Is Higher Ed Too High for Americans?

A generation ago, according to the President, the U.S. had the highest college graduation rate in the world. Today, the U.S. ranks 12th in graduation rates.

"That’s unacceptable," President Obama said last week at the University of Texas in Austin. "But it’s not irreversible."

The U.S. is still held in high regard throughout the world for its institutions of higher learning.

According to a 2007 report by the Institute of Higher Education at Shanghai Jiao Tong University, China, 17 of the top 20 universities and more than half of the top one hundred universities in the world were in the United States.

The U.S. also leads the world in its investment in higher education, spending 2.9 percent of GDP on post-secondary institutions, while the world average is 1.4 percent, according to the American Enterprise Institute for Public Policy Research.

But despite the quality and the investment, only 40 percent of Americans between the ages of 25 and 34 have earned a college degree. To lead the world again in that prestigious category the ratio would have to rise to about 60 percent.

That would mean finding a way to add 8 million more college graduates by 2020. That is President Obama’s expressed goal.

"This isn’t just a target for target’s sake," said Cecilia Rouse, a member of the president’s council of economic advisers. "It’s really important that we have the workers that will compete in the 21st century."

"We have flat-lined, while other countries have passed us by," Education Secretary Arne Duncan said.

The problem is not so much that American students don’t make it to college. They do. They just don’t stay there.

"Initial enrollments in the U.S. are largely competitive with those of other countries," said Henry M. Levin, professor of Economics and Education at Teachers College, Columbia University.

"But, completion rates are well below those of other countries."

The White House pointed out that over a third of America’s college students and over half of the nation’s minority students do not earn a degree.

This is in an era when, according to a recent report by the University of Georgetown’s Center on Education and the Workforce, the U.S. is continuing to become a "college economy" – that is, where most of the jobs will require some sort of postsecondary education. Advancements in technology and automation decrease the need for low-education manual labor positions and increase the need for highly trained professionals.

"America needs more workers with college degrees, certificates and industry certifications. If we don’t address this need now, millions of jobs could go offshore," said Anthony P. Carnevale, the center’s director at Georgetown.

Levin said that extensive research indicates that a major obstacle to completing college is financial. A 2009 study by educational scholars Susan Dynarski of the University of Michigan and David Deming of Harvard, which examined a niumber of college intervention programs, found that "aid typically generated positive effects on enrollment and persistence."

The Obama administration is trying to address this.

"While family incomes have been essentially flat over the past 30 years, college costs have grown higher and higher," Obama said. "They have gone up faster than housing, gone up faster than transportation. They’ve even gone up faster than health care cost."

Since Obama took office in 2009, the government has renovated the student loan system, done away with using and compensating banks as lending middlemen and redirected about $60 billion to increased Pell Grants for college students. The government has also increased funding for the community college system, created a new tax credit for college tuition and simplified the student aid process.

"We’ve seen a 20 percent jump in financial aid applications, because we’re going to make it easier and make the system more accessible," Obama said.

The Dynarski/Deming study supports the importance of lessening the paperwork.

"The results suggest that increases in educational attainment could be achieved at virtually no cost by making existing aid programs simpler and more transparent," the study said.

Obama also challenged universities to manage their affairs more efficiently and bring tuition costs down.

Educators say the improvements help but fall short of the need.

"Pell grants are not enough," said Noah D. Drezner, assistant professor at the University of Maryland.

"They are an important aspect to helping students from working class families to afford to go to college," Drezner said. "However, even with the recent increases in individual Pell grants, they do not cover as much as they did in the past. A few decades ago a Pell grant could cover up to 60 percent of a student’s tuition and fees. Today it covers half of that."

Drezner noted that, according to Obama’s reform, after this academic year, Pell grants will increase annually in relation to the consumer price index-something they had not done in the past.

"However, if tuition and fees across the country continue to rise faster that the CPI, the impact of the Pell grant will continue to fall," Drezner said.

Columbia University’s Levin agreed that Pell grants, while useful, are not enough in themselves to overcome the affordability dilemma. Levin also cautioned against counting on technology for the solution.

"The shift to e.learning is hardly a solution for most, even if lower in cost, because it lacks the structure and accountability of more conventional education and has a high attrition rate," Levin said. "One study in Los Angeles found that only 6 percent completed degrees in the largest e.learning program in the country."

Levin added that, although the economic factor is critical, it is not the only reason students do not complete college. As the administration has also acknowledged, academic preparation for higher education is often lacking.

"We can’t afford to let our young people waste their most formative years," Obama said in Austin. "That’s why we need to set up an early learning fund to challenge our states and make sure our young people, our children, are entering kindergarten ready for success."

Obama touted his administration’s Race to the Top initiative which rewards states for progressive school systems. He also said the nation should make a significant investment in identifying successful educational methods and making these available nationwide as models for improvement.

"There are community colleges like Tennessee’s Cleveland State that are redesigning remedial math courses and boosting not only student achievement but also graduation rates," Obama said, adding that the government needs "to help other states pick up on some of these models."

Obama emphasized the importance of pursuing educational improvements, calling education "the economic issue of our time."

"It’s an economic issue when the unemployment rate for folks who’ve never gone to college is almost double what it is for those who have gone to college," he said. "Education is an economic issue when nearly eight in 10 new jobs will require workforce training or a 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, they will out-compete us tomorrow."

Secretary of Education Duncan called Obama’s goal to increase college graduates by 8 million by 2020 ""the North Star for all of our educational initiatives."

It remains to be seen how well the educational system and the nation will track it.


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