Higher Education and the American Workforce

By Holiday Hart McKiernan    //    Volume 20,  Number 3   //    May/June 2012

Education is how to make sure we’ve got a workforce that’s productive and competitive.

—President George W. Bush

Education is an economic issue when nearly eight in 10 new jobs will require workforce training or higher education by the end of this decade. Education is an economic issue when we know beyond a shadow of a doubt that countries that out-educate us today will outcompete us tomorrow.

—President Barack Obama

Without college-level learning, American workers simply won’t have the knowledge and skills they need to succeed in today’s global economy. Our country’s long-term economic recovery will rely on getting a greater number of high-quality degrees into the hands of a larger, more diverse pool of graduates. College and university governing boards that not only focus on traditional fiduciary responsibilities, but also drive for major improvements in higher education, will lead the way in a movement the nation cannot afford to postpone.

Our goal at Lumina Foundation is to ensure that, by 2025, 60 percent of working-age people in the United States have earned high-quality postsecondary degrees or credentials. A growing number of countries have college-attainment rates that surpass that of the United States. Given that only about 40 percent of working-age adults in this nation have degrees, we are committed to enrolling and graduating more students from college. We, like so many people in higher education, are especially concerned with the success of low-income students, students of color, first-generation students, and adult learners.

Those who enroll in college today run the gamut—racially, ethnically, and socially. They are recent high-school graduates and second-career retirees. They are full-time resident students, part-time distance learners, GED completers, certificate seekers, evening MBA students, and many others. The postsecondary institutions charged with educating 21stcentury students are also diverse: They are independent and public, for-profit and nonprofit, small and large, two- and fouryear institutions. Yet many students do not obtain their degrees, in part because colleges and universities frequently remain anchored to a way of doing business that is similar to how higher education operated in the 19th century.

Many institutions, for example, focus on measuring the number of hours spent in seats as opposed to the learning and workforce-relevant skills gained while in those seats. Most federal and state support for higher education institutions is based on the headcount of the students brought in the door, not those who walk out with a quality degree. Even given the diversity of institutions and their missions, most colleges and universities—especially public universities, which enroll more than 70 percent of all students—are rewarded and funded based on how many students enroll rather than how many graduate.

Serving the needs of diverse students and increasing their graduation rates will require significant changes in higher education’s systems, attitudes, and administrative practices. And governing boards are distinctly positioned to champion those changes. As Terrence MacTaggart notes in Leading Change: How Boards and Presidents Build Exceptional Academic Institutions (AGB Press, 2011), “To be sure, leadership from federal and state governments, as well as college and university presidents, is essential…. But boards, which hold ultimate responsibility for delivering educational value, should not sit idly by while their institutions and the nation’s human capital diminish in comparison to our global competitors.”

A More Expansive Fiduciary Responsibility

In the face of continuing economic challenges and growing societal needs, a more expansive sense of the board’s fiduciary responsibility is emerging. Boards have long been charged with ensuring that institutions invest in good business practices. Now, however, given the need to increase student attainment, boards must think more creatively about what that means—they cannot focus on stewarding assets exclusively from a traditional legal and compliance frame of reference.

Boards are recognizing that higher education is facing unprecedented challenges as it wrestles with maintaining quality without increasing costs at a time when fewer resources are available. Not every institution’s mission is the same, and some must focus more than others on the goal of helping more students—who enroll with differing levels of preparation for college-level work—complete their degrees at a lower cost. But no institution is sheltered from the current harsh economic realities.

Flagging financial support for higher education, and the persistent economic crisis that perpetuates it, creates true chal challenges for institutions and their boards. It is simply too expensive to scale the current system to meet the country’s needs. According to the National Center for Higher Education Management Systems (NCHEMS), it could cost as much as $33 billion in some combination of new state appropriations or tuition increases for the nation to reach 60 percent attainment by 2025. But, at the very time that institutions are being called upon to increase enrollments and graduation rates, they are experiencing significant cutbacks in state appropriations and public resistance to higher tuitions.

Moreover, to measure student success, institutions often focus on the characteristics of incoming students—input measures—as opposed to analyzing the evidence of persistence, completion, and the actual learning that their graduates demonstrate. As a result, boards do not have data that help them evaluate the results of the investments being made at their institutions.

Yet many boards are concerned about the urgent need to increase retention and completion, and they are willing and eager to consider how to deliver highquality education more effectively and efficiently. A recent Lumina study conducted by Public Agenda, a non-partisan research organization, concluded that boards are ready for new approaches and new solutions to the challenges that the institutions they steward are facing.

21st-Century Solutions for 21st-Century Students

What, specifically, can and should boards do? Boards can help make higher education more productive by focusing on how to capture efficiencies, deliver instruction in new ways, and work smarter—without compromising the quality of the degrees and credentials they offer. As Lumina’s “Four Steps to Finishing First” report notes, boards can work with presidents, other top administrators, and professors to help answer the following four questions:

How can our institution target financial incentives to support graduating more students with high-quality degrees? Colleges and universities can increase the likelihood that students will complete their degrees by providing more structure and fewer options in the courses students must take to graduate, by clearly delineating the pathway for completion, and by providing more-proactive academic advising that helps signal when interventions are needed. Initiatives to improve graduation rates by limiting course options and building structured pathways to completion can cut the average cost for a degree by 11 percent, according to NCHEMS. Providing advisory programs that help students navigate early and effectively through clear educationto- career pathways can cut costs by one-third.

It is helpful to look to concrete examples for guidance. In Ohio, Indiana, and Tennessee, for example, leadership is testing performancefunding formulas, allocating resources based on a variety of indicators including completion rates, time to completion, and production of degrees aligned to areas of high need for the state workforce. Institutions can take a similarly hard look at how they allocate resources within the institution to high-performing programs. It is up to each college or university to define “performance” according to its mission and capacity. It is also up to them to think through the clearest pathways to a quality degree and provide the resources necessary to support it. But there is no reason that all institutions can’t reconsider the array and number of core requirements, the advising structure, and the institutional-aid policies they offer in order to help students make informed choices as they work toward their degrees.

How can our institution use tuition and financial aid to incentivize students to complete their course work on time? Research has shown that financial incentives make a big difference in moving some students toward graduation. Texas gives a $1,000 tuition rebate to students who take no more than three credit hours beyond the minimum number to complete their degrees. Florida significantly reduced dropped courses by requiring students in a special scholarship to refund the money if they withdrew after the drop/add deadline.

Some institutions are also exploring using off-peak tuition pricing to encourage use of building space in the evenings and on weekends. Community colleges, especially, have found this model appealing. Meanwhile, some large systems like the State University of New York have been experimenting for a number of years with offering reduced tuition and credithour costs to students who attend on nights and weekends.

What can be done to implement low-cost, high-quality delivery approaches? Redesigning academic courses and delivery modes can improve an institution’s average degree productivity between 17 and 26 percent, according to the report “Winning by Degrees,” published by McKinsey & Company. Working under a plan that the Maryland State System adopted based on the National Center for Academic Transformation course-redesign model, Towson University redesigned a remedial math course for students and increased the pass rate by 17 percentage points. In Arizona, more than 11,000 students pursue lower-cost educational options through accelerated and online degree programs. Open-learning courses at a variety of institutions have been shown to not only reduce the cost of instruction but also to increase learning.

What business efficiencies can be achieved through joint purchasing, back-office consolidation, and other similar approaches? Looking first at the efficiencies to be gained in nonacademic operations can be an effective strategy to get faculty support for change. Instituting such administrative efficiencies in payroll, purchasing, and other functions can make more money available to students. Institutions should reach beyond higher education or even state borders to partner with K–12 school districts, government agencies, and quasi-public entities to achieve economies of scale and scope.

Some of the most notable efforts have been in Ohio. Beginning with the University of Akron and the Lorain County Community College campuses (serving a total of over 30,000 students), Ohio has worked across institutional systems to consolidate services including payroll processing and research support.

Consolidating services or even creating new centers to offer centralized administrative support is not without challenges. Regulatory and funding structures, diverse administrative needs across institutional type, and differing university system cultures are just a few of the potential barriers. But the thought process set in motion by simply asking, “How can we do this differently or better? How might that impact student experience and outcomes?” is incredibly valuable and, in today’s economic environment, vital.

In addition, while certainly not an easy task, boards can lead a thoughtful dialogue with administrators and faculty members about student-faculty ratios and strategic utilization of the instructional workforce. As reported in “Navigating the ‘New Normal,’ ” a report based on a Lumina National Productivity Conference last year, NCHEMS has determined that “increasing student-faculty ratios by 10 percent nationally would reduce costs by almost $10 billion over the next 15 years—covering almost a third of the investment needed to meet the 60 percent attainment goal by 2025.”

Questions for Boards to Ask About Educational Quality at Their Institutions

  • How does this institution define educational quality?
  • Does the institution say what and how much students should learn? Where is this said?
  • What kinds of evidence does the institution collect about student learning?
  • Is the institution benchmarking performance against external standards as well as tracking institutional performance over time?
  • How are assessment results used?
  • What do students and alumni say about the quality of their educational experience?
  • How do the institution’s retention and graduation rates look over time, and how do they compare to those of other institutions?
  • What does success look like for the types of students enrolled at this institution?
  • Does the institution define college readiness—that is, the skills and knowledge that students need to be successful at the institution?

—From “Statement on Board Responsibility for the Oversight of Educational Quality” (AGB 2010)

Learning for an Educated Workforce

In their fiduciary role, boards should ensure that students not only gain college degrees and certificates, but that they actu- ally learn what they need along the way to become productive and skilled workers who can contribute to the American economy and a democratic society. A recent Gallup/ Lumina Foundation survey found that most Americans think getting a college degree is crucial to their economic well-being, but they question whether colleges are able to deliver job-relevant learning. Thus, beyond college completion, they must be concerned about learning outcomes.

A college or university board must lead the way in reframing the conversation for its own institution and, by extension, the national dialogue about producing more high-quality degrees. As the Association of Governing Boards’ “Statement on Board Responsibility for the Oversight of Educational Quality” notes, “[a governing] board broadly defines the educational mission of the institution, determines generally the types of academic programs the institution shall offer to students, and is ultimately accountable for the quality of the learning experience.”

The board should charge the president and chief academic officer with ensuring that student learning is assessed and the data shared with the board and all involved constituents. According to AGB’s statement, a board should know how assessment is conducted at its college or university, what the academic goals are, and how the institution is performing against such goals. A committee of the board, like an academic affairs or education committee, should provide the full board with summaries of the assessment information it receives, regularly reporting the data collected, its significance, the institution’s responses to the data, and its progress over time. The focus should be on collecting data that measures not just inputs, like the number of students enrolled, but outputs—what students have actually learned in the course of their studies.

For our part, Lumina Foundation is now testing a “Degree Qualifications Profile” to assist institutions in illustrating clearly what students should be expected to know and be able to do with the degrees they earn. The profile aspires to create a common vocabulary for sharing good practice, a foundation for better public understanding of the function of higher education institutions, and reference points for accountability stronger than test scores, graduation rates, research dollars, and student-satisfaction ratings alone. It describes five basic areas of learning: 1) broad, integrative knowledge, 2) specialized knowledge, 3) intellectual skills, 4) applied learning, and 5) civic learning. Outcomes for each are described independently, although in practice there should be much overlap and integration. For example, students gain conceptual understanding by exercising their intellectual skills and applying their learning to complex questions and challenges in academic and other settings. (For a sample from the profile that describes what students should know to demonstrate broad, integrative knowledge, please see sidebar on page 29.)

The Degree Qualifications Profile was developed by four leading experts in American higher education: Cliff Adelman, senior associate at the Institute for Higher Education Policy (IHEP); Peter Ewell, vice president at NCHEMS; Paul Gaston, trustees professor at Kent State University and author of The Challenge of Bologna (Stylus Publishing, 2010); and Carol Geary Schneider, president of the Association of American Colleges and Universities (AAC&U). It provides a road map for board members to play in their vital role in framing what higher education must deliver—in essence, what the degrees that their institutions award actually mean. We are currently testing it with 100 colleges and universities.

The focus on quality as learning is redefining the enterprise of higher education from a focus on what is taught to a focus on what is learned, and that is a fundamental shift. Carol Geary Schneider challenges higher education to move away from “an outdated model of accumulated ‘credit hours’ signifying little more than time spent in a set number of formal courses.” We must, she says, align our decision making and design to the “current need for graduates who can adapt and expand existing knowledge and skills to meet new challenges and unscripted problems in every sphere of life—personal, economic, civic, democratic, environmental, global.”

College and university boards can and should play a role in encouraging this shift in thinking about accountability. It is a prime opportunity for boards to engage the institutions they govern in focusing on higher education’s true value and reimagining ways to deliver it.

By concentrating not only on getting students access to an institution, but also on having them graduate with high-quality degrees, boards can reframe what they discuss, what data they review, and what they expect of the institutions that they shepherd and for which they serve as stewards. They can better serve the knowledge society by providing more skilled graduates, as well as confirm the ways that higher education adds value for students, parents, donors, and policy makers. That will lead, in turn, to more support from those stakeholders—ultimately helping to sustain the institution and higher education in general. The nation needs boards that value the larger picture and view their institutions as contributing not only to improving the lives of students and communities, but also the nation as a whole.

What Should Students Learn in Terms of Broad, Integrated Knowledge?

Broad higher learning should involve students in the practices of core fields ranging from science and the social sciences through the humanities and arts, and in developing global, cultural, and democratic perspectives. Broad learning should be integrated and furthered at all degree levels and should provide a cumulative context for students’ specialized studies.

At the associate level, for each of the core areas studied, the student:

  • Describes how existing knowledge or practice is advanced, tested, and revised.
  • Describes and examines a range of perspectives on key debates and their significance both within the field and society.
  • Illustrates core concepts of the field while executing analytical, practical, or creative tasks.
  • Selects and applies recognized methods of the field in interpreting characteristic discipline-based problems.
  • Assembles evidence relevant to characteristic problems in the field, describes the significance of the evidence, and uses the evidence in analysis of these problems.
  • Describes the ways in which at least two disciplines define, address, and interpret the importance of a contemporary challenge or problem in science, the arts, society, human services, economic life, or technology.

At the bachelor’s level, the student:

  • Frames a complex scientific, social, technological, economic, or aesthetic challenge or problem from the perspectives and literature of at least two academic fields, and proposes a “best approach” to the question or challenge using evidence from those fields.
  • Produces, independently or collaboratively, an investigative, creative, or practical work that draws on specific theories, tools, and methods from at least two academic fields.
  • Explains a contemporary or recurring challenge or problem in science, the arts, society, human services, economic life, or technology from the perspective of at least two academic fields; explains how the methods of inquiry and/or research in those disciplines can be brought to bear in addressing the challenge; judges the likelihood that the combination of disciplinary perspectives and methods would contribute to the resolution of the challenge; and justifies the importance of the challenge in a social or global context.

At the master’s level, the student:

  • Articulates how his or her own field has developed in relation to other major domains of inquiry and/or practice.
  • Designs and executes an applied, investigative, or creative work that draws on the perspectives and/ or materials of other fields and assesses the resulting gains and/or difficulties of including fields other than his or her own.
  • Articulates and defends the significance and implications of his or her own specialized work in terms of challenges, trends, and/or developments in a social or global context.

—From the “Degree Qualification Profile”

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