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Hard Choices on the Road to 2020


Diana Jean Schemo


Like many a higher education advocate around the country, David A. Longanecker, president of the Western Interstate Commission for Higher Education, was thrilled upon hearing President Barack Obama’s summons to restore America’s position as the world leader in the share of its citizens with college or university degrees.

The call, made in the president’s debut speech before a joint session of Congress, heartened Longanecker in the specificity of its goal: By 2020, Obama intoned, America “will once again have the highest proportion of college graduates in the world.” It reminded him, Longanecker said, of President Dwight Eisenhower’s call to raise the standing of American students in math and science after the Soviets launched Sputnik in 1957, and of President Lyndon Johnson’s vision for a Great Society, which created the Higher Education Act, less than a decade later.

“It had been a long time since a president had said we need to really ramp up the share of our population with a college degree,” Longanecker said, adding that he was “very positively impressed” that Obama showcased the goal so early in his presidency.

But in contrast to those earlier national quests, which rolled forward with groundbreaking federal legislation and financial support to match, the president’s more recent call comes in a time of recession. It involves no overarching changes of law on the magnitude of the Higher Education Act, though the administration did substantially raise the money available for Pell Grants by $36 billion, and funneled billions of dollars to states in temporary stimulus money to protect higher education funding through this June.
Nevertheless, the president’s ambitious goals for higher education will neither fly nor fall based on actions taken in Washington. Far more decisive will be the response of state lawmakers to the challenge, and whether state legislatures across the nation choose—and can manage—to raise support for public colleges and universities while cutting government services wherever else possible.

So far, the picture is not promising. According to research by the National Center for Higher Education Management Systems, the nation would have to graduate an additional 8.2 million students to meet the Obama administration’s goal, producing a population in which 55 percent of adults would hold an associate or bachelor’s degree. Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce, estimates the cost of raising graduation numbers by that order at $158 billion. Given the increase in federal Pell Grants, Carnevale calculates the state share needed to reach the president’s “big goal” at an additional $122 billion—or $8 billion a year.

“The feds have put their money on the goal, $36 billion in Pell Grants, but it’s not clear where the state share is coming from,” Carnevale said. “We’re going to see whether they come up with it. I think the answer is pretty clear, and the answer is no.”
Precipitous Declines
In recent years, state colleges and universities have seen their budgets whipsawed, according to figures provided by the University of Illinois Grapevine web site and the Association of State Higher Education Executive Officers (SHEEO). Paul E. Lingenfelter, president of the association, said that in healthier economic periods, state support for higher education appeared strong, but was particularly sensitive to recessions.
His organization has reported that around the country, state and local funding for higher education, as measured in per-student appropriations, declined steeply in the decade’s first recession, from 2002 to 2005, then climbed as the economy improved between 2006 and 2008. But in many states, the second recession obliterated much of the gain, even as it led more students to clamor for higher education, swelling enrollment of full-time–equivalent students nationally by nearly 9 percent from 2004 to 2009.

Federal stimulus money gave many higher education systems a reprieve; the $2.3 billion provided to states in 2009, for example, essentially kept public funding for state colleges and universities flat at about $88 billion, according to SHEEO.
But the national picture camouflages the degree of upheaval within a number of states, and wild variations in trends. In New Jersey, Rhode Island, and South Dakota, higher education appropriations per student in 2009 fell from the already-low 2004 appropriation level by anywhere from 19 percent to 29 percent. In nine states—New York, Nebraska, Tennessee, Colorado, Alaska, Hawaii, Oklahoma, Alabama, and Wyoming—appropriations climbed by between 19 and 32 percent during the same period. The national average showed 4 percent growth.
By another measure, states have been steadily cutting their investment in higher education over the last 30 years, said Tom Mortenson, policy analyst and publisher of the Postsecondary Education Opportunity newsletter. Mortenson calculates state commitment as the proportion of a state’s overall tax base that goes to higher education. On that measure, he said, state support is down by an average of 40 percent over the last 30 years.
Regardless of the gauge, however, the cushion of federal stimulus money disappears this June. And few state higher education officials are expecting state or local taxpayers to make up the difference.
“States are facing this huge cliff in funding,” said Longanecker, whose members represent public higher education institutions in 15 states, from Alaska to New Mexico. Among them, overall funding has not declined in the last few years, Longanecker said, largely because funding fell “so radically in the prior recession. Some of the states,” he added, “are looking at cuts of 30 to 50 percent as reasonable possibilities” for next year.
Mortenson was more categorical. “The idea of social investment in the population to build a prosperous future is something the country gave up on 30 years ago,” he said, noting that in a half dozen or so states, fiscal support for higher education is the weakest it has ever been on his measure. “Can we achieve Obama’s goal? Not a chance in hell. Unequivocally, it will not happen, not unless states come to their senses and reverse what they’ve been doing over the last 30 years.”
Simple Math, Difficult Decisions
Others, however, believe that the distance from here to there is bridgeable, through a combination of modest efforts on the part of state appropriators and more substantial changes from the institutions seeking their support. SHEEO estimates that a 10 percentage-point increase in graduation rates, gleaned in part by raising graduation rates among both traditional students and the 17.2 million adults aged 25 to 44 who left college without a diploma, would bring the president’s big goal within reach— by 2025.
To get the necessary support in today’s environment— in which lawmakers raise taxes to pay for public services at their peril—will not be easy. “Frankly, higher ed is going to have to step up and figure out how they can [achieve] a lot of additional enrollment at lower cost per student,” said Scott Pattison, executive director of the National Association of State Budget Officers. “There’s just no other way to do it. To me it’s just simple math, basic arithmetic. If you want to significantly increase enrollment, you’ve got to figure out how to do it at a much lower cost per student.”
Jane Wellman, executive director of the Delta Project on Postsecondary Education Costs, said the “glide path” in higher education is toward shrinking state resources, falling institutional budgets that strike most directly at the quality of instruction, and rising tuition that risks shutting out those least able to afford college. A post-inaugural announcement by California’s new governor, Jerry Brown, that he would seek $1.4 billion in cuts to higher education to ease California’s $25.4 billion deficit for the 2011–12 fiscal year, was enough to throw the president’s goal into jeopardy. The heads of California’s higher education institutions said they would likely be forced to cut enrollment. Jack Scott, chancellor of the state’s community colleges, calculated 350,000 students would be turned away next year.
“I don’t think we can make the goal without turning around this pattern of disinvestment in state funds,” said Wellman. “However, there’s no question that cost reduction, efficiency, and effectiveness has to be the order of the day.”
In particular, reformers like Wellman say states must do a better job of aligning instruction in elementary and secondary grades to the knowledge and skills needed to succeed in college. They point to efficiencies to reduce “leakage,” the loss of students who enroll but never earn a diploma. At community colleges, for example, only one student in five graduates within three years. Easier transfer policies would allow more students to move smoothly from community colleges to four-year institutions, earning credit for courses taken and reducing duplication. In Oregon, for example, this change raised the share of transfer students admitted to the state’s bachelor degree programs by 18 percent between 2009 and 2010—to 5,710 students from 4,823, according to state figures.
The Pressure to Produce
Some suggest that a premium on productivity be incorporated into state funding formulas, in much the same way that public schools are increasingly tying teacher salaries to student success. Without that, warns DeWayne Matthews, vice president for policy and strategy at Lumina Foundation for Education, universities will be tempted to cut enrollment as a response to lowered budgets.
“Not serving students should count against an institution,” said Matthews. “We have to look in the mirror and make some very difficult decisions about what we can support and what we’re no longer willing to support.”

But the pressure to produce, Carnevale worries, may come at the expense of equity. “The states are demanding faster, higher graduation rates at lower cost, and there’s only one way to do that, and it’s by not serving students who can’t pay full cost, or students who don’t have the academic preparation to do the work,” he said. Carnevale foresees public colleges and universities becoming instruments that block, rather than promote, social mobility: increasing tuition beyond inflation, recruiting out-of-state students for the higher revenue they bring, channeling middle- and low-income state residents to second- and third-tier colleges and universities, or leaving them with no higher education option at all.

“The bottom,” Carnevale predicted, “will fall out for the people at the bottom.”

​Diana Jean Schemo, a former national education correspondent for the New York Times, is author of Skies to Conquer: A Year Inside the Air Force Academy.