The postsecondary education investment

By Steve Gunderson
September 27, 2013

Any examination of postsecondary education begins with the students. What careers do they seek? What kind of education and skills will enable them to pursue their dreams? How do we design and deliver education in a way that meets them where they are in their personal lives and careers? While students determine their own futures, institutions have a responsibility to deliver education in the most effective, efficient way possible — especially considering the federal government’s investment in making college available to all Americans. Today that investment is over $175 billion, including student loans, grants and tax benefits.

Our country continues to slog through a multi-year jobless economic recovery, while employers increasingly demand mid-level skills in their employees. As a result, we have entered a period where postsecondary education is imperative for global competitiveness and economic growth, but it needs to be an education that prepares students for success in the workplace.

Despite the sluggish jobs recovery, employment projections for the future give us hope. By 2020, there will be 55 million new job openings in the United States. Twenty-three million of these openings will be for jobs that don’t even exist today, while 32 million will replace retiring baby boomers. Sixty-five percent of all jobs will require some level of postsecondary education and training.

Part of the postsecondary education conversation concerns what role the federal government should play in where students decide to enroll, how much the student should spend on tuition and what degree or certificate (everything from a B.A. in Healthcare Administration, to an associate degree in Network Systems Administration) the student can pursue. Federal financial aid has increasingly become a key component in any discussion on education affordability, access and opportunity. This is due to the rising cost of education at private nonprofit institutions, and selective admissions and recruiting policies at public institutions that direct states’ higher education funding to upper-middle class students.

Reuters recently ran a lengthy story that captures the ins and outs of this evolution and the disinterest by public and private nonprofit universities in educating the “new traditional” students. New traditional students work full-time while attending school, don’t live on campus because they have a family, pay for education with money they personally saved, and/or are enrolled in a certificate program. The schools I work with are addressing a critical gap that exists in American education, by providing access and opportunity to these students.

The Reuters article states that our institutions should be a liberal cause because of the students we serve and their potential for upward mobility. It also notes that if there was a more productive political environment in Washington, D.C. our institutions would sit at the nexus of a bipartisan compromise on postsecondary education.

Since that political environment does not exist, we are left with an Education Department proposing regulations that would determine if a postsecondary degree or certificate program is eligible for federal financial aid on the basis of a single metric — the debt-to-earnings ratio of students who used federal loans and complete their program. The regulation is mostly targeted at private-sector colleges and community colleges. If the regulation goes into effect, it will cut off access to thousands of programs for hundreds of thousands of students, while leaving almost all the rest of postsecondary education and their upper-middle class students immune from regulatory overreach.

The Education Department is busy creating new regulations focused on a select number of schools, while President Obama has proposed reforming how the federal government evaluates all higher education institutions and distributes financial aid. The president’s approach would use multiple factors and outcomes and apply them to all schools (not just private-sector colleges and community colleges), compared to the Education Department’s singular focus on the debt-to-earnings ratio.

Within the president’s own administration there are two different forces at work: Individuals who want to reform all of postsecondary education by changing how we evaluate institutions, and anti-business ideologues who want to regulate out of existence institutions that provide the only pathway to postsecondary education for certain students.

Our country needs a policy environment that supports forward-looking institutions focused on three areas: creating sustainable, yet affordable programs; improving student outcomes; and creating academic delivery that meets students where they are physically and financially in their lives. Instead, we have a proposed regulation that will use earnings data from current graduates to determine if future students may use federal financial aid in certain academic programs.

If our nation allows a single earnings metric to become the arbiter of what is and what is not a successful program, all institutions — even private sector ones — will then be forced to limit access to students with a lower possibility for success. Many of these students are the first in their family to attend college, work full-time or are unable to self-finance their education. In other words, if you are deemed to have lower possibility of completion and employment, America no longer has an interest in giving you a chance to obtain an education. The private sector, along with our partners at community colleges, has long sought to build this bridge, by enrolling a high percentage of new traditional students, who happen to be most reliant on federal financial aid.

The Education Department’s efforts contradict the administration’s goal of closing the skills gap by increasing the number of Americans with postsecondary credentials. Continuing down this regulatory path will hamper Obama’s attempt to create a new middle class in America. We need the administration to engage in a conversation focused on prospective students who need opportunity the most. If it doesn’t, the very students it intends to help will ultimately be the ones denied access and opportunity.

In the end, the government must be agile enough to meet multiple goals at the same time. We must address the impending skills gap or America’s economy will suffer. We must also ensure that in times of limited resources, accountability and outcomes matter. But we must also design and deliver a higher education system that provides opportunity for education, skills, and real economic growth for all Americans. If we fail to do so, we’ll ignore the promise of the American Dream for all our citizens. And a nation divided between rich and poor cannot last.

PHOTO: U.S. President Barack Obama talks about the rising costs of student loans while at the University of Iowa in Iowa City, April 25, 2012. REUTERS/Larry Downing 

One comment

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Mr. Gunderson, I have seldom read an example of more pure academic bovine scat from academia.

“…institutions have a responsibility to deliver education in the most effective, efficient way possible…”. Well, duh?

“we have entered a period where postsecondary education is imperative for global competitiveness and economic growth, but it needs to be an education that prepares students for success in the workplace”. This could have been taken from a college brochure in circulation in the nineteen fifties.

At that time you could get a laugh by asking the difference between a can of Alpo (dog food) and a recent college graduate. The “punch line” was that the can of Alpo had “content”.

If one looks at the student debt being rolled up today and the utter mismatch between the people annually exiting “the process” from our institutions of higher learning and what American “commerce” needs to be globally competitive it is more appropriate to cry than laugh.

“New traditional students work full-time while attending school, don’t live on campus because they have a family, pay for education with money they personally saved, and/or are enrolled in a certificate program.” America is producing far, far more college graduates than it needs and employers are going to hire the “best of the best”.

That’s NOT going to be, for the most part, these “new traditional students” who enter the rat race with one hand tied behind themselves and little, if any, personal examples to follow or inspire. Funding the “many” to foster “the exception” is a good sales pitch, but a monumentally poor investment of public priority and funds.

“…all institutions — even private sector ones — will then be forced to limit access to students with a lower possibility for success. Many of these students are the first in their family to attend college, work full-time or are unable to self-finance their education. In other words, if you are deemed to have lower possibility of completion and employment, America no longer has an interest in giving you a chance to obtain an education.” You got it. At some point America must limit limited available subsidy to those most likely to help it survive in a hostile world.

“…we must also design and deliver a higher education system that provides opportunity for education, skills, and real economic growth for all Americans. If we fail to do so, we’ll ignore the promise of the American Dream for all our citizens. And a nation divided between rich and poor cannot last.” We will have little choice but to prioritize limited educational opportunity for our “best and brightest in times of decreasing resources. We should not make promises we cannot keep.

There is a “natural divide” between “rich and poor” in EVERY ECONOMY that exists today and has ever existed. While it is probably true that, sooner or later, every nation falls, no matter how powerful (Rome did); to infer that greater “equality” might somehow change the inevitable is a unproven theory at best.

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