Category Archives: Economy

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Reversing the Victory of Elitism over Meritocracy

A recent trio of announcements relating to higher education emerged separately but deserve to be linked. By connecting these breaking news stories, we can see just how insidiously the quest for “excellence” has eclipsed every other competing social value, even in the world of higher education.

First are the annual reports of high-achieving students being crushed by learning that they were not offered admission to the elite colleges they had chosen — and that represented the essential next step toward the successful lives they had imagined for themselves. (This year’s letters to the editor from distraught students and parents were in The New York Times on April 22.) Failures at the age of 18! And all because they were going to have to settle for a college that was not at the very top of their lists!

Yet all these students had done is what they had been conditioned to do, almost from birth: work very hard earning good grades and accumulating extracurricular activities in order to join the growing competition for the relatively few seats available at elite schools, all in the name of “excellence.” Nothing less than “excellence” would suffice. The fact that the large majority of these high school seniors would be rejected or “wait-listed” — and based on the tiny number of students who are ultimately accepted off the wait list, “wait listed” seems best defined as “being placed in limbo and ignored for several months before being rejected” — thereby leading to senior angst on a massive scale, is just the price one pays in striving for “excellence.” (In other societies, this whole business might qualify as child abuse.)

Second, Amherst College, in the midst of a $650-million capital campaign, announced on its website that it had recently received a single anonymous gift of $100 million.

Third, in news widely covered by the media, Mount Ida College of Newton, Mass., founded in 1899, said that it will be closing its doors at the end of this academic year, forcing its 1,300 undergraduates (plus prospective freshmen) to find other institutions where they might start or complete their post-secondary education.

Consider the relationship of these three stories.

The elite institutions are not increasing the number of seats they have available for new students, yet they are under increasing pressure to admit more students who are high-achieving, but low-income — even as they are seeing growth in the numbers of highly qualified and relatively affluent applicants. The result is a continuing decline in their acceptance rates, thereby breaking the hearts of even more high school seniors. (The acceptance rate of applicants at top liberal arts colleges is generally now around 15 percent; it is in the single digits at elite national universities such as Harvard, Yale and Stanford.)

Amherst College has fewer than 1,900 students. Now that it is $100 million richer, the college says it will construct a building and hire more faculty, but it has announced no plans to add students. Amherst students may have a marginally better educational experience because of this gift, but there won’t be any increase in the size of the Amherst student body. The number of students applying to Amherst will probably increase, but the freshman class will still have fewer than 500 students. Accordingly, the gift will actually reduce, rather than enhance, the likelihood of any given applicant being offered admission to Amherst.

And that’s regrettable, because for the past 15 years Amherst has been ranked by U.S. News & World Report as the second-best liberal arts college in the nation, just behind Williams College. Ah, but in the early years of this century, Amherst was ranked first, ahead of Williams. What would it take for Amherst to reassume its top position?

As it happens, the Williams endowment is about $200 million larger than that of Amherst. (That both colleges boast endowments of well over $2 billion — or more than $1 million of endowment per student — evidently is not yet sufficient.) Would a larger endowment put Amherst back on top? A successful capital campaign for $650 million may answer the question.

But does anyone other than the students and alumni of Amherst or Williams care which of them is number one and which number two? Moreover, the cost of burnishing Amherst’s already lustrous reputation may come at the expense of prospective college students elsewhere. Mount Ida went out of business because it could not attract a sufficient number of students who could afford to pay its tuition, despite deep discounts. That same $100 million would have kept Mount Ida in business by allowing them to increase financial aid for needy students. Instead, we have a closed college, and 1,300 students (many of whom are low-income) being forced to look elsewhere. The $100 million gift may provide a marginal benefit to Amherst, but it is not a gift that provides any benefit to American higher education in general.

I’m not suggesting that Amherst and Mount Ida were in competition for the gift; it’s almost surely the case that the anonymous donor at Amherst has a connection to that college and no connection to Mount Ida. Yet although current federal tax policy places a modest surcharge on endowment earnings for a relative handful of extremely wealthy colleges and universities, it is still the case that the gifts themselves are not taxed, a policy that encourages wealthy individuals to enhance still further the endowments of already exceptionally rich colleges and universities. And there is no end in sight. The growing inequality we see in the wealth and income of individuals and families is mirrored in the world of higher education. The “1 percent” syndrome also exists in higher education, and the chasm in wealth between the elite campuses and all others continues to widen.

This is a situation that does not bode well for our country. The students at these elite universities are disproportionately from families in the top 10 percent of wealth and income. Although Amherst meets the financial needs of its students, almost half of them have no demonstrated financial need and are paying the full list price, which for the current year is almost $70,000 annually (including room and board) — a figure well beyond the reach of the great majority of American families.

Why, with an endowment of over $2 billion, is Amherst’s list price so high? Two reasons: first, its competitors charge about the same amount. A significantly lower price might suggest a “product” of lesser quality. Second, a high list price discourages most people from applying in the first place, suggesting that the colleges think that families at the very top of income and wealth prefer to be with people of similar means. Four years at Amherst costs more than the initiation fee to join Mar-a-Lago; the mere fact that a person is present says a good deal about his or her wealth and power.

Too harsh? Take a look at the Williams College view book that is sent to prospective students, an oversized brochure that gets right to the point. On the second page, in capital letters and a huge font, it reads:

“EXPERIENCE

THE BENEFITS

OF A

$2.5 BILLION

ENDOWMENT”

And in case your eyes slid too quickly over the words, “$2.5 BILLION” is printed in gold.

The following page of the Williams’ brochure is focused on the specifics: high graduation rate, low student-faculty ratio, acceptance at famous graduate schools (all the examples are in the Ivy League) — and high starting salaries, high mid-career salaries and the Williams alumni network to get those well-paying jobs.

The quality of the education? The transformative consequences of four years at Williams? Personal development? Those don’t warrant the big type. But in small type, on the same page, Williams tells us: “With strength comes responsibility. That’s why we use our endowment to level the playing field.”

Which playing field would that be? Polo? The one named for a student’s grandfather? How can an elitist school claim to be leveling the playing field when its students are overwhelmingly from the top tier of family incomes?

Federal tax policy has not only permitted but encouraged the development of a set of colleges and universities that are the educational counterparts of exclusive country clubs, where the price of admission deters average people from even considering applying. By allowing wealthy donors to make tax-exempt gifts to the very schools to which their children and grandchildren will be applying, we have created a wealth-based aristocracy that is both self-perpetuating and largely closed to those who would aspire to climb the socioeconomic ladder. A young person of modest means will not have the advantages of a great K-12 education, summer enrichment programs, special tutors and the many opportunities that are commonplace for the children of privilege, and will instead have to hope to be among the tiny number of applicants selected by elite schools who are not of the social elite.

So what to do? In various ways, professional sports leagues have addressed the problem of having too much success repeatedly concentrated in the same handful of teams. To address the same problem, higher education might consider creating a semblance of parity among a larger number of schools than the miniscule few now occupying the top rung. Specifically, I suggest that we follow the lead of the National Football League, which strives for some level of team-performance parity by capping the size of the salary pool for players. The salary cap ensures that rich big market teams do not have a built-in advantage over teams in small markets that lack equal access to financial resources.

How can that idea be applied to higher education?

A first step might be to eliminate the tax deduction for donors on gifts made to any college or university that already has more than, say, $1 million of endowment per student. An endowment at that level would permit colleges to draw down $50,000 per student per year — a figure that should itself be sufficient to educate the student without a need for additional funding (although presumably the college would still be charging for tuition and fees).

I recognize that the situation is far more complicated at those universities with extensive graduate and professional programs, where dedicated endowment accounts are restricted in how they can be used and where expenses can be much higher. So, for purposes of starting a discussion, my recommendation is limited to undergraduate education and the endowment accounts that are used for that purpose.

But unless and until we begin to swing the pendulum away from inequity and back toward parity, America will continue to be beset by the looming educational problem of the day: a rigged system of higher education where those with wealth and power are hugely advantaged in gaining access to a high-quality college education relative to those who have neither. The corollaries of this problem are a decline in the average quality of a college education; costs rising faster than students and their families can afford; rapidly accumulating debt from college loans and rising default rates on those loans, especially from those who started college, but did not finish; and a widening gap in income and quality of life between the college educated and those who are not, with whites and Asians disproportionately represented in the first group and blacks and Latinos disproportionately represented in the second.

That is not the America I want for my grandchildren. Let’s change it.

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Can Higher Education Solve America’s Economic Crisis?

Part 8: Forging a New Social Contract

For the past several weeks, I have endeavored to provide a guided tour to the history of higher education in America, and its connection to the national economy. It has been a bumpy ride.

Expectations for higher education have waxed and waned over the years, as higher education policy and practices on the one hand, and economic aspirations and requirements on the other hand, have been thrown out of equilibrium because they were changing at very different rates. But there is no question that we are, today, at a moment of serious disequilibrium.

In Part 6 of this series of essays, I spoke to the issue of what needed to change in our higher education infrastructure. Part 7 focused on why these changes were needed. Now, in Part 8, it’s time to address how these changes might occur.

In the absence of a dramatic rethinking of the role of higher education, there is no reason to believe that time is our friend, that things will improve on their own, or that patience, however difficult to sustain, will prove to be a virtue. To the contrary, the rate of social and economic change is accelerating, and our educational infrastructure is lagging behind and becoming increasingly out-of-date.

The problem worsens, even as we examine it.

In an ideal world, a national spokesperson would emerge — a presidential candidate who would inspire us with an achievable vision of a future that would lift all Americans, and unite us with a goal and a sense of purpose that would sustain us as we worked to rebuild our higher educational infrastructure. Such a vision would imagine strong partnerships of higher education institutions, corporate America, and state and federal governments, allied and laser-focused on the educational outcomes we have been discussing throughout this series of essays.

Perhaps we will see that visionary emerge in the coming years; perhaps not.

But we could increase our chances literally 50-fold if we held open the possibility that such a person might emerge as a gubernatorial candidate. The work I am describing could (and perhaps should) be done at the state level, as a proof of concept, before becoming a national call to arms.

Where would such a candidate begin? How might a conversation be initiated? Does it have to start with a visionary politician?

Well, no. In the absence of a rallying cry from a political candidate, quite a bit of work could be done in advance, to prepare the ground, as it were. There are two other entities that would, in any case, need to be a part of any proposed solution. They are the institutions of higher education themselves, and the businesses, industries, foundations and non-governmental organizations (NGOs) that are, in their various ways, totally captive to the success or failure of the educational transformation about which I have been speaking.

Let’s consider some of the steps each group might take, as a way of getting some cards on the table, and as bait for an ambitious yet socially conscious political candidate:

Initiatives from Higher Education

It seems obvious to me that the process starts with higher education’s acceptance of its role in changing the status quo in the hope that, by so doing, opportunities can be created with business and industry on the one hand, and federal, state and foundation officials on the other, that will allow the educational change process to be nurtured and to accelerate.

  • Higher education writ large must embrace the ideal of doubling the number of adult Americans with a four-year degree as quickly as possible. Each institution should decide for itself the particular role it intends to play, but these intentions should be clearly articulated on the institution’s website for all to see. (Public institutions may find that if their responses to this challenge are too tepid, the states will issue their own directives, a possibility that itself should provide adequate motivation for them to be imaginative in what they propose.)

I note with interest that, at present, the total undergraduate enrollment of the eight Ivy League schools is less than 60,000 students. Moreover, of the 273,000 applications for admission to one or more of the Ivies last year, only 23,500 were sent letters of acceptance — well under one in 10.

With so much attention being given to the enrollment policies of these exalted institutions, focused especially on urging them to accept many more talented but low-income students, one wonders why they do not allow themselves to grow. Only two of the Ivies have more than 7,000 undergraduates — but public institutions such as the University of California, Berkeley, UCLA, and the University of Michigan, all of which are ranked nearly as high as the Ivies, have more than 30,000 undergraduates each.

So if there is no close connection between small size and high ranking, why do the Ivies ignore the growing demand for their services? [1] And if they are not willing to be part of the solution toward a better educated America, then why is it acceptable that Washington should continue the current tax policies that encourage them to grow their endowments but not their student bodies?

  • Increasing the number of traditional-age students admitted. Many institutions apparently believe it is in their interest to limit access (by offering only a modest number of acceptances), in order to enhance the perception that their quality as an institution is derived from their exclusivity. We should applaud institutions, such as Arizona State University, that have responded to growing demand by adding to their enrollments, rather than by increasing the number of denial letters.

 

  • A commitment to retaining and graduating students in far greater numbers. (Two good examples related to improved student success are Southern New Hampshire University [2] and Gateway Community and Technical College [3]). As I have argued earlier in these essays, admission without graduation is in no one’s interest. Campuses committed to working conscientiously and effectively to drive up retention and graduation rates will lower the risk that students and parents will take out loans but leave without a degree, and will also reduce the cost per degree awarded.

 

  • Adult students. I spoke at length in the previous essay about the failure of most of higher education to create meaningful opportunities for adults to complete their undergraduate degrees, or to obtain post-baccalaureate certificates or graduate degrees. The demand for these services will escalate dramatically in the coming years, and higher education is currently completely unprepared. Again, every institution should commit to articulating the role it will play in providing access for adults, and to advertise that role prominently on its website. (These are not simple matters to resolve. Despite a state commitment, Tennessee, for example, is falling behind its goal of having 55 percent of its adults with a degree or high-value certificate by 2025. [4] Worthy goals must be supported by a realistic plan to meet the goals.)

 

  • Related to the role institutions need to play in providing access for adult students is the opportunity they have to create long-term relationships in which their alumni return repeatedly to upgrade their skills. This idea of “return” does not need to be in person; much of adult education in the future will be largely online. But higher education institutions have historically spoken of being “learning communities” and of their commitment to “life-long learning.” Creating relationships with one’s own alumni, such that they think in terms of repeated episodes of focused learning throughout their working lives (and perhaps beyond, into their retirement years) represents both a need and an opportunity that higher education institutions must seize.

 

  • Cost issues: We must work to make the cost of a degree or certificate cheaper, and more effective and efficient. (A recent book provides an analysis of why college costs continue to rise.) [5] We must develop models and proofs of concept and sell these ideas to government and business. (There is no shortage of ideas. Think about the recent efforts to make certain public institutions tuition-free for qualifying students. [6] Various foundations have developed thought pieces for consideration by higher education institutions. [7]) We need to think about achieving specific competencies, not accumulating seat time. We need to use technology wherever it is reasonable to do so, recognizing that not everyone needs or expects the same thing. Our objective should be to meet students where they are and take them to where they need to go. (For example, California Governor Jerry Brown has provided $120 million in his 2019 proposed budget for a new online community college to help provide access to the millions of Californians who now cannot physically attend an existing college or university.) [8]

Initiatives from Business and Industry

  • There are already a handful of wonderfully creative programs that have been initiated by corporate America. One such is the program by Starbucks, in conjunction with Arizona State University, to create educational pathways leading to an undergraduate degree at minimal cost for Starbucks’ employees. [9] There is no reason why similar programs could not be initiated by other major employers, working with their local public and private institutions of higher education.

 

  • Internships: Many businesses and corporations (and NGOs) now offer internship opportunities for local students to receive college credit in return for an apprentice-type role within the organization. These positions sometimes lead to offers of permanent employment, inasmuch as the business and the intern can learn about each other within the safe confines of an internship. But this idea could be greatly expanded to look far more like the co-op model pioneered many years ago by Northeastern University, wherein students alternated semesters or years in class and at work, effectively putting themselves through school without incurring debt. Something akin to this model will be needed to ensure access to higher education for low-income students today.

 

  • Consortia: Chambers of Commerce should work with their business members, and their human resources offices, to identify particular skill sets needed by employees of various companies to advance in their careers, and to identify the employees themselves in order to create a critical mass of students that would justify a programmatic response by a local higher education institution. Something like this once happened for K-12 teachers, who individually were working at many different schools, but who collectively generated the numbers that prompted universities to respond, creating a pathway by which the teachers could earn their graduate degrees. The kind of work I am suggesting through the development of consortia mediated by chambers of commerce would not always need to be for academic credit, depending on the circumstances, but regardless, the design would prove economically feasible and beneficial for all parties.

Initiatives from Foundations and Government

  • There is no shortage of foundations vitally interested in enlarging and enhancing educational success, and collectively they have spent millions of dollars to develop examples of best practices — and yet the results to date have been less than earth-shaking. But the reason underlying the modest success shown to date is that generally there is no true and lasting partnership: The foundation grant is to a handful of well-meaning individuals at a particular institution, but the institution itself has made no commitment to change its business model. And once the grant funds are expended, things generally revert to the status quo.

The missing ingredient here is government.

Whether at the local, state or federal level, there needs to be far better coordination between and among the funders (foundations and government agencies) and the providers of product (the higher education institutions). As it is, government and foundations often find themselves serving as individual funding sources when they could be collaborating. (State elected officials also worry about the cost to students and their families of public institutions, and recently have been endeavoring to create a shared policy regarding tuition prices. [10] Even so, individual states continue to cut appropriations to their public colleges and universities. [11] There are concerns that the Trump administration is abandoning the long-standing partnership between the federal government and higher education. [12] But good ideas continue to be advanced by both external groups [13] and internal government committees. [14])

Both foundations and governmental agencies are in love with the idea of consortia of colleges and universities collaborating to maximize the scope and significance of the work that is being supported by the grant. Yet as we have seen, higher education institutions compete with each other in every conceivable way. Expecting them to get together voluntarily to develop a shared philosophy in order to qualify for a grant will ensure, at best, lowest-common-denominator thinking. True innovation is far more likely to come from an individual institution, and long-term success will come when the resulting model is copied by other institutions as a new “best practice.” Funding entities should focus more on competitive grants (colleges and universities understand competition), rather than seeking cooperation and collaboration as a first step.

Finally, foundations and governmental agencies should stop looking at their traditional partners, and broaden the scope of their search image. Bluntly, true innovation is far less likely to come from wealthy institutions that are today well buffered against the winds of change (such as the Ivies), and far more likely to arise within tuition-dependent institutions for which pragmatism overrules an oversubscription to ideology.

As Samuel Johnson famously said, “Depend on it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.” Innovation will come from institutions that are now feeling threatened — and funders, be they foundations or government agencies, should ensure that both public and private institutions are eligible to compete for funds.

Summary

The connection between educational attainment and economic strength (at the level of both the person and society as a whole) is so strong, and of such long duration, that we are inclined to take it for granted. Historically, as it has proved socially necessary and desirable, the level of educational attainment has grown with changing societal needs, but in ways that sometimes make it difficult to determine which is the cause and which the response.

This chummy relationship is now in peril  — a fact we have been almost fatally slow to realize. America’s current economy is gravely threatened by an imbalance between the actual skills and abilities of our workforce, and the needs of business and industry.

A highly inefficient educational system — a pipeline with as many leaks as intact pipe — acceptable though it may have been in the past, now reveals its inadequacies in 21st-century America. We literally cannot afford to have so many people of working age with such a limited set of skills — and yet our educational system is not in any way designed to raise the achieved educational level of the American public in a short period of time.

Leaving aside the question of the adequacy or inadequacy of K-12 education in America, our highly disaggregated system of colleges and universities, responding far more robustly to their own internal perception of needs rather than to those expressed by the broader society, is still showing its inability to be what America needs it to be today. Absent any even more compelling reason, there should be no expectation on anyone’s part that somehow — magically — all will be well at some point in the near future.

Some — a few — individual campuses will respond in meaningful ways and will therefore survive as institutions, but the likelihood that enough campuses will adapt to meet current needs is sufficiently low that America will surely face an extended period of slow economic growth, and fall behind the economies of other countries that are growing far more rapidly. The long-term consequences to the viability of American democracy are hard to predict, but they will certainly be negative.

The problem is akin to the challenge of untying the famous Gordian knot: Where to begin? Although there are things that will almost certainly happen for the better at some colleges and universities, and on the part of some businesses, the magnitude of the problem requires the government to play a significant role. This is the kind of problem that government exists to resolve because it is just too large to be taken on effectively by other component of society.

In the years at the end of World War II, and despite a decade-long Great Depression, followed by a brutal and devastating war, America nevertheless found within itself the capacity to respond to the “can do” attitude of our national leaders at the time by imagining a far larger population of college students than had ever previously existed. In the complete absence of evidence, Americans believed that by investing huge numbers of tax dollars to build and expand hundreds of colleges and universities they would be creating a better world for their children, their neighbors and the country as a whole.

We desperately need someone to articulate a similar need today, whether at the state or federal level, and those of us in higher education must be ready to respond to that call. We desperately need a new Truman Commission. The future of higher education — the future of America — depends on our collective response to this crisis.

[1] “Top universities could take thousands more low-income students, study says,” Hechinger Report, May 2, 2017

[2] “Spotlight on Innovation: How Southern New Hampshire is Replacing Remedial Education with Just-in-Time Academic Assistance,” Academic Impressions, Jan. 11, 2018

[3] “Spotlight on Innovation: A New Take on Developmental Education and Gateway Community and Technical College,” Academic Impressions, Jan. 12, 2018

[4] “Tennessee colleges face achievement gaps and decreasing adult student enrollment,” Inside Higher Ed, Jan. 9, 2018

[5] “The Road Ahead for America’s Colleges and Universities,” Archibald and Feldman, Oxford University Press, 2017

[6] “Why Free College Tuition Is Spreading from Cities to States,” Huffington Post, Jan. 5, 2018

[7] “Making College Affordable,” Jack Kent Cooke Foundation, November 2017

[8] “Mixed Reviews for California’s Proposed Budget,” Inside Higher Ed, Jan. 11, 2018

[9] A Dec. 11, 2017, posting on the Starbucks website took note of the 1,000th graduate of this program which was initiated three years ago

[10] “State higher ed leaders call for better coordination on tuition,” Inside Higher Ed, Nov. 9, 2017

[11] “Iowa’s public universities facing another $5.1 million cut,” The Gazette, Jan. 11, 2018

[12] “There are no quick fixes for the failing American university,” Washington Post, Dec. 19, 2017

[13] “Necessary but insufficient: federal-state affordability partnerships must also incentivize completion,” Young Invincibles, November 2017

[14] “The college affordability crisis in America,” U.S. Congress Joint Economic Committee, November 2017

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Can Higher Education Solve America’s Economic Crisis?

Part 7: We Have the Skill — But Do We Have the Will?

For the past six weeks, these essays have been examining the relationship between our national economy and the level of educational attainment of our national workforce. But before we transition from what we need to change to how we can actually achieve our higher education goals — which are both to strengthen the national economy and to provide better-paying jobs for many more people — let’s review just why this issue is so important.

As I noted earlier in this series, the percentage of adult Americans with a four-year degree at the end of World War II was just 5 percent. That percentage had changed only marginally during the preceding 100 years, and if that same model had been kept in place, we would have expected only modest growth in the percentage of college graduates over the past 70 years.

Instead, the percentage of college graduates increased by a factor of six — but only because the federal government created a plan (combining the G.I. Bill with the report from Truman Commission on Higher Education for American Democracy) that was then jointly implemented by the federal and state governments working together. Government then did what only government can do: It took on a problem of immense size and changed the infrastructure of higher education in America. The result was the most prosperous era in the history of our country.

America needs to do this again. And recognizing the need to change the higher education infrastructure is the first step in fashioning a plan to achieve our goal for a dramatically different outcome.

Let’s look at current data, for both traditional age and adult learners, to learn why we need to do better. [1] There are several important reasons:

  1. Our Current Educational Outcomes Are Woefully Inadequate

Consider the transition from high school to college:

  • About 70 percent of high school graduates enter a two-year (25 percent) or four-year (44 percent) school in the fall semester following their graduation.
  • African-American students are more likely to start at two-year schools (39 percent) than are white students (33 percent).
  • Students from the top quartile of family income are significantly (78 percent) more likely to start college immediately after high school than are students from the bottom quartile of family income (46 percent).
  • College graduation rates vary considerably by race and economic level. The six-year graduation rate for white students is 62 percent, but only 45 percent for Hispanic students and 38 percent for African-American students.
  • The graduation rate for students from the top quartile of family income is 60 percent (across all races and ethnicities), but just 14 percent from students from the bottom quartile of family income.
  • Since many more low-income students receive inferior K-12 educations than do high-income students, it is useful to compare the graduation rates of those high- and low-income students who are, by virtue of standardized test scores, deemed ready for college-level work. Among these populations, academically strong high-income students have a 74 percent graduation rate, whereas academically strong low-income students have just a 41 percent graduation rate.
  • About 36 percent of white students are part-time, compared to 42 percent of students of color.
  • The six-year graduation rate for full-time students is 65 percent; for part-time students it is 18 percent. [2]

What these data tell us is that the current infrastructure of higher education in America works quite well for relatively affluent white students who attend college on a full-time basis. Conversely, that same infrastructure is shamefully inadequate for students who are of color, part-time and/or low-income.

Putting greater effort into increasing the number of graduates from affluent white families, however desirable in the abstract, will have much less impact on increasing the overall percentage of the adult American public with at least a four-year degree than would a focus on low-income and/or students of color.

  1. Increasing the Educational Level Increases Economic Strength

It is widely accepted that there is a strong (and growing) correlation between the level of educational attainment by an individual and his or her personal economic success. Economists have translated this statement into actual dollars, and it is generally agreed that the typical four-year college graduate has lifetime earnings that are hundreds of thousands — and quite possibly over a million — dollars more than the typical high school graduate [3], and that the gap in lifetime earnings has grown over time, not shrunk. This is certainly one reason, and perhaps the primary reason, why so many parents are so anxious for their children to attend and graduate from college.

But, to be entirely correct, the relationship between education and individual economic success is best interpreted as correlation, rather than cause and effect. A college degree does not guarantee economic success, any more than the lack of a college degree guarantees economic failure.

Moreover, the value of a college degree is in having completed the degree: Anything less than a full degree is of only limited economic value, and if the non-completer has borrowed money to attend college, and has student debt but no degree, he or she may well be worse off economically than if that person had never started college in the first place. (The student loan default rate on loans under $5,000, typical of a non-completer, is 31 percent, compared to a 17 percent default rate for loans over $100,000, a level of debt typical of someone with a graduate or professional degree. [4] The point is: Students who don’t complete their academic program often have no way to repay their loan, even when it is quite small.)

And that is why, in these essays, I have consistently stressed the need for colleges and universities to improve their students’ graduation rates dramatically.

But there probably has been too much attention placed on the economic value of a college degree to the individual, at the expense of considering what a high percentage of college graduates in a given geographic region or state means to the economy of that region or state.

Consider two examples:

  • Of North Carolina’s 100 counties, the proportion of adults with at least a bachelor’s degree exceeds 40 percent in only three counties — Durham, Orange and Wake — the homes of Duke, the University of North Carolina, and North Carolina State, respectively, as well as the Research Triangle. Of all the new jobs in North Carolina since 2008, 40 percent have occurred in Wake and Mecklenburg Counties (the latter is home to Charlotte, the state’s banking center). These counties are thriving while most other North Carolina counties are struggling because, as one observer noted, “employers don’t want to relocate without the promise of a skilled workforce.” In other words, success breeds success, and a well-educated workforce is a necessary prerequisite for economic success in a given geographic region. [5]
  • Of the 10 states with the highest level of educational attainment (bachelor’s degrees plus graduate and professional degrees), eight are also among the 10 states with the highest median per capita income. [6] If we improve college completion rates, we will enhance the economy of the state, the region and the nation.
  1. Doing Nothing Means Abandoning an Important Part of Higher Education’s Mission

The consequences of our failing to address today’s huge disparity between the skills needed by corporations and the actual skills possessed by the workforce is to open the door to two real possibilities:

  • About 30 years ago, traditional higher education failed to respond to the growing demand for adult education, leading to a proliferation of for-profit entities, many of which disproportionately drained federal support dollars while too often providing precious little of value to their students. In time, many of those for-profit schools crashed and burned, and taxpayers ended up bailing out students who had borrowed money, but who no longer had a school at which to continue their education. This could happen all over again, if traditional higher education proves its unwillingness once again to adjust its business model to include a parallel track for adult learners.
  • Even today, some businesses and corporations have grown tired of waiting for traditional higher education to respond, and have developed corporate training programs of their own, siphoning off students who would be, in the long term, better off earning a recognized degree from an accredited institution — but that would require the institutions to provide the students the means to do so. In short, traditional higher education seems unwilling to recognize both that it no longer has a monopoly and that new markets are opening to which it is failing to respond (or responding too slowly).
  1. The Level of Higher Education Affects Community Health and Wealth Inequality

It’s not only the economic well-being of the local community that is affected by the percentage of the working population with a college degree. Another matter entirely relates to health and longevity.

Since 2000, one-third of all manufacturing jobs in the United States — more than 5 million jobs, paying an average of almost $21 per hour — have been lost. Service jobs, paying about half as much, have increased (though not by 5 million). But the displacement of workers and the loss of income — especially on the part of white, non-college educated workers — has contributed to a rapid increase in mortality rates in those 50 to 54 years of age. [7] In less than 20 years, mortality rates for non-college educated white workers have almost tripled for both men and women, relative to the mortality rates of college-educated white workers. [8]

Education directed at the job market of the future, not the job market of the past, may literally save lives.

Finally, there is the issue of growing income and wealth inequality. [9] This is a hot-button topic for many people who are philosophically opposed to any notion of resource redistribution. But rather than arguing for splitting the economic pie more equitably, I would instead suggest growing the pie.

I have noted several times in this series of essays that wealth and income inequality have grown markedly over the past 40 years to the point that in 2014, the top 1 percent of the population had 39 percent of all of the wealth, whereas the bottom 90 percent had just 27 percent. (In 1978, the top 1 percent had about 22 percent, and the bottom 90 percent had almost 40 percent.) [10] In the years since 2009, 52 percent of all growth in real income has gone to the top 1 percent. [11]

There are multiple causes to this rapid and unwelcome shift in overall wealth and income distribution, principal among them being our tax code, but a major contributor has also been the loss of middle-class jobs, particularly in manufacturing, as I just noted.

The challenge that we are facing today is not so much that the nature of the job market is changing, but the rate at which that change is occurring. What we are seeing today in no sense replicates our nation’s earlier shift from an agrarian economy to a manufacturing economy — a shift that we measured in decades, if not centuries. Technology and a global marketplace means that entire professions now come and go within a few years. (At different times in the relatively recent past, there was great concern we would exhaust the labor market before meeting the demand for telephone operators and key punch operators, two job categories that today essentially no longer exist.)

But an educational system that is designed to respond slowly and passively to shifts in student interests will be spectacularly inadequate to respond in a timely fashion to the rate at which today’s job market is changing.

Moreover, the traditional model of higher education was that it was something you did once, for four years. Then you secured a job using the skills you had obtained as a student, and those skills kept you employed until you retired. Higher education has yet to catch up to the fact that growing numbers of people will repeatedly need infusions of new skills throughout their lifetimes, and that means we must redesign our higher education institutions to provide those educational opportunities we know our society will require.

Far from waiting to respond to shifting demand, we must be out in front, anticipating how best to prepare students for the jobs of the future, not the jobs of the past. [12] Ironically, the easiest and best place to start is not with traditional-age students and the hidebound system we now use to educate them, but with adult students, through the use of stackable certificates that do not require a wholesale remaking of the curriculum.

  1. The Problem Will Worsen While We Debate Our Next Steps

Our challenge is compounded by the fact that whatever answers we develop must reflect not the realities of today, but the realities of tomorrow. We have to think as hockey great Wayne Gretzky famously said: “I skate to where the puck is going, not where it has been.” While we are dithering, here are just some of the changes that will further disturb the higher education landscape:

  • Federal Policy
    • Education Secretary Betsy DeVos [13] and President Trump himself, in his State of the Union address, [14] have encouraged both students and colleges to focus more on vocational training, and less on obtaining baccalaureate education. Encouraging high school graduates without plans to continue their education to think about vocational education is entirely proper, but encouraging students who now plan to obtain a four-year degree to obtain a vocational education instead will exacerbate our current shortage of workers educated at the bachelor’s level. [15],[16]
    • Lamar Alexander, R-Tenn., chair of the Senate Education Committee, is overseeing the rewriting of the Higher Education Act, and is promising significant changes. Among them is a reduction of federal oversight of for-profit institutions, a group that historically has used disproportionate amounts of federal student aid dollars, leaving fewer resources for students attending not-for-profit institutions. [17]
    • Alexander’s counterpart in the House, Rep. Virginia Foxx, R-N.C., echoed his concerns when she said that the current student aid system represented a “luxurious hammock in which students can repose” and “the trough at which universities feed.” [18] She added that there is “growing evidence that generous federal subsidies have driven tuition increases” — a canard that will not die despite repeated studies that don’t support such a conclusion. These views will not give comfort to those hoping for more federal assistance to produce more college graduates. As it now stands, the House bill is estimated by the Congressional Budget Office to reduce total federal spending on education by $14.6 billion over 10 years. [19]
  • State Efforts
    • Several states have, [20] or hope to have [21], programs which in various ways waive tuition for some students at some community colleges and/or public universities. There are now more than 200 such programs and proposals across the country, [22] with more in the works. [23] All such programs will increase the competition for students for colleges in the private sector; New York is already proposing to eliminate a state program to assist private colleges, in order to augment the funds supporting the public institutions of the state. [24] These policies could have the effect both of fatally wounding some private colleges and of increasing demand at public institutions, requiring the construction of new facilities and the addition of new faculty and staff — all at taxpayer expense but without any net increase in the overall number of college students.
  • Corporations
    • Various corporations are expanding programs with community colleges to train technical workers [25]—and that’s laudable, but only if these workers add to, rather than subtract from, the current population of students seeking four-year degrees.
    • Some corporations are providing their employees access at various educational levels to for-profit companies (unlike Starbucks and its relationship with the not-for-profit Arizona State University), as a recruiting and retention incentive. But the quality of some of these programs is questionable. [26] Moreover, these are now students who will be unavailable for recruitment by traditional higher education institutions, placing further strain on their business model.
    • Yet other corporations are designing specific courses and educational programs to be delivered by traditional higher education institutions, or online providers, because higher education is currently “failing to keep pace with the changing needs of the economy.” [27] At least one large corporation is not even waiting for students to complete high school. Oracle has built a charter high school at its corporate headquarters. [28] This arrangement may serve Oracle well in its quest for excellently trained future employees; it remains to be seen whether it will be in the best long-term interests of the students. We can expect to see many more corporate interventions in the future, if we in traditional higher education continue our focus on the educational models of the past.
    • Corporations are raiding higher education institutions for training and education talent. [29] And when the raider is Amazon, and the goal is to “create a path-setting adaptive system for employee learning,” it may be worth considering whether Amazon will keep what they learn “in-house” or whether this is the first step toward “Amazon University.”
    • On the other hand, some corporations are expanding their current programs of educational support for their employees at traditional higher education institutions — an opportunity for such institutions to expand their overall enrollments. [30]
  • Credit Rating Agencies
    • Both Standard & Poor’s [31] and Moody’s [32] have reduced their rating for higher education in general to a “negative outlook,” the effect of which is expected to be higher interest costs on bonds issued for construction projects — an additional strain on already very tight campus budgets.
  • New Educational Models and Technology
    • Boot camps [33] are targeted at both college graduates (as an alternative to a graduate degree) and those with just a high school diploma, with an educational focus on computer coding, although they are expanding into other fields as well. A few traditional universities, such as Northeastern, have developed their own boot camps, but most are in new educational providers such as Flatiron (recently acquired by the work-space company WeWork) or 2U (now also a partner of WeWork). [34] Will these be a flash in the pan, as MOOCs were a few years ago, or a new model of education that competes directly with traditional colleges and universities? It’s too soon to tell.
    • The future role of technology in higher education is all but impossible to predict, beyond saying that it will be considerable. Just one example: YouTube did not exist 13 years ago, but now boasts 1 billion hours of content watched every day. [35] That is an average of 8 minutes, every day, for every one of the 7.5 billion people on the planet. How will we be spending our time 10 years from now? We can’t say, other than to assume it will be different than how we spend our time today—and the relationship of time spent web browsing to education will surely grow closer.
  • Strategic mergers of institutions — to leverage different skills and complementary interests, rather than to avoid imminent extinction — bear close watching, especially where the institutions involved are led by entrepreneurial thinkers. To that end, the recent merger between Philadelphia University and Thomas Jefferson University may be of particular interest. [36] 

Consider this quote from a consultant of the merger: “The new focus of higher education must be learning agility, which includes adaptability, collaboration skills, and entrepreneurial outlook. It is a mindset that must precede the many skill sets that will be layered and shed over the longer arc of the career.” Might that accurately describe the role of higher education in the future?

  • Changing Social Structures
    • Finally, the nature of business interaction is changing rapidly. For decades, suppliers that were scattered all over the country shipped parts and materials to assembly sites, meaning that jobs existed in cities and towns of all sizes. But as we have moved from a manufacturing economy to a knowledge and service economy, where young educated people are choosing to live is changing. Digital products don’t have a supply chain and, increasingly, jobs are being centralized in “megacities,” where wages are rising disproportionately, at the expense of jobs in smaller cities and towns. [37] So on top of everything else, traditional colleges and universities may find their future inextricably linked with their location — and how they respond may determine if they even have a future.
  1.  We Must Be True to Our Democratic Ideals

There is one more reason why we must change the infrastructure of higher education, and it speaks to our governing philosophy as a country. It is easy to create a nexus between the virtues of a high level of educational attainment and the principles that underlie our democracy. Our aspirational goal as a nation, and one toward which we have struggled for more than two centuries, is focused on the ideals of justice, freedom and truth — and the liberty to pursue all three.

Our history as a nation, as I discussed in Part 4 of this series, included incremental steps that extended educational opportunities to more and more people to allow them to capitalize on their inherent abilities and thereby to strengthen our country and its economy. Even in times of war, visionaries such as Lincoln, Franklin Roosevelt and Truman looked to the horizon in charting a course for creating the capacity to enhance the educational level attained by our people.

But the ideals that, at various times in our history, have motivated us to serve ourselves by serving others have also periodically withered and been replaced by goals that are far less ambitious — and far more self-serving and shortsighted.

For example, opportunities for immigrants, hard-won over many decades and several generations, ultimately enhanced not only the lives of the children and grandchildren of those immigrants but also the fabric of American society itself.

Yet what of today’s immigrants? What of those for whom past efforts were insufficient to move them out of poverty? Are we becoming inured to the presence of a permanent underclass, with successive generations forever destined to live in poverty, or on its edges? Why aren’t we trying harder to bring people on the margins into mainstream society by giving them the educational tools they need to be successful and independent? Surely we can see the value to ourselves in maximizing the number of people who are economically self-sufficient.

I think the answers to these questions are complex but resolvable. Rising levels of income and wealth inequality, to levels not seen since the days of the Robber Barons of the 19th and early 20th centuries, are leaving too many people economically marginalized, with barely the capacity to address their own day-to-day needs, let alone to worry about the long-term needs of others. And in the absence of a compelling vision for our nation’s future, articulated by our elected leaders, we become focused on the problems of today, not the possibilities of tomorrow.

It was not always this way.

Consider: Eisenhower championed the interstate highway system in 1956, knowing full well that he would never see its completion (which took 35 years). Kennedy promised to send astronauts to the moon, but even if he had served two full terms, the lead time of this project was such that it happened only after he would have been out of office.

Today, however, the political considerations behind particular initiatives give primary attention to whether the project can be completed before the next election. And the result is that our political priorities are focused on things that could happen today, or next week, but never on things that won’t happen for a decade.

In his recent book, “The Gifted Generation: When Government Was Good,” [38] David Goldfield examines this point at length. He focuses on the generation of Americans immediately after World War II: the first “baby boomers.” Goldfield is particularly attentive to the work of Truman, Eisenhower and Johnson as presidents who “believed in the commonwealth ideal” — that federal legislation could result in a better and stronger nation by encouraging individual opportunity.

Intentionally or not, Truman, Eisenhower and Johnson were following the advice of the economist John Maynard Keynes, who wrote, “The important thing for government is not to do things which individuals are doing already, and do them a little better or a little worse; but to do those things which at present are not done at all.” [39] (Eisenhower, presumably not a fan of the liberal Keynes, was fond of quoting a similar sentiment from a source he found more acceptable — Abraham Lincoln — who said: “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.”) [40]

The years immediately following World War II were a time of great optimism in America. Goldfield cites a Pew study that found, in the mid-1960s, almost 80 percent of Americans believed that government was good.

But by the 1980s, the pendulum had swung. President Reagan, for example, had a very different opinion about the role of government: “In this present crisis, government is not the solution to our problem; government is the problem.” [41] Similarly, in a 2001 radio interview, Grover Norquist, the founder of Americans for Tax Reform, famously said, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” [42]

It is perhaps not surprising that, by 2015, fewer than 15 percent of Americans still believed that government was good. The problem is that if the primary role of government is to take on problems that are too large for individuals to solve on their own, in the absence of citizen support government will do nothing, and the largest problems facing society will not only remain unresolved, but they won’t even be addressed.

It is one thing to develop a vision for how higher education could end the economic crisis; it is quite another to imagine how collective public support might be mustered for government to take on a project of that magnitude in today’s political climate. How tragic to have a solution at hand, but to lack the political will to implement it!

Perhaps the problem is that we are still inclined to rely on a political infrastructure that has proven inadequate to solve some of the most important problems of our day. Perhaps instead of waiting for Washington to provide the answers, those answers should come from the grassroots, in the hope that, if they are compelling enough, they will be incorporated into the national conversation.

Next time: How do we achieve our higher education goals? It’s time to forge a new social contract.

[1] Except for the last bullet, all data are from the website of the National Center for Education Statistics

[2] “The Future of Undergraduate Education,” American Academy of Arts and Sciences, November 2017

[3] “The Changing Business Model for Colleges and Universities,” Forbes, Feb. 6, 2018

[4] “When any debt (including college debt) is too much,” University Business, Dec. 18, 2017

[5] “The 2 North Carolinas,” The Chronicle of Higher Education, March 31, 2017

[6] U.S. Census Bureau, 2017

[7] “Higher Education: Your Life May Depend Upon It,” Academic Impressions, Sept. 19, 2017

[8] “A Dying Town,” The Chronicle of Higher Education, Jan. 5, 2018

[9] There are many recent books that treat this subject at length. A particularly good example is Makers and Takers: How Wall Street Destroyed Main Street, Rana Foroohar, 2017, Crown Business, New York, 388 pp.

[10] “The Tax Bill That Inequality Created,” The New York Times, Dec. 17, 2017

[11] “Striking It Richer: The Evolution of Top Incomes in the United States,” National Bureau of Economic Research, June 30, 2016

[12] This point is examined at length in “The New Education: How to Revolutionize the University to Prepare Student for a World in Flux,” Cathy N. Davidson, Basic Books (2017)

[13] “DeVos says U.S. has emphasized four-year degrees at the expense of work-force training,” Inside Higher Ed, Nov. 28, 2017

[14] “Trump calls for converting community colleges to vocational schools,” Inside Higher Ed, Feb. 2, 2018

[15] “Community colleges emphasize their missions beyond training and including transfer,” Inside Higher Ed, Feb. 5, 2018

[16] “Trump says community colleges should be called ‘vocational’ schools. Um, they aren’t the same thing,” The Washington Post, Feb. 5, 2018

[17] “Alexander White Paper Lays Out Framework for Higher Education Accountability,” Inside Higher Ed, Feb. 2, 2018

[18] “Taming the tuition tiger,” Washington Times, Jan. 22, 2018

[19] “CBO: House Bill Would Reduce Spending by $14.6B,” Inside Higher Ed, Feb. 7, 2018

[20] “Tennessee Gov. Wants 15 to Finish in Promise,” Inside Higher Ed, Feb. 1, 2018. New Jersey, New York, and Rhode Island are among the other states with some form of tuition waiver.

[21] “’Pennsylvania Promise’ proposal could significantly reduce college tuition for 137K Pennsylvania students,” AASCU EdLines, Jan. 30, 2018

[22] “The Changing Business Model for Colleges and Universities,” Forbes, Feb. 6, 2018

[23] “A Serious Push for Free College in California,” The Nation, Feb. 7, 2018

[24] “Governor proposes cuts to private college financial aid,” Watertown Daily News, February 6, 2018

[25] “BMW seeks more humans to maintain Greer plant’s robots,” Greenville Online, Jan. 31, 2018

[26] “Restaurant Group, Pearson to Offer Free Education to Employees,” Inside Higher Ed, Jan. 23, 2018

[27] “Impatient with universities’ slow pace of change, employers go around them,” The Hechinger Report, Dec. 18, 2017

[28] “A Public High School of a Tech Giant’s Campus,” The New York Times, Dec. 4, 2017

[29] “Amazon’s high-profile hire from higher education: Candace Thille,” Inside Higher Ed, Jan. 29, 2018

[30] “Disney to give $1,000 bonuses to 125,000 employees and create a higher education program,” LA Times, Jan. 23, 2018

[31] “Outlook for Higher Ed Is Bleak, Ratings Agency Says,” The Chronicle of Higher Education, Jan. 23, 2018

[32] “Moody’s warns that lackluster state support will strain university budgets,” Washington Post, Jan. 30, 2018

[33] “Boot-camp sector keeps growing while influencing higher education,” Inside Higher Ed, Jan. 31, 2018

[34] “New partnership between WeWork and 2U aims at lifelong learners,” Inside Higher Ed, Jan. 23, 2018

[35] “7 Ed Tech Trends to Watch in 2018,” Campus Technology, Jan. 11, 2018

[36] “The Revolution Has Started,” Innovator, Summer 2017

[37] “The Megacity, Untethered,” The New York Times, Dec. 24, 2017

[38] Bloomsbury Publishing, New York & London, 2017, 534 pp.

[39] “Essays in Persuasion,” Macmillan, 1931

[40] Goldfield, The Gifted Generation,” p. 5

[41] Inaugural address, January, 1981

[42] NPR’s Morning Edition, May 25, 2001

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Can Higher Education Solve America’s Economic Crisis?

Part 6: What We Need to Do - Working Backward from Desired Outcomes

So let’s take stock of where we stand. About 32 percent of the American adult population (36 percent of the workforce) has at least a bachelor’s degree, and that percentage has been increasing steadily since 1960, growing by about 0.5 percent per year. But according to Georgetown University’s Center for Education and the Workforce [1], our economy needs more than 70 percent of the workforce to be educated at the bachelor’s degree or greater. At the current rate of growth, it will take us more than 70 years to hit that target. That is, we’ll be just where we need to be by about 2090 — much too late to be of any use.

We are dealing with a set of paradoxes, and a quandary. It is a paradox that never in the history of our nation have we enjoyed such a high level of educational attainment, and yet never before has our level of educational attainment been so far below what we need it to be. Similarly, we have never before seen such a tight and powerful connection between having a college degree and individual economic success — and yet, in proportion to the size of our stagnant median family income, never has the cost of access to institutions of higher education been greater.

Our system of higher education works well for those whose families are themselves college educated, but it is not easily accessed by those who are prospective first-generation college students. Finally, we do a far better job of providing a college education to traditional-age students, particularly if they are full-time and academically well-prepared, than we do to part-time, academically weak students (especially if they require “remediation”) — and we generally do a terrible job at creating access to a college education for working adults.

The result of this chronic bifurcation of outcomes is an America that is increasingly divided between those who, from an economic perspective, are thriving, and those who are struggling, or even failing. This growing economic divide polarizes us in other ways as well: in terms of health and quality of life; in terms of reliance on (or independence from) various parts of the social safety net; and in terms of our politics and world view. [2]

The quandary is: How do we resolve all these paradoxes that continue to thwart not only our efforts to strengthen the economy but also our desire for a more just and equitable society?

It’s not for lack of vision or intent. Most states now have higher education attainment goals that anticipate that between 55 and 65 percent of their adult population will have a degree or high-value certificate, to be realized by the middle of the next decade. But few states have developed actual plans to achieve these goals.

In the meantime, too many young people with too little education create a drag on economic growth. [3] This point was reinforced by a recent comprehensive federal survey of high school graduates revealing that of the 28 percent who had not enrolled in any post-secondary program, more than four in 10 earned less than $10,000 in 2015. [4]

What must happen to get us from where we are today to where we need to be?

As is true for infrastructure in general, the infrastructure supporting education in this country functions to maintain the status quo — and this is a critical point. If there is a desire is to change the status quo in almost anything — certainly including educational attainment — then it necessarily follows that the first step must be to change the infrastructure. This seems obvious, but we continue to believe that by making a few tweaks in whatever represents the current infrastructure, we will somehow create a dramatically different outcome.

Our best approach, therefore, is to identify the outcomes we wish and then work backward to create the infrastructure to achieve those outcomes. [5]

In building a new higher education infrastructure, our primary concern should be to eliminate the obstacles that make college graduation such a challenge for low-income and/or students from underrepresented groups at present. Relatively affluent and academically strong white students who attend college on a full-time basis graduate at the rate of 74 percent; [6] the target for minority and/or low-income students should be no less. However, at present differences in educational outcomes by category are common and will not be easy challenges to overcome. For example, the graduation rate of students receiving Pell Grants (yearly household incomes less than $50,000) is currently 7 percent below non-Pell students. [7]

Programmatically, we must identify action steps that would increase both the participation and the graduation rates of currently underrepresented students. The good news is that there are many opportunities for improvement. For example, nationally, only 67 percent of freshman students return for their sophomore year. [8] It is unacceptable for higher education — so vital a component of our society — to lose one-third of its numbers every single year.

Here are a few things that could be done to improve this statistic:

  • Assign all incoming students in groups of no more than 20 to educational mentoring teams consisting of a faculty member, a member of the student support staff, and one or two upperclassmen. The specified goal: supporting and mentoring each member of the cohort by connecting them to the college community (so they begin thinking of themselves as belonging to the college “family”) and helping them overcome any emotional and psychological challenges they may have relative to moving from high school to college, generally without their family support system conveniently in place. It is in no one’s interest to have students fail at the outset because we choose to withhold the support and encouragement they needed to be successful during their critical first semester.
  • Some students would benefit from a trial run at college. Colleges should create an option for incoming freshmen to participate in a six-week on-campus summer program, where they would acclimate to student life before their freshman year actually begins, during which time they could also earn six credits of coursework and get a head start on their college career. For good or ill, many students are traumatized by the notion of being away from home and attending college. The point shouldn’t be to make them feel inadequate, but to support them as they are take a very big first step toward independent adulthood.
  • Students are normally assigned a faculty adviser at or near the beginning of their freshman year, but “advising” is second only to parking as a source of student complaints. Faculty generally do a fine job of assisting students with course selection, especially in the major. But at the very beginning of their college careers, what students most need is someone in whom they can confide, in whom they trust, who they feel has their interests very much at heart. And not all faculty have the time or the training to play that role, especially for first-year students who may not yet have selected a major. Instead, we need to think about augmenting course advising with a different type of advising, wherein trained members of the staff take on a distinct  mentorship responsibility for freshman students in particular. [9] We should think of these individuals more as guides than traditional advisers, augmenting and not replacing the work of faculty advisers. These compassionate and caring people would provide guidance and assistance to first-year students who too often see a speed bump as the equivalent of the Andes: impossibly challenging, and a reason to turn and flee.
  • We have to think about the cost of attending college as inclusive of more than just tuition and fees. Food insecurity is a big issue for a significant number of students [10], and child care costs can be prohibitive for single mothers trying to obtain a college education [11]. Expanding the scope and size of Pell Grants would be an obvious first step. The SEEK program at the City University of New York has been around for 50 years and has helped more than 400,000 students dramatically improve their educational outcomes for a cost of less than $3,000 per year per student. [12] The Career Pathways Initiative, using federal Temporary Assistance to Needy Families funds, has shown for a decade how Arkansas has achieved far better educational outcomes. [13] Or try something truly radical: Pay students to be students, in recognition of the fact that being a full-time student is, in effect, their job. [14] They are more likely to persist if they are being paid.
  • Finally, we need to be mindful that students need to see people who look like them, who can be role models with whom they can feel an affinity. That’s why the faculty and staff need to be as diverse as the student body, such that a young Latina may reasonably expect to see an older version of herself at the front of the classroom, or as her adviser. And that’s why a trans student, or a bisexual student, should never wonder if he or she is somehow unique on the campus, but instead is invited to become a part of a supportive system for students, staff and faculty of like orientation.

Programs like these exist now at various universities and colleges, generally in bits and pieces, but they haven’t yet become commonplace on most campuses. Partly it’s a question of expense, but there is a strong underlying sentiment at many schools that higher education is all about self-reliance, and that too much “hand-holding” somehow makes ignoble the process of becoming a college graduate.

To which I say: Baloney!

The fact is that retention and graduation rates at far too many colleges and universities continue to be abysmal, and there is no indication that minor adjustments in the system here and there will change the outcomes in any significant way. Our objective should be to retain and graduate every student we admit, and while I will quickly acknowledge that to be an impossibly high standard, we shouldn’t accept as inevitable that a significant number of students must fail to demonstrate that the education of those who survive means something.

We know how to do better; we simply need to resolve to implement the strategies and practices that will make us better.

Adult Learners

“Adult learners” are defined as those 25 years and older who have not been continuously enrolled in higher education. As I noted previously, 32 percent of adult Americans have either a bachelor’s degree (20.4 percent) or a graduate or professional degree (11.6 percent). But almost as many adult Americans have some college, including an associate’s degree (9 percent), a high-value certificate (4.9 percent) or post-high school credits but no degree or certificate (16.2 percent).

If the “some college” population of adults could be transformed into graduates at the bachelor’s level, we would very quickly almost double our current numbers of college graduates. For various reasons, that’s not a practical goal. But the point is the pool of such people is huge, and even limited success would be transformational for the American economy.

Higher education institutions were initially created to serve newly minted high school graduates who attended college on a full-time basis, often lived in residence and graduated by the age of 22 or so after accumulating at least 120 credits, mostly earned on a “seat time” basis. (To this day, the coin of the educational realm is the Carnegie unit, defined as 15 hours of contact time, generally in a classroom. A typical three-unit course therefore requires 45 hours of contact time — three hours per week for a 15-week semester.)

Even today, most colleges or universities are ill-designed to serve adult learners, who rarely have the option of being a full-time student, for whom work and/or family obligations preclude their being in residence, and for whom 45 hours of in-class seat time to earn three credits is a luxury few can afford.

New models of education, focused on the demonstrated acquisition of specified skills and capabilities (so-called “competency-based learning”), aided by the use of technology and individualized for each student, show the promise of moving adult learners far more quickly along the educational continuum than is true for the usual “seat time” undergraduate. [15] The federal Department of Education has been slow to endorse these models, in large measure because of legitimate concerns that they may open the door to fraud (claims of learning unsubstantiated by any real demonstration of learning, all while relying on Pell grants and subsidized student loans). However, the Department of Education has begun approving a few models, and, should these models prove successful, they will undoubtedly become far more widespread.

The question is: How many current colleges and universities will see the need or take the opportunity to adopt them, since they present a very different educational methodology that some current faculty, staff and administrators may well find threatening to their sense of what a college education should represent? It will be interesting to see if campus traditions trump national economic needs.

For-profit institutions will have no such compunctions, but it would be a tragic mistake for traditional higher education to leave adult learners to the tender mercies of the for-profits.

In summary, it is not at all difficult to imagine a different infrastructure — manifesting a different philosophy of what undergraduate education should represent — being constructed to support much greater inclusion and success for traditional-age students. We already know how to do this. We lack only the will to implement the support programs.

Similarly, traditional higher education has all but ignored adult learners. The doorways of opportunity, such as they are, for adult learners would require the skills of an experienced contortionist to move through, yet we clearly have the capability of constructing learning environments designed to meet their specific needs.

But we choose not to do so.

Let’s hope that the health of the American economy matters enough to motivate higher education institutions to accept the twin challenges of increasing retention and graduation rates of a demographically shifting population of traditional-age students — and to create effective learning environments for adult learners, with the ultimate objective of doubling the percentage of adult Americans with at least a four-year degree.

Next time: We have the skill, but do we have the will?

[1] “America’s Divided Recovery: College Haves and Have-Nots,” 2016

[2] “Three things to consider about increasing access to higher education,” Inside Higher Ed, Jan. 17, 2017. (The author, Dan Greenstein, was until recently the director of postsecondary success at the Bill & Melinda Gates Foundation.)

[3] “Millions of young adults have entered the workforce with no more than a high school diploma,” Brookings, Jan. 31, 2018

[4] “Study: 72 percent of ninth graders have some postsecondary education within seven years,” Inside Higher Ed, Feb. 2, 2018

[5] An example of the kinds of outcomes we should be seeking to implement are found in a recent comprehensive report from the American Academy of Arts & Sciences (“The Future of Undergraduate Education,” November, 2017) that focuses on three major priorities: strengthening the student experience; increasing completion rates and reducing inequities; and controlling costs and increasing affordability. Achieving those priorities can only be achieved through substantial changes to the higher education infrastructure.

[6] Website of the National Center for Education Statistics.

[7] “A look at Pell Grant recipients’ graduation rates,” Brookings, Oct. 25, 2017

[8] “What college freshman retention rates miss when measuring student success,” University Business, Dec. 21, 2017

[9] “Can Colleges Engineer Relationships?” The Chronicle of Higher Education, Jan. 19, 2018

[10] “It’s Hard to Study if You’re Hungry,” The New York Times, Jan. 14, 2018. Governors Brown (CA) and Cuomo (NY) have both addressed this issue in their most recent budget proposals.

[11] “What College is Like as a Single Mother,” The Atlantic, Jan. 16, 2018

[12] “These colleges turn low-income students into middle-class learners—but how?” Hechinger Report, Feb. 5, 2018

[13] “The Arkansas Career Pathways Initiative,” College Counts website

[14] “Students should be paid to study,” Huffington Post, Jan. 13, 2018

[15] One such example is the online program College for America, developed by Southern New Hampshire University.

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Can Higher Education Solve America’s Economic Crisis?

Part 4: How Many American Adults Should Have a College Education — and How (and by Whom) Is That Question Answered?

A quick history of education

The history of education is fascinating, if only because it can be seen as evidence of how the powerful have repeatedly used limiting access to education as a weapon to deny rights and opportunities to the underclass.

Let me restate that point, because it is important: Historically, the expansion and enhancement of literacy rarely resulted from a deliberate policy of benevolence but instead occurred because at various times expanded literacy proved to be in the economic interests of the ruling class. We should never assume that the default position is increased literacy; to the contrary, the default position is continued ignorance of the underclass, and it is shocking to see confirmation of that even today. (Witness current efforts in Washington and in various states to focus public higher education on job preparation, at the expense of a traditional liberal arts education. [1])

In the Middle Ages, before Gutenberg and his printing press created mass-produced books, formal education was essentially lacking in most European countries — unless you were a monk. The capacity to read and write was essential for members of the clergy because they needed to be able to read the Mass or to copy manuscripts. But since the Mass was read to the congregation, it was not necessary (and, from the standpoint of the church, not necessarily desirable) for common folk to be able to read and write themselves. They needed to know only what God wanted of them, and the monks, who could read God’s word, were there to tell them. So no good could come from universal literacy.

The printing press, the Renaissance and the Age of Enlightenment all worked to change the thinking about literacy. And as the Industrial Age began to replace a largely agrarian economy, workers needed to be able to read, write and add and subtract numbers, in order to provide greater utility to the merchants and factory owners for whom they worked.

During the 19th century, free public education through grade six became a common goal in the United States and in many European countries, and the resulting more literate workforce drove economies upward. In America, the idea of a universal high school education began to spread during the latter years of the 19th century and into the early years of the 20th century. But as late as 1940, only half of American adults had earned a high school diploma.  (There are still almost 25 million adult Americans today — nearly 12 percent of all Americans over the age of 25 — who never finished high school.) [2]

Currently, high school completion rates nationally stand at 84 percent. But that means 16 percent of the class of 2017 failed to complete high school, and too many of those are entering a world without the skills needed to secure a well-paying job.

During the 1950s and 1960s, as it became increasingly clear that a far brighter economic future awaited those individuals who were able to attend and complete college, parents lobbied to do away with the two-track system in high school (wherein high-achieving students were placed on the “college” track and less successful students were put on the “clerical and trades” track), and instead to create a system that would prepare all students for college. (Whether the students actually chose to attend college was entirely up to them and their parents, but the argument was that they all should be prepared to attend college.)

This was an important change because, until this point, the expansion of educational opportunities was driven by the economic needs of the state or nation. Now we began to see an argument being made on behalf of the individual: it’s not enough that we have sufficient numbers of college graduates to meet our country’s economic needs. I want my child to have that opportunity.

Who should bear the cost of education?

Thus began the tension between the twin beneficiaries of expanded numbers of college graduates: society as a whole, because more college graduates meant increased tax revenues due to higher salaries; and the individual, because the college graduate clearly benefited economically and in so many other ways, in contrast to the person with just a high school education.

This tension has been at the heart of the debate over the last half century about the funding of higher education: Is it the responsibility of society at large, or should it be primarily the responsibility of the individual, and his or her parents?

College funding obligations aside, the problem with the goal of universal college preparation was that it resulted in too many high school students with a high school diploma in one hand and a college rejection letter in the other (or a letter of acceptance that required the student to do remedial work before being able to enroll in college-level courses). That is, a high school diploma and college readiness are not the same thing. Indeed, in some states more than half of students with a high school credential are not qualified to enroll in credit-bearing courses in college.

One answer to this problem has been to increase the size and number of community colleges, where students with little money and/or a poor K-12 education can begin their post-secondary work. For example, under the California Master Plan of 1960, students in the top eighth of their high school class were guaranteed a seat at one of the campuses of the University of California; students in the top third were admitted to a campus of the California State University; and everyone else was obliged to enroll in a community college. The idea was that students who completed their associate’s degree at the community college would then be offered the chance to transfer to a branch of the University of California or the California State University, where they could complete their undergraduate degree.

The problem in California and other states was that the “open admission” standard for community colleges — where anyone can enroll, even without having completed high school in some states — placed the community colleges in the position of having to remediate the relatively poor K-12 education received by a majority of their students. The students were, in effect, repeating work they ostensibly had been taught in high school but that they obviously had never learned. Even the California State University, which admitted only the top third of the high school graduating class, found itself with enormous numbers of students who required remediation before they could enroll in college mathematics or English courses.

The odds against completing a college degree rise dramatically if a student requires remediation. Six-year graduation rates at the California State University campuses vary considerably, but several have historically been below 40 percent, a figure that is sadly typical for many state colleges in other states as well.

Graduation rates at community colleges are far worse, in large measure because the percentage of college-ready students is even lower than in the state colleges. So three-year graduation rates (for a two-year associate’s degree) often fall below 20 percent, and most never finish their degree, let alone transfer to a four-year school.

How much education is enough?

The cost of providing an opportunity for a college education to students who did not receive a quality K-12 education, or who are “late bloomers,” is enormous. And yet the reason behind creating this opportunity remains as valid today as it was when the “two-track” system was abandoned: How else are people who are born poor, who attended failing K-12 schools, who never “caught fire” in high school (or whose fire was somehow extinguished) to have the chance to improve their lives?

Access to a college education is that chance.

Americans note with disapproval those countries that force all secondary students who aspire to attend college to take a qualifying exam, the outcome of which is determinative as to whether that student will progress to a well-paying job or be relegated to the ranks of the working poor. America is the land of opportunity! We believe in second chances! Everyone should have the right to a college education if they have the intelligence and the will to succeed!

But there remains the question of the cost of providing such opportunities.

Although places such as New York City and California experimented with free public higher education, it proved too expensive to be sustained. Our collective will to create additional capacity at colleges and universities waned as the tax bills arrived. Besides, we reasoned, since almost half the students who start college today don’t finish, surely that suggests that many college students shouldn’t have been in college in the first place. In fact, the argument goes, we would be better off with fewer college students, and we could do that by raising entrance standards and excluding those who are clearly not capable (or at least not ready now) of handling a college curriculum successfully.

The fallacy of this line of reasoning is that it assumes that our current educational paradigm, at all levels of education, is as good and as equitable as it possibly could be, so anyone failing to complete a particular level of education does so because of personal inadequacy (“poor learner”), not because of inferior or inadequate instruction.

This simple dichotomy ignores the reality that students are not automatons. Many people face crises while they are seeking an education: a family emergency to which they must devote their attention; food or housing insecurity; not enough money for child care, books, transportation or tuition; discrimination because of race, national origin, religion, gender or sexual orientation.

The point is: While it is convenient to blame the unsuccessful student for failing to be successful, much of the time that lack of success stems not from inferior intellect or a willingness to work hard but from limitations entirely beyond the ability of the student to control.

Moreover, if we are already educating as many people at the college level as are capable of learning at that level, how do we explain the fact that there are many countries in the world that are educating greater proportions of their citizenry than we are? (And be careful about suggesting that their educational standards are lower than ours.)

Is our country doing enough to create successful and equitable educational pathways for students, both at the K-12 and the college levels? How do we meet the economic needs of our country with our current model? Reducing the number of students in college will do nothing to resolve the problems business and industry have in finding a sufficient number of workers with the skills and abilities these businesses require.

Do we educate to meet social needs, or is it about personal development?

In a recent article, [3] Derek Bok, the former president of Harvard University, makes a persuasive argument for a dramatic increase in the production of college and university graduates. Mr. Bok proposes increasing institutional capacity and doubling the number of college graduates by pouring a great many more tax dollars into public institutions. Unfortunately, in today’s anti-tax world, that suggestion will surely fall on the deafest of ears.

And really what Mr. Bok’s proposal demonstrates is the utter futility of calls for action that are not truly directed at anyone in particular, that do not include a consideration of the steps that would need to be taken to achieve the results being called for, and that come from someone — and I say this with the greatest respect for Mr. Bok — who is not in a position to deliver any of the outcomes that he wishes to see (since he is no longer the president of a university).

Mr. Bok is by no means alone in this position. The Lumina Foundation, a foundation with considerable resources, has been calling for years for a significant increase in the production of college graduates (and would appear to have the opportunity to make investments in ideas that might well advance its agenda). And early in his first term, President Obama himself called for a near-doubling of the proportion of college graduates by 2026 (but he never made a strong push to create the political will to achieve this outcome).

Regrettably, we have seen only very modest gains in the percentage of American adults with a post-secondary degree (associate’s or bachelor’s) or high-value certificate over the past decade. We must conclude that calls for action, in and of themselves, have limited value in enhancing the level of higher education attained by adult Americans. We need a more comprehensive and inclusive campaign.

With that in mind, might there be ways by which we could make education more successful for more people, thereby lowering the cost per degree received? And if there are, shouldn’t we start using them?

We will examine these questions in upcoming postings to this blog site. First, however, let’s examine how well colleges and universities are doing with our current model of higher education.

Next week: Is there a disconnect between what America needs and what colleges actually do?

[1] “Mike Lee, Mia Love: It’s time to modernize higher education,” Deseret News, Dec. 15, 2017. (Mike Lee is the junior senator from Utah; Mia Love is a congresswoman from Utah. Together, they have introduced the HERO Act—Higher Education Reform Opportunity—in the Senate and House to “open doors to new education opportunities” that do not involve four-year degrees at traditional colleges and universities, but focus instead on massive online open courses—MOOCs—and certification exams that utilize “alternative accreditation paths.”)

[2] “Educational Attainment in the United States: 2015,” U.S. Census Bureau

[3] The Boston Globe, Sept. 9, 2017

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Can Higher Education Solve America’s Economic Crisis?

Part 3: The Relationship between a College Education and a Well-Paying Job; Reconciling a Liberal Arts Education with the Needs of Employers

Historically, the universities of medieval and Renaissance Europe, and the colleges of Colonial Age America, had almost nothing to do with preparing young men for the world of work. (There were almost no women in college until well into the 19th century). Rather, the universities served to introduce the next generation of society’s expected leaders to classic Greek and Roman writers and thinkers, and to sharpen their skills in grammar, logic and debate.

To be sure, some students became lawyers, doctors or theologians, but for the most part the traditional college or university education focused almost entirely on teaching people how to reason, analyze and communicate.

Things began to change after the Revolutionary War, with the establishment of the first public universities. But even these were relatively scarce until the Morrill Act of 1862 established land grant colleges that were specifically devoted to agriculture and engineering — applied fields in which the acquisition of certain skills and knowledge connected an area of study to a particular line of work.

No longer were college students limited to the sons of wealthy merchants and landowners. Some now prepared for jobs in industry (as the Industrial Age came into its own) — and some college students were women!

In 1870, Johns Hopkins University, established on the German model, introduced the idea that graduate education and research should be within the scope of what universities do. The resulting production of students at the graduate level provided the faculty needed to allow new colleges to be established, and to permit existing institutions to grow.

Even with these changes, however, most college students still majored in the liberal arts, and many colleges taught only the liberal arts (as some do to this day). Liberal arts colleges, and liberal arts faculty, continued to emphasize the non-economic purpose of higher education: to instill a love of learning, and a life of the mind, as one of society’s loftiest goals—and a goal that needed to be nurtured and protected.

However, by the beginning of the 20th century, it had occurred to business leaders that people who had attended college must be quite smart, and they began preferentially hiring college graduates. They hired them not necessarily for what they knew, but because they had demonstrated that they were bright and could learn and reason with ease. Businesses were content to train these young graduates in the specifics of what they needed to know to contribute to the business, recognizing that they learned quickly and were likely to stay with the company for their working lives.

Liberal arts faculty and liberal arts colleges looked askance at such blatant commercial use of the education they had provided to their students, but since neither the colleges nor the businesses asked anything more of the other, both were content to let matters run their course.

Increasing educational opportunity

With the passage of the GI Bill in 1944, and the work of the Truman Commission on Higher Education for American Democracy in 1946/47, the doors of colleges and universities were flung open to people from all walks of life. These new students from the working class were far more successful than many believed they would be, and higher education in America was forever changed. The percentage of adult Americans with a baccalaureate increased from 5 percent in 1945 to more than 30 percent today.

Growth in the economy allowed the ready absorption of newly minted college graduates into that economy, and growing numbers of college graduates in turn contributed to economic growth — a kind of virtuous circle, where supply and demand for college graduates stayed roughly in balance, even as the economy grew and the nation prospered.

What should be the focus of education?

But everything changed with the Great Recession that began in 2008.

Almost immediately, demand for newly minted college graduates plummeted, even as the production of graduates continued, throwing the balance between supply and demand out of equilibrium. Those few businesses that were hiring could limit their search to individuals not only with a college degree but also with relevant experience — something that the typical new college graduate did not possess.

Businesses promptly canceled their training programs for new employees because newly hired but experienced employees needed very little training. Almost overnight, new college graduates — especially in the liberal arts — found themselves with few job offers, and obliged to accept temporary or part-time jobs. The college graduate working as a coffee shop barista became the image etched in the minds of the parents of college-age young people everywhere, and they wondered aloud whether a college degree was still the ticket needed to join the middle class — or even whether a college degree was worth the price.

Conservative governors of several states openly challenged the notion that public (i.e., taxpayer-supported) institutions should engage in producing liberal arts graduates with no marketable skills (conveniently forgetting, of course, about the “soft skills” possessed by the typical liberal arts graduate, such as the ability to think, reason, synthesize, collaborate and communicate, among others). We need more STEM graduates! We need more graduates in the trades! Even President Obama questioned  the wisdom of students who elected to major in art history.

The liberal arts faculty pushed back hard. Hundreds of years of history were on their side. As I have noted, the traditional college education was never about preparing people for careers. Businesses chose to hire college graduates and then train them. Now, they were saying that businesses no longer wished (or needed) to shoulder the expenses of training, so the task of preparing students for the workplace must, by default, fall on the colleges.

In the intervening years, the job market has improved and more colleges have seen the virtue of students’ combining a liberal arts education with specific skills in one or more of the professional schools (and/or of gaining relevant experience while an undergraduate through internships or other examples of project-based learning). [1] So the tension between the wishes and expectations of the businesses and of the parents of college students on the one hand, and the liberal arts faculty on the other, has diminished — but not vanished.

Neither side has relinquished its position. We await only another recession for a resumption of hostilities.

In the meantime, here are two things to consider:

First, a powerful case can be made that the best reason for obtaining a college education today is because of the strong interrelationship among being well educated, getting a great job and living a great life. [2]

Thinking about a college education only in terms of how it prepares you for a job can cause you to undervalue the other factors in living a great life, as well as tempt you to try to “time” the market — that is, to choose a major based on the needs of the job market at the moment. The problem is that the job market is constantly changing and what is “hot” today might be ice cold tomorrow. Getting a good educational foundation on which additional education can be built as and when needed is the better strategy.

Second, lifetime earnings in different job sectors broadly overlap. Engineers generally have higher lifetime earnings that English majors, for example — but some English majors earn more than some engineers. The point is, median salary for a particular major does not tell you the range of salary for that major, nor does it predict the actual salary of any one individual. [3]

The takeaway is that college students should not abandon their commitment to an area of study that ignites their passions to make themselves into something they are not in hopes of a potentially bigger paycheck. Lifetime salaries by major are not chiseled in granite, and the future is too uncertain.

But failing to appreciate what employers are looking for in a new hire is an equally serious mistake. To repeat, the better response is to combine the strengths of professional study with the breadth that comes from the study of the liberal arts by balancing your major (primary interest) with a minor in a completely different area that extends your skill set. For example, majors in graphic design or dance may be very well served by taking a minor in marketing or management.

Graduates in professional fields tend to be hired quickly (assuming that their area is in demand when they graduate), whereas liberal arts graduates often drift from job to job for several years before getting on track. Liberal arts graduates with some defined professional skills, on the other hand, tend to get started on their careers more quickly, because those skills are attractive to employers — and their liberal arts skills allow them to be successful once hired, and to advance their careers.

Final point: The traditions of the academy should be respected, if only because their ultimate value is proven by virtue of their longevity. Only certain religions can claim a longer history than can the oldest of our universities (in marked contrast to the relatively rapid turnover of businesses and corporations, for example).

But it’s true that, as our society evolves, certain factors that support our society must evolve along with it. Higher education today plays a very different (and arguably much more important) role in supporting and strengthening our society than it did four centuries ago. And we in higher education should not be so in love with our traditions and history that we blind ourselves to the need for us to adapt to current demands and expectations of our society. Our challenge is not to reject these demands outright but to respond to them even as we honor the values and traditions that are the basis of what we do.

Next time: How many Americans should have a college degree — and how (and by whom) is that question answered?

[1] “From Liberal Arts to Making a Living,” The Chronicle of Higher Education, Oct. 22, 2017

[2] Great Jobs, Great Lives. Gallup Organization, 2015

[3] “Six Myths About Choosing a Major,” The New York Times Education Supplement, Nov. 5, 2017

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Can Higher Education Solve America’s Economic Crisis?

Part 2: Massive Tax Cuts or More Educated Workers? Which Is the Better Choice for a Broken Economy?

In late December 2017, the House of Representatives and the Senate, urged on by President Trump, approved a dramatic restructuring of the tax code. The primary goal of this restructuring was to reduce the tax burden on corporations to allow them to retain more of their earnings in the expectation (or, more correctly, the hope) that with more dollars in corporate pockets, some of those dollars would be spent creating new jobs for additional workers and/or augmenting the wages of current workers.

Grover Norquist, the founder and president of Americans for Tax Reform, claims that the proposed tax reform is in reality a jobs bill [1] — and since everyone favors adding jobs, everyone should support the bill. (Ironically, the six largest U.S. banks collectively eliminated 8,000 jobs just before the tax bill passed, despite the fact that banks were among the industries most favored by the tax cuts.) [2]

Even though the tax bill will result in a $1.4 trillion loss in tax revenue over the coming decade, the gamble is that the growth in the number of jobs and job-related income (annual increases in GDP of 4 percent or more each year) will provide such a boost to the economy that the growth in overall tax revenue will make up for the lost $1.4 trillion. (Not factored into the expectation of large GDP increases, however, are the plans of the Federal Reserve Bank to continue to raise interest rates to prevent inflation and an overheated economy. The Fed and Congress are effectively pulling on the same economic rope — but in opposite directions.) [3]

We can analyze whether a tax cut was the best possible economic stimulus that Washington had available to it by looking at the assumptions that form the basis of the tax reform legislation:

  1. Corporations today lack the financial ability to add jobs or to pay their workers higher wages. The primary reason for the “bull” stock market of the last eight years is that corporate America has been doing very well, on the whole, and earnings have typically met or exceeded analysts’ projections — and when that happens, the price of a share of stock rises, making investors very happy, further driving up share price. The Dow Jones Industrial Average has increased from about 6,500 in March 2009 to over 26,000 today — quadrupling in just over eight years. Corporate America is strong, and the companies that survived the Great Recession are generally far more robust today than they were in 2008. Corporations already have all the money they need to hire more workers.

 

  1. But it’s still the case that, at 35 percent, corporate tax rates are too high, much higher than in most of the nations with which we compete, and a lower rate (21 percent) would make corporate America more competitive. While it is true that our posted corporate tax rate is high, what the corporations actually pay averages just under 19 percent. [4] Stories abound of how major corporations, especially those doing business internationally, establish headquarters in offshore tax havens where earnings can be retained without being subject to the U.S. tax code. Other strategies that push against the boundaries of the law have the cumulative effect of dramatically reducing the actual tax bill for these corporations. The point is: Using the posted tax rate as the argument, rather than the rate of tax actually paid, gives a misleading impression of the tax burden American corporations really face. A reduction in the posted rate should have been accompanied by a comprehensive reform of the various techniques and loopholes now used by corporations to avoid paying anything close to the posted tax rate.

 

  1. But what about all those new jobs that will be created? The underlying assumption of the tax bill is that a dramatic reduction in taxes will allow corporate America to hire many more employees and pay them well, but as I noted earlier this outcome is more correctly characterized as a hope than an expectation. We have been hearing for some time that corporate America cannot find skilled and experienced workers. The demand for workers exists now, but the supply of those workers is insufficient to meet that demand [5]. Giving corporations more money to hire more employees won’t work if the prospective employees don’t exist. Moreover, for corporations, their workforce represents an expense — and corporations are very cost-conscious. Every dollar not spent on salaries is a dollar that can be put into stock dividends, or used for corporate stock buybacks, a strategy that increases the price per share — both outcomes that are much appreciated by shareholders. (Increases in share price also help corporate leaders meet the provisions of their employment contracts, resulting in their being granted bigger bonuses.) Of course, in theory they could just give their workers that money, as a sign of corporate benevolence. Unfortunately, when the interests of the workers are pitted against the interests of the owners, the owners almost always win — and the migration of money from labor to capital over the past three decades has been a primary contributor to the growth America has seen in income inequality. In short, the idea that corporate tax reduction will result in higher wages or more jobs is fanciful, and not supported by any evidence.

So is there an alternative approach to enhancing the economy?

As we noted in Part 1 of this series of essays, there is a huge imbalance in the job market — and it is expected to continue and possibly worsen — between the collective skills and abilities actually possessed today by American workers, and the skills and abilities employers say they need for the jobs they currently have available. A recent report from Georgetown University’s Center on Education and the Workforce [6] showed that, of all the jobs created since the beginning of the Great Recession, fully 73 percent required at least a bachelor’s degree — twice the actual percentage of college graduates now in the workforce. Consequently, huge numbers of people are eligible only for the small number of jobs that require limited skills, and since those jobs are not abundant, employers see no need to pay generously — and that’s why the inflation-adjusted income of people in the bottom quintile of family income has actually declined in recent years.

Conversely, there is abundant demand — and often a shortage in supply — for many jobs requiring specialized skills, which is why the inflation-adjusted income of people in the top quintile of family income has increased significantly as the Great Recession has faded into memory.

The solution seems obvious: More people need more education to rebalance supply and demand between workers and employers.

A greater supply of skilled workers — workers prepared for the jobs of today and tomorrow, not the jobs of yesterday — will allow corporate America to grow their businesses, and that, in turn, will enhance the American economy even as it improves median income. Similarly, fewer people seeking low-skill jobs will put pressure on employers to increase salary levels for those positions, in order to attract and keep these workers. That outcome will also improve median income and possibly bring some of the workers who have sidelined themselves, convinced they could never find a decent job, back into the job market, an outcome that would benefit everyone.

How might that outcome be achieved?

A report from the American Academy of Arts and Sciences [7] offers an intriguing possibility. The report provides two models stemming from a proposed federal investment designed to improve college graduation rates. The optimistic model assumes that an increase in higher education spending to 125 percent of current levels would raise current graduation rates by about 50 percent. The pessimistic model assumes that spending might have to be at 150 percent of current levels to achieve that outcome.

The models are complex, and the report runs for 35 pages. But in sum, an investment that is less than the $1.4 trillion cost of the tax cut, spread over the next 20 years, would begin to show net positive revenues around 2042, and these numbers would become increasingly positive thereafter. By 2046, the share of the adult population with at least a bachelor’s degree would rise from 32 percent to 46 percent; unemployment rates would fall by another half percent; earnings would increase by more than 3 percent; and the gross domestic product would be 2.5 percent higher than if we did nothing at all.

Sadly, this alternative economic stimulus was never considered in Washington. The tax cut would happen immediately, while the higher education investment would require a much longer time horizon — well outside the election-cycle thinking that seems to determine almost all of Washington’s actions.

But if the American people had been given a choice for improving the American economy between a gamble that reducing the corporate tax burden might, through corporate largesse, find its way into the pockets of workers and indirectly create more jobs — or directly investing in higher education institutions to increase their capacity and create more of the workers corporate America says it needs, thereby empowering the workers themselves — I would have supported choice No. 2.

Corporations or people? A gamble or an investment? Why can’t we do a better job as a nation of making the right choice? Why won’t our political leaders even give us a choice?

Next time: The role of higher education in preparing America’s workforce.

[1] “Anti-tax advocate defends GOP cuts,” Providence Journal, November 11, 2017

[2] “Big U.S. banks slashed 8,000 more jobs before tax-cut windfall,” Providence Business News, January 18, 2018

[3] “Fed Expects Tax Cut to Give Economy ‘a Modest Lift,’” The New York Times, December 14, 2017

[4] “The Right Way to Cut Corporate Taxes,” The New York Times, November 13, 2017

[5] “In Trump Country, College Is a Leaky Lifeboat,” The Chronicle of Higher Education, March 3, 2017

[6] “America’s Divided Recovery: College Haves and Have-Nots” 2016

[7] “The Economic Impact of Increasing College Completion” 2017

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Can Higher Education Solve America’s Economic Crisis?

(And if It Can, Then Why Does America Still Have an Economic Crisis?)

Many of America’s most serious problems are linked to the state of its economy. Consider: income inequality has been increasing for the past three decades; too many of today’s jobs pay far less than did the jobs that disappeared during the Great Recession; most family incomes are flat or declining, leading to a sense of economic deprivation that promotes depression, family strife, and alcohol and drug abuse. The stridency and deep political divisions we have seen in recent years owe, at least in part, to the seemingly irreconcilable differences of opinion regarding the right path forward for our nation, specifically whether that path should consist of more, or fewer, hands-on programs by the federal government aimed at strengthening the economy.

The thesis underlying this collection of eight essays is that our country’s economic problems are solvable, that the malaise in which we find ourselves today need not be permanent, and that the driver of the new economy, the change agent that we need to employ, is higher education — but not higher education as we have traditionally known it. Rather, we need to think about creating public-private partnerships on a far larger scale, with institutions of higher education working with business, industry, and non-governmental organizations (NGOs) on the one hand, and local, state, and federal governments on the other, to develop shared expectations of outcomes in which all of the partners are winners. The highly disaggregated and inequitable system of higher education practices we have today, wobbling precariously on a flimsy base of tradition and complacency, must be replaced with something far more integrated, one grounded on a solid foundation of evidence, and with a clear and realizable purpose.

But I’m getting ahead of myself. Let’s begin at the beginning.

Part 1: 

What Are the Factors Creating Our Economic Crisis? Analyzing Opposing Opinions and Reconciling Contradictory Conclusions

Is America still in crisis economically? Or have we now recovered from the hangover of the Great Recession?

In a world where contrary information is promptly labeled as “alternative facts” or “fake news,” it is difficult to identify a common data set on which all can agree — and, absent such an agreement, it is impossible to answer those questions, let alone to develop a consensus path forward. But at least some of the confusion can be eliminated by a careful analysis of what is being said. The old adage of the blind men describing an elephant is useful to us here.

Employment is up/workforce participation is down

Both statements are true.

In 2016, the United States added 2.2 million new jobs, and 1.4 million additional jobs were added in the first eight months of 2017.[1] The unemployment rate has fallen markedly over the last eight years, and now stands at 4.1 percent, the lowest rate of unemployment since 2001[2]. But the percentage of people of working age who are actually employed has fallen dramatically since the Great Recession, and this drop is especially acute for those with no college degree. Among men aged 25 – 54, 94.5 per cent were employed in 1980, but only 88.5 percent are employed today.[3] This is one of the lowest percentages among economically developed countries. The comparable figure in Japan today, for example, is 95.5 percent. So we have the apparent paradox of a low level of unemployment coupled with a historically low percentage of employed people.

And the problem is not just that there are many more people of employment age who are not working today, as compared to 2008. One-third of these non-working people are receiving disability payments, and an equal number are estimated to be using prescription pain medications, most of which are opioids.[4] The absence of a job detracts significantly from the quality of life for these people, and burdens society with Medicaid and welfare costs much higher than they were a decade or two ago — and the inability of prospective workers to pass drug tests keeps them unemployed[5].

Incomes are rising/incomes are stagnant

Both statements are true.

In inflation-adjusted dollars, median individual income peaked in 1973. Median family income, because women continued to join the workforce, did not peak until 1997—but since then, the percentage of women in the workforce has declined, as increasing numbers of women of working age have left the workforce to care for aging family members.[6]  In the last two years, the median family income has increased by 3.2 percent, to $59,059, but is still 2.4 percent lower than in 1999, and 1.6 percent lower than in 2007.[7]

But it is also true that median income does not capture the full story. Incomes have actually fallen for much of the workforce — notably, those toward the bottom of the income scale — even as they have risen, often dramatically, for those near the top of the scale. For example, over the past decade, and measured in inflation-adjusted dollars, median household income has fallen by $571 for families in the bottom quintile of income, and risen by $13,479 for families in the top quintile.[8] Moreover, the traditional bell curve of incomes, in which most workers were near the middle of the range, has inverted such that incomes are clustered toward the ends of the curve, with far fewer workers in the mid-range.

So some workers have seen a significant increase in earnings in recent years, even as others have waited in vain for salary increases, or have been forced to accept jobs paying significantly less than their pre-Great Recession jobs.

Whether incomes are seen as improving or not is very much an individual perspective.

The economy is barely growing/the economy continues to improve

National economic growth is measured quarterly, and is always subject to subsequent revision as more comprehensive data later become available. Thus, it is not unusual to see a particular figure announced (to widespread gloom or fanfare, depending on the number), only to see that figure adjusted upward or downward months later.

The point is, making statements about the state of the economy based on the latest quarterly number is risky and ultimately not particularly helpful. (For example, quarterly increases over the past eight quarters have ranged from 0.2 percent to 3.1 percent.[9]) On the other hand, historic data over many quarters reveal a much more useful picture of how well the economy has been doing. As measured in that way, the growth of the American economy over the past decade has been tepid at best (only five of the 52 quarters in the past 13 years grew at 4 percent or better[10]), and growth has not yet returned to levels typically seen following the end of a recession.

The takeaway is that our economy has fundamentally changed since the Great Recession of 2008, because the nature of the jobs available has changed. Low-skill, service jobs have proliferated, but they pay poorly. (For example, the Bureau of Labor Statistics estimates that there will be 4-million new jobs in health care over the next decade, and more than 400,000 of those jobs will be for home health aides — but the median salary of home health aides, a job requiring only a high school diploma, is just $22,600.[11]) Certain well-paying high-skill jobs will continue to be abundant — but millions of mid-level jobs in the trades and especially in manufacturing have disappeared, and are not coming back.

The economy is divided into haves and have-nots — and there are far too many of the latter for our economy to be called “robust.” Too many Americans are living at or near poverty levels, a circumstance that should not be acceptable to anyone who cares about the quality of life of the American people. For these unemployed or underemployed members of our society, the economy is still very much in crisis. Our collective challenge is to prepare workers for the jobs of today and tomorrow, rather than waiting in vain for yesterday’s jobs to return.

America needs a change in the status quo, in terms of educational attainment levels, and Americans cannot assume that our current educational models are up for the task. (If they were, we wouldn’t be still having the problem of far too many marginally employed people.) And all Americans must collectively own this responsibility, rather than idly standing by, waiting for someone else to assume it for us.

How might this task best be accomplished? Next week: Tax cuts or education stimulus?

[1] “Incomes Jump, Adding Twist To Tax Battle,” The New York Times, September 13, 2017

[2] “Yellen’s Legacy: Progress, But a Sense of a Job Unfinished,” The New York Times, November 3, 2017

[3] “Labor Shortage Gives Workers an Edge,” The New York Times, September 20, 2017

[4] Ibid.

[5] “Workers Needed, but Drug Testing Takes a Toll,” The New York Times, July 25, 2017

[6] “The Weight of Elder Care on Women,” The New York Times, December 20, 2017

[7] “Incomes Jump, Adding Twist to Tax Battle,” The New York Times, September 13, 2017

[8] Ibid.

[9] “Economy’s 3% Spurt Emboldens Tax Cut Supports (and Critics),” The New York Times, October 28, 2017

[10] Ibid.

[11] “Without changes in education, the future of work will leave more people behind,” The Hechinger Report, October 31, 2017

 

 

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Is the Role of Higher Education to be Inclusive or Exclusive?

(Extended version of my essay in The Providence Journal, Aug. 10, 2017)

The United States is on a collision course with disaster. Unless we change our current model of higher education, our country will never have the educated workforce it needs to support and grow its economy.

A 2016 report from Georgetown University’s Center on Education and the Workforce found that, of the 11.6 million new jobs created since the beginning of the Great Recession, 8.3 million (73 percent) required a four-year degree — powerful evidence that we are continuing the transition from a manufacturing to a knowledge-based economy. Yet a 2017 report from the Lumina Foundation showed that only about 32 percent of American adults have a four-year or graduate degree — a percentage that has changed little in the past decade. In the absence of a sufficient supply of college graduates, how can American business and industry grow? And if American business and industry does not grow, how can the American economy expand?

Don’t assume that the law of supply and demand will take care of this problem. That’s not the appropriate model when it comes to higher education because, overwhelmingly, individual institutions of higher education are focused more on maintaining, and if possible enhancing, their own reputation than they are on producing more graduates. In other words, their obsession with quality (often equated with ranking) eclipses society’s need for quantity — a statement supported by findings from a just-released New America survey of 1,600 American adults (“Varying Degrees”).

This obsession manifests itself in two distinct ways, both of which hurt the American economy. First, almost all four-year colleges and universities seek to admit the very best high school graduates they are able to recruit — with “best” being those with the highest GPAs and test scores, ideally from high schools with reputations for being strong academically. Because the publications that rank colleges and universities use, as one criterion, the percentage of college freshmen at a given college who are in the top 10 percent, or 25 percent, of their high school graduating class, these are the students most in demand. But if the American economy needs 70 percent of its workers with a four-year degree, which are the colleges willing to take students from the bottom half of their high school class? The answer is that these students have few college options and, for the most part, those options are unattractive. Colleges prove their worth and enhance their reputations by being exclusive — not inclusive.

Second, the emphasis on “quality” creates a grading system that ensures some number of college students must fall short of an instructor’s expectations, and falling short in enough courses causes the student to leave without graduating. The four-year graduation rate of less selective colleges is often below 20 percent — just one in five receives the degree on time, and the six-year graduation rate is commonly below 40 percent.

How can this model be changed to meet today’s societal needs? Here are three answers:

  1. Colleges and universities must dramatically increase their graduation rates. It is unconscionable that there are institutions graduating less than 20 percent of the freshmen they admitted four years earlier. These low graduation rates are a national disgrace, and the American public should demand better. As a nation, we literally cannot afford to have half of each entering class of students failing to graduate within six years (“half” being the national average graduation rate across all higher education sectors). What other business or industry could survive if half of its input never made it out the door as marketable product?

Too many institutions of higher education continue to miss the point of their mandate. A college education should not be seen as the civilian equivalent of Army Ranger School, where a majority of would-be Rangers are expected to wash out. Colleges choose who they admit — and by choosing in this way, they establish what might be seen as a quasi-contractual relationship with their students to do everything in their power to help them achieve their educational aims. Instead, too many institutions still act more as judges than as advocates; more as inquisitors than mentors; more as auditors than as teachers. And when students fall short of expectations, the conclusion is that they are poor learners, not that the institution is doing a poor job of teaching.

The response to these criticisms is, of course, predictable. “Gasp! You would have us lower our standards of quality in order to give students outcomes they neither earned nor deserve!” To which I respond: Nonsense! We can provide far more guidance and assistance to students without in any way compromising the expectations we have of what and how they learn. We can enliven in-class and out-of-class instruction to make learning far more interesting. We can move away from counting the hours a student must spend in a classroom to earn three credits, and move towards a direct assessment of the learning outcomes we have for the course. These changes are all within our reach and ability, yet for the most part we ignore them — because there is not yet sufficient pressure and expectation for us to change the standard model.

Suppose the regional accreditors (or the federal government) set an outcome standard of, say, 75 percent graduation in four years of all full-time students (those taking 15 or more credits each semester). Institutions failing to meet that standard would be placed on probation by their accreditors or lose some portion of federal funding. Does anyone seriously believe that we would not immediately see far greater attention being paid to successful student learning? Why should it take the threat of penalties to motivate colleges and universities to do a better job of graduating their students?

  1. Lower income students must be given significantly greater opportunity and support. Institutions of higher learning do a respectable job with students from the top quarter of family income, many of whom have college-educated parents, and almost all of whom are the product of quite good K-12 school systems. About 77 percent of students in this income bracket will ultimately earn a four-year degree.

However, colleges and universities have had much less success with students from the bottom quarter of family income, only 9 percent of whom will earn a four-year degree. If the United States is to see a significant increase in the percentage of adults with a four-year degree, we must work to make students from the bottom quarter of family income more successful.

Creating greater access and better educational outcomes for low-income students is not an insurmountable problem; we’re just choosing not to address it.

Many of these students did not attend high quality K-12 schools; most will be first-generation college students; they may or may not receive moral support from their families; they are generally unfamiliar with how colleges operate, and often feel out-of-place trying to navigate an unfamiliar landscape. By providing them with educational “coaches” — individuals dedicated to helping them in every facet of their lives — a few institutions have seen dramatic increases in retention and graduation. This model should be the norm, not the exception.

And we have to stop punishing people just for being poor. Low-income families tend to live in areas where the K-12 school system is often terrible; where the neighborhood is often dangerous; where families routinely confront food and housing insecurity, and move frequently, often disrupting the children’s education. Then, when the children finish high school, too often their only educational option is a community college, where funding on a per-student basis is far lower than at state colleges and universities, to say nothing of most non-profit private institutions. And we wonder why low-income students are one-eighth as likely to earn a four-year degree as are high-income students, who overwhelmingly attend colleges and universities that are far better funded on a per-student basis?

Why does our society find it in any way acceptable to provide the most financial support for those who need it least (students from the top quarter of family incomes), and to provide the least financial support for those who need it most (students from the bottom quarter of family incomes)?

  1. A new educational model is needed for working adults who require additional skills, or who want to complete their undergraduate degree. There are literally millions of American adults who have more than a high school diploma, but less than a four-year degree. Virtually all of them would be economically better off with a four-year degree, and surveys find that about 75 percent of them would very much like to have a four-year degree. But the opportunity to do so is just not available.

The traditional model for a college degree requires four years of full-time study, typically in residence. This model is all but useless for a working adult who cannot give up employment to attend college, and whose time is limited by job and family responsibilities. Not-for-profit higher education has been painfully slow to respond to this need, a fact that provided the opportunity for for-profit institutions to enter the market and develop what can most charitably be described as a “mixed” record.

America’s need for a far better-educated workforce cannot be met simply by enrolling more high school graduates. We must also develop new methodologies to serve working adults, who neither need nor want a “seat time” education (that is, one based on the input of how many hours a person spends in a lecture hall to earn a college credit). Rather, they need to earn credits based on the output of academic competencies achieved. This model is moving with glacial slowness in the world of traditional higher education; change has to happen far more quickly, in order that the educational needs of millions of adult Americans can be met, and in order that we can create the larger pool of college-educated workers that our economy so desperately needs.

Accomplishing even one of these three changes will be challenging. Achieving all three may seem impossible. Yet while there is a real sense of urgency on the part of both the American public and the American economy, it is not necessary that all of higher education responds overnight. It is enough that some institutions, public or private, decide that there are certain actions that they can take that will address these three changes. And they can do so while still protecting their ranking:

  • Programs for adults can be developed in such a way that they will not interfere with the current college ranking system, which is based on measures relating only to first-time, full-time freshmen.
  • Working to increase graduation rates will help an institution’s ranking, because graduation rate is an important criterion in the ranking process.
  • Creating access for low-income students, on the other hand, may affect an institution’s ranking (because these students generally score lower on standardized tests and on high school GPA), but these institutions will have to ask themselves whether they exist solely for the purpose of establishing a high ranking for themselves, or whether their more fundamental purpose is to meet the needs American society has of them.

As even a few institutions respond to one or more of these needs, they will demonstrate that so much of what we think of as being fundamental and ingrained in higher education is, in fact, a product of the model we are using — and that model can be changed. Indeed, it must be changed, if America’s economic strength is not to be undermined in the coming decades by an educationally ill-prepared workforce. Higher education needs to hold itself accountable in ensuring that this gloomy forecast does not actually occur. And the first step in being accountable is to adopt inclusivity — not exclusivity — as higher education’s watchword.

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A Recommendation to Jeff Bezos to Award Transformative Philanthropic Gifts to Colleges

(My essay in Inside Higher Ed, July 2017)

On June 15, The New York Times published an interview with Jeff Bezos, the founder of Amazon, in which he was asked about his philanthropic interests, now that his net worth exceeds an estimated $80 billion. His philanthropic giving to date has been modest by the standards of many other multibillionaires.

Bezos responded, “If you have any ideas, just reply to this tweet …”

Within a day, Bezos had received more than 18,000 replies. No doubt the flood of tweets will continue unabated for days to come. Yet it’s very difficult to compress a good idea into the 140-character limit of a tweet.

With that in mind, I offer my own suggestion.

Dear Mr. Bezos,

You indicated to The New York Times that, when it comes to philanthropy, you are interested in making investments that are “at the intersection of urgent need and lasting impact.” I have a suggestion that I think would do just that. But first, let me set the table for you.

In 1992, Henry M. Rowan Jr., an industrialist living in southern New Jersey, did something literally unprecedented: he gave $100 million, virtually all of which was unrestricted, to a local public institution, Glassboro State College. He had no particular history with that institution, but it was the only four-year college near his business offices. It was, at the time, the largest gift ever given to a public institution — and Glassboro State College then had an endowment of less than $1 million. In recognition of this gift (and not, as some people have speculated, because it was a condition of the gift), Glassboro State College changed its name to Rowan University.

Rowan was rolling the dice with an enormous bet. He was betting that a gift of this size could be transformational for Glassboro State. He was a graduate of the Massachusetts Institute of Technology, and that institution was soliciting a major gift from him. But he decided that MIT was already so rich that even $100 million would do little to effect a transformation there, and he wanted his gift to have an impact.

Rowan’s gift was paid in installments over 10 years, and I had the good fortune to be hired as president of Rowan University in 1998 to move the university “to the next level” — a concept that was not specifically defined but was assumed to mean making the university better, stronger and more recognized.

The gift was intended to be an endowment, with some of the investment earnings available for spending every year. But the sheer size of the gift allowed us to leverage it in the market for purposes of borrowing funds to improve the campus. We built engineering, science and education buildings. We renovated many of the existing buildings and improved landscaping. We constructed a town house complex to increase student housing. We acquired 600 acres of land near the campus for future expansion and the construction of a technology park.

Over a 10-year period, working with the town of Glassboro, we constructed campus-related buildings (residence halls, a hotel, a bookstore and a parking garage) on city-owned land adjacent to the campus, and to benefit the town, we orchestrated a public-private partnership to ensure the new buildings would be taxable at normal rates. Most of them included shops and restaurants on the ground floors, as a way of attracting the local populace to the area.

The campus grew in size and reputation, and shortly before I left in 2011, we built the first new medical school in New Jersey in 40 years. The work continues under my successor, with an intention of growing the student body from 8,000 in 1998 to 25,000 by 2025. (It’s more than 17,000 today.)

Rowan died two years ago, but he lived long enough to see his legacy in full bloom. His gift was every bit as transformational as he had hoped. He was a tough businessman, but when he spoke of the university that bore his name, his eyes filled with tears, and on more than one occasion he told me, “That was the best money I ever spent.”

Some cynics speculated at the outset that the university would never receive another gift, since any gift would pale in comparison to Rowan’s gift. To the contrary, philanthropists reasoned that a university that could attract a gift of $100 million must certainly be worth their much smaller investments, and over the subsequent decade, we received more than a dozen gifts of $1 million or more, with one gift of $10 million. Success breeds success — and large philanthropic investments attract other philanthropic investments.

The Rowan story is gradually becoming better known. For instance, it was featured in a Malcolm Gladwell podcast last year as an example of how philanthropists should be investing in colleges where their gifts will have meaning and impact, as opposed merely to swelling the bank vaults of well-known institutions that are already fabulously wealthy.

So, Mr. Bezos, here is my suggestion for a philanthropic investment.

  • Transform 10 colleges or universities each year for 10 years by awarding them an unrestricted endowment gift of $100 million. That’s $1 billion annually for 10 years.
  • Any public or private four-year, nonprofit institution with an endowment of less than $100 million would be eligible to apply.
  • An anonymous panel of experts whom you select would review the applications each year and select the 10 that promise to be the most transformational, affect the largest number of students and have the greatest societal impact. The specific criteria for evaluation would be yours to state, and those criteria may well change over the 10-year history of the plan.
  • As a condition of the gift, each recipient institution would be obliged to prepare an annual report, for 10 years, documenting their success (or failure) in achieving the goals they stated in their initial proposal. Those reports would be public, so that everyone could see the ways in which the colleges and universities were being transformed by virtue of winning a Bezos grant.

Mr. Bezos, this proposal, if funded, will positively impact the lives of hundreds of thousands of students every year — forever. But more important, if something like this does not happen, our country will continue to see a major shortfall of college graduates relative to our economic needs, and that shortfall will occur largely among would-be first-generation students, many of whom are members of ethnic and racial minorities.

There are many worthy philanthropic investments that you might make. But the economic future of our country depends on doubling the percentage of American adults with a four-year degree. A study last year by the Georgetown Center on Education and the Workforce showed than 73 percent of all jobs created since the Great Recession required at least a baccalaureate, and only 36 percent of adult Americans currently have that level of education. The current system of higher education will never get us to where we need to be, but philanthropists such as you can show us the way.

Respectfully,

Donald J. Farish, president
Roger Williams University