010 show that, of the nation’s 18 million undergraduates, 76 percent—some 13.7 million students—were enrolled at public institutions. The potential represented by those 13.7 million lives is a precious and immensely valuable resource … but it’s a resource that can’t be fully developed without proper investment. As policymakers, it’s up to you to do all you can to make that investment, even—perhaps especially—in these challenging economic times.

Clearly, the pressure on state budgets is enormous, and the list of funding priorities in every state is long. Many of you face precarious and constantly changing revenue scenarios, and are being asked to make decisions annually or biennially that often need to be revisited and modified. It’s clearly not an easy environment for state policymakers, and we fully appreciate the dynamic challenges of your work.

Still, as legislative leaders, you have the opportunity—some might say, as we do about our work at Lumina, the responsibility—to make decisions that can improve the lives of your constituents for decades to come. Certainly, deeper and deeper cuts in higher-ed funding can’t be considered a good strategy for long-term success. A renewed commitment to higher education success is vital to job creation and economic development in your state … and key to the individual prosperity and security of the people you represent.

Of course, this renewed commitment doesn’t mean you simply throw money at the problem and hope for the best. Quite the opposite: States and citizens can’t—and shouldn’t—be expected to support a non-productive enterprise, no matter how great its potential or how storied its past. Rather, what you must do as policymakers is to champion that newly designed system I’ve been talking about … an effective and productive higher education system that is truly centered on the needs of students and society. This institute has been designed to offer you a number of practical, actionable ways to help build such a system. These “shovel-ready” ideas about productivity, incentivizing completion, outcomes-based funding, and other topics are derived from some of the work we have been fortunate to support. I urge you to embrace the task and to take full advantage of the expertise and the enthusiasm of those who will be working with you over the next two days.

Before I step aside and perhaps take a few questions, I’d like to leave you with two thoughts … two pieces of advice that I hope you’ll take home to the states you serve so well. The thoughts should be easy to remember, because they both refer to one thing: taking a new perspective. What I’m suggesting is that you can best serve your state and its people by looking at your role in public higher education in two ways that might be a bit new to you.

First, I’d advise you to begin with the big picture of systemic improvement in higher education, not so much on the separate pieces of the legislative process. It’s easy for the piecemeal aspects of policymaking to take over … for details of the “how” and “when” to obscure the “why” … for quantifiable results to trump reasons. Yes, action is urgently needed to make public higher education more productive and to increase completion rates, but that action must be thoughtful and coordinated if it is to be effective and enduring.

Focusing on the big picture means two things: First, publicly set an actual college-completion goal for your state, or commit to one that has already been set. Second: Work to implement a series of interconnected steps to reach that goal. You’re already taking, or at least talking about, many of these steps: aligning college and career readiness standards … restructuring financial aid policies … implementing performance-funding measures, and so on. But it’s important that you see all of these steps as part of a larger, integrated whole. Remember, the idea is for all of the discrete changes to add up to systemic change, because that’s what’s really needed.

The second new perspective I’d ask you to develop is perhaps even more important. It’s the student perspective. I’ve talked about the need for a student-centered system. Well, what does that really mean to you as a policymaker or legislative staffer? In simplest terms, it means shifting your frame of reference. I’m not suggesting that institutions will or somehow should disappear in terms of their importance or influence. But the fact is, your first responsibility—and theirs—is to the students, and to the improved society we’re asking those students to build in coming decades.

As policy leaders, the decisions you make regarding postsecondary education will shape the future of your state and its people. Those decisions, and the discussions that inform those decisions, must be driven, not by existing relationships with institutions or their leaders, but by economic and social responsibilities to put students at the very center.

Tradition alone won’t prepare those students for tomorrow. They need you to lead us to tomorrow—one where all deserving students gain access to higher education, where all are supported until they reach their goals, and where all get an education that is rigorous, relevant in the modern economy, and ultimately rewarding to all of us, as communities, and as a nation.

Thank you very much.

Kate Snedeker

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