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A Banner Year for Higher Education?

1/31/2013

Robert L. Caret

 

With the arrival of a new Congress and the nation gradually emerging from the recession, Washington has the opportunity to think creatively about how to shape public higher education going forward to help grow the middle class and keep America competitive in the global economy. This opportunity is one we cannot afford to miss. 

A study by the Georgetown Public Policy Institute showed that recent college graduates fared much better in the recession than those without bachelor’s degrees. To paraphrase former President Bill Clinton, not every job in the twenty-first century will require a four-year college degree, but most jobs will be created by a person who has one.

The good news is that both Republicans and Democrats have pledged efforts to return the United States to a more competitive position in college completion and both say they want to halt the spiraling rate of student debt. Addressing these twin challenges will require a stronger partnership between the federal government and public universities.

For decades, public universities have been hemorrhaging from the loss of state funding. Ten years ago, my state, the Commonwealth of Massachusetts, provided 61 percent of the funding for general education programs at the University of Massachusetts and families provided 39 percent. Now the figure is upside down. Tom Mortensen, a senior scholar at the Pell Institute for the Study of Opportunity in Higher Education in Washington, predicted in 2011 that if the state continues to reduce its share of higher education costs at the rate it has over the last two decades, Massachusetts will simply cease to contribute taxpayer dollars to higher education by the year 2035.

It’s not that Massachusetts, with its abundance of private colleges and universities, is different from any other state or that it is intent on starving public higher education. We see the same outcome across the country. Rather, on the long list of priorities for state governments, public universities do not fare as well because they have a revenue stream in the form of tuition and fees.

At the University of Massachusetts, we have aggressively pursued efficiency initiatives to reduce operating costs and to reign in tuition and fees. We’ve stepped up efforts to inform incoming and existing students of their financial options. We’re also spending record amounts on financial aid—$736 million from all sources, including $158 million in institutional grants last year. We are one of 10 universities nationwide piloting the federal government’s commitment to transparency in education costs and financial aid information by putting out a shopping sheet that will help students and their families get a better grasp on their financial commitment to a college education.

Today we are graduating higher-quality students with 22 percent fewer dollars spent on educating them, adjusted for inflation, than we were in 1999.

But we cannot cut our way to prosperity. The economic fundamentals must change. Otherwise, in an increasingly diverse nation such as ours, minority and low- and moderate-income students, along with all of the new immigrants to higher education—who for generations have counted on public higher education to provide them with a path to a better future—will suffer, as will a nation bereft of their contributions.

So now is an auspicious time for Washington to ask the big questions about public higher education:

  • Could a revised Morrill Act, as Kevin Carey of the New America Foundation recently argued, help restore the future of public higher education? Carey makes the point that the Morrill Act worked in the mid-nineteenth century because it made substantial federal resources available under clearly defined conditions. Rather than provide “blank-check’’ funding to public universities, the federal government could provide targeted funds for similar creative approaches aimed at areas of national need.

  • Should a competition similar to Race to the Top be implemented for public universities? In January of 2012, President Barack Obama proposed such a program for higher education, similar to the policy he implemented for K–12 education. The plan, which would allow states to compete for $1 billion in federal grants, has stalled in Congress.

  • Should higher education consider borrowing models from health policy, like Medicaid, which provides both state and federal funding to provide health care to low-income populations?

  • Should policymakers use more investigative muscle to explore the drivers of increased costs and student loan debt as Senator Tom Harkin did in completing a two-year study of the nation’s for-profit colleges? Could a creative use of those drivers lead to greater success and shorter times to graduation?

  • Should Washington expand its income contingent student loan payment system? Or, perhaps institute an expanded forgivable loan program in areas of critical workforce need?

As Congress returns, my hope is that it will ratchet up its to-do list. Among the first orders of business should be to stave off cuts to the Pell Grant program. Just in the last two years, Congress has eliminated both the year-round Pell Grants and excluded Ability to Benefit students—those without a high school diploma or equivalent who could previously prove their “ability to benefit’’ from college and qualify for student aid by either passing a federally approved test or completing six credit hours—from Pell Grants and student loans. Another deadline for Pell Grant financing looms in 2013 when significant mandatory funding disappears, which may propel consideration of additional changes to eligibility in federal student financial assistance programs—to say nothing about what changes might result from overall budget and deficit discussions in Congress. Where the maximum Pell Grant once covered the entire cost of obtaining a two-year degree and 77 percent of the cost at a public university in 1980, it now covers only 62 percent of the cost of a two-year degree and 36 percent of a public four-year degree.

Last year, Congress voted to extend the 3.4 percent interest rate on federally subsidized student loans for another year, rather than doubling it. Now it must act to keep that rate from expiring.

Washington must also not retreat on federal funding for university research, which accounted for 66 percent of all UMass research spending in fiscal year 2011. Research support from federal agencies such as the National Institutes of Health, the Department of Defense, the National Science Foundation, the Department of Energy’s Office of Science, and the National Aeronautics and Space Administration converge on our state, catalyzing discovery and entrepreneurship. The federal dollars we receive have a return far beyond their initial investment, acting as a significant magnet for private sector dollars that spur job creation in Massachusetts and beyond.

At UMass, we are braced for the possibility that our growth will begin to slow as stimulus funds are phased out. But cuts would stall or derail research efforts currently underway at a time when corporate labs are scaling back on research and development and making overtures to us to partner with them on life-changing research projects.

With declining revenue forcing states to abandon adequate funding for public universities, it is in the best interest of the nation for the federal government to do more.

Public research universities like the University of Massachusetts are economic engines—producing the innovation, creating the jobs, and developing the workforce talent that supports the state’s tax base. We also help in numerous ways to elevate our communities through efforts aimed at social well-being.

More than 80 percent of our undergraduates come from the Commonwealth of Massachusetts, 80 percent remain in the state a year or two after graduating, and 65 percent stay far longer. It is hard to imagine what kind of place our state would be without the contributions the university makes.

Sadly, this disinvestment in public higher education is occurring at a time when the demographics of our university are changing, like those of the nation as a whole. In 2003–04, undergraduate students of color at the University of Massachusetts made up 21 percent of students; by 2010–11, the figure had climbed to 28 percent.

A nation that enabled returning World War II veterans to attend college on the GI Bill, and that affirmed the critical relationship between the prosperity of the republic and public higher education 150 years ago with the historic land-grant Morrill Act, cannot afford to walk back its commitment to its citizens or force upon students the false choice between taking on staggering amounts of debt or not going to college at all. We have a shared responsibility to find the proper balance.

So let’s hope this will be a banner year for public higher education: a year in which Washington embraces the notion that public universities are the key to growing the middle class and keeping America strong and prosperous. 

 

Robert L. Caret is the president of the University of Massachusetts system.