America has a transformational opportunity to develop its human potential and lift economic growth by boosting college completion, if we can summon the will and creativity to seize it. There is a growing sense that we can and must capture a huge talent dividend in order to improve lives and our economy. This realization is reshaping the debate in Washington, state capitols, and on the nation’s campuses.
President Obama has suggested a goal that, by 2020, America will again have the world’s highest rate of college graduates. His administration has jumpstarted the effort with an increase in Pell grant funding and a 10-year plan to invest record sums in community colleges. Private organizations, such as the Bill & Melinda Gates Foundation and Lumina Foundation for Education, are aligning their resources and energies around similar goals. The Lumina Foundation, a long-time leader in this terrain, seeks to increase the percentage of Americans with high-quality degrees and credentials from 39 percent today to 60 percent by 2025.
Our focus at the Gates Foundation is on low-income young adults—those who face challenges both in accessing higher education and in graduating. The foundation aims to double, by 2025, the number of low-income adults age 26 or younger who earn a degree or credential with value in the marketplace.
Why 26?
Because that’s the age by which millions of Americans, many the first in their families to attend college, must obtain the skills needed to build a promising career and support a family. As a matter of math, our “double the numbers” goal for disadvantaged young adults is an essential building block for progress; broader objectives simply cannot be reached unless the nation makes a major leap forward with the students who are most at risk.
And make no mistake: far too many students today are at risk. While the crisis facing K-12 schooling usually takes center stage in the press, the public should be equally alarmed to learn that only a fraction of those young people who pursue higher education ever receive a degree or credential. Fewer than 6 in 10 students entering four-year colleges emerge with a degree six years later. For community college attendees, the figure is roughly 2 in 10. For low-income and minority students, the numbers sink even lower. As a result, the percentage of our population with college degrees, which was once the highest in the world, has been surpassed by those of nine other nations.
In an era when industry demands greater skills and when its workers can be located anywhere on the globe, the college completion gap puts American living standards at risk. With African Americans and Hispanics making up an ever-increasing proportion of our young adults, the moral and economic consequences of this dilemma are escalating. At the same time, the completion gap represents a stunning waste of resources: more than half of every dollar spent on community college today, for example, goes to coursework and activities that never produce a degree.
If the U.S. economy has led the world while leaving so many of its citizens undereducated, our prospects seem boundless. But first we must renew our nation’s commitment to education beyond high school. And such educational leaps are squarely in the American tradition. America pioneered universal free public education in the mid-19th century, and created a workforce capable of greater productivity through industrialization. Between 1910 and 1940, the movement to universalize high school prepared Americans for more highly skilled technical and managerial jobs in industries that fueled economic growth. After World War II, the G.I. Bill famously helped pave a path to the great American middle class. As this history suggests, meeting the new challenge of college completion doesn’t require a departure from everything we’ve done before or some mysterious technical breakthrough. It merely requires us, as these earlier movements did, to set ambitious goals and rally the nation to meet them.
The question confronting us now: what innovative practices and public policy changes are needed to quickly advance this agenda?
At the foundation, we believe fresh thinking on this question requires a new angle of vision. Too often the debate is framed by the perspectives of higher education institutions rather than by the needs of their “customers,” their students. This distinction is critical because the typical student profile has changed dramatically over the last 20 years. Gone are the days when college-goers were 18-year-olds fresh from high school who lived on campus, attended full-time, and were supported by their parents. Today 75 percent of undergraduates – about 12 million people – are older and commute to class. They juggle the competing demands of work, school, and family. For many of them, college is the culmination of years of struggle to overcome poverty, difficult family situations, and a system that seems perversely designed to put educational opportunity beyond their reach.
Consider this: in elementary school, millions of low-income children have little awareness of education beyond high school—college simply isn’t part of their vision of their future. Entering high school, they’re likely to find few college prep classes and will probably have inexperienced teachers who are ill-equipped to ensure their success. By their junior and senior years, those who haven’t dropped out receive little encouragement to apply to college, and little help in finding the money to go. If they do apply, they’re confronted by a financial aid process that is so dense and confusing that literally millions of them fail to apply for the grants and loans for which they’re eligible. Those who persevere are admitted to college, but the toll of a dismal high school lands them in remedial classes. The skills they need to learn should only take a few weeks to master, but they’re forced to sit through (and pay for) semester-long courses.
Why?
Because that’s the way schools and colleges have always done it, and that’s the only way states will pay the colleges for doing it, no matter how wasteful and demoralizing this situation is for everyone involved. Then, after two or more years of study, students often find it difficult to transfer to a four-year college, because there’s often no alignment between what they’ve already taken and the way credit is granted at the new school they seek to attend.
And these obstacles are just for starters. Is it any wonder the typical undergraduate, who starts at a community college, takes nearly six years to get a bachelor’s degree? Or that so many, facing mounting money and family pressures, never go the distance?
Nobody would deliberately design a system that squanders so much human potential and consumes scarce resources so ineffectively. Yet if we’re honest, current practices persist because they’re convenient for many of the adults and institutions involved, and because those who suffer them lack the power to shake up today’s arrangements. Yet dramatic improvement is possible with pragmatic, ambitious policies—but only if they are fueled by a movement that puts students and young adults first, and which stands ready to challenge a failed status quo to assure student success.
“Doubling the numbers” will require a broad coalition that unites Americans of every stripe. This common ground is possible. Conservatives should be appalled by the current system’s waste and ineffectiveness and alarmed by the certainty that the country will never achieve its economic potential if we don’t educate more people to levels now routinely reached by other countries. Liberals need to realize that their traditional passion for college access without an equal emphasis on college completion is of little value. And both sides need to be chastened by the urgency of meeting these challenges in an era of enormous fiscal pressure at every level of government—pressures shaped not only by our current economic rut, but by the looming retirement of the baby boom generation, which will force us to reconcile the need to do right by our seniors with the need to ensure opportunities for younger Americans. This coming tidal wave of retirees means that the search for more cost-effective ways to deliver a quality education cannot be an intriguing sideshow. It is critical to America’s economic future.
We believe the debate has reached a critical moment, and that the choices America makes in the next few years will decide whether we get more students through college faster and at lower cost. To promote these objectives, the Gates Foundation will work with our grantees and other partners, as well as with state and federal policymakers, to change public policy (along with institutional and individual practices) in three broad areas. We will aim to:
(1) Establish new goals and expectations for college completion, along with the tools that let us measure progress;
(2) Create meaningful incentives for completion; and
(3) Improve the efficiency and effectiveness of educational delivery.
Below we will sketch out our current thinking in each area, and provide some promising approaches that suggest the direction our policy work will take.
1. Establish New Goals and Expectations and Create the Tools to Measure Progress
You’ll never reach your goal if you’re not clear on what it is. And you can’t manage what you don’t measure. These simple truths are mostly ignored when it comes to America’s massive investment in postsecondary education.
Our first objective will be convincing states, the federal government, and our leaders in the higher education community to commit to our “double the numbers” goal so that it becomes a guide to subsequent policy development and educational innovation. At the state level, we will focus on states whose size, target population and willingness to innovate can help advance this goal.
At the federal level, the president and Congress have put the completion issue squarely on the national agenda, and they understand that higher education is connected to economic recovery. That initiative would boost Pell grant awards and provide billions in new funding for community college facilities and completion programs.
A goal is an empty pledge, of course, without meaningful ways to track progress toward it. Unfortunately, at the state and federal levels today, the quality of information needed to accelerate completion while lowering costs ranges from mediocre to nonexistent. To begin with, how we define and measure college completion needs to be improved and standardized. Beyond this, while there have been pockets of progress, policymakers cannot adequately track individual students from preschool through K-12 to college or other postsecondary training and into the workforce.
This absence of good data leaves everyone flying blind. Why are dropout rates rising among certain groups in certain schools? Why do students at some community colleges fare much better in the job market than those who attend others? Why do students from certain ethnic groups on certain campuses take two years longer to receive a degree than similar students elsewhere? Without knowing how every student is faring, it’s hard to diagnose and act on problems, or to create benchmarks that drive improvement. And without being able to trace what happens to every student at key transitions (between high school and community college, for example, or from college to work), we can’t hold institutions accountable for their performance. States should develop and improve longitudinal data systems that enable comprehensive student tracking. States also need to assure that relevant data housed in government agencies or in the education and training sectors can be shared in order to inform decision making.
In addition, governments and families need better information from institutions on their true costs of delivering an education, what students learn, and the jobs their graduates get. Many in higher education have resisted such metrics, labeling them intrusive, insensitive to complexity of mission or student demographics, or inconsistent with the notion of a liberal education. While we appreciate the challenges inherent in developing such measurements, colleges cannot (and should not) escape this scrutiny in an era of lagging national performance and increasing fiscal pressure. While modest first steps have been taken via the Collegiate Learning Assessment and the National Survey of Student Engagement, we see these as early efforts to craft an accountability regime that must become much more robust. Higher education should lead, not impede, this effort.
In the end, clearly-defined completion goals, and the data and tools with which to measure progress toward them, are a way to tilt the culture and energies of higher education toward a new public mission. This mission is not about prestige, or shiny campus amenities, or Nobel laureates—important as those will always be. It’s about helping millions of low-income young Americans make good on their one shot at earning a degree or credential faster, and at lower cost.
Federal and state governments can drive student achievement by ensuring detailed student-level data is accessible and actively used to improve student performance, from early childhood education through secondary, postsecondary, and into the workforce. The data on every student must be high quality and standardized across the nation, and also accessible through networks that allow comparisons across institutions, districts, and the nation.
The student data system in Florida is considered a model for other states, largely for its ability to track individuals through their PreK-12 schooling, into college, and out into the workforce. The database collects information from 26 local and state entities as well as the military, prisons, and public assistance. Florida makes data available to researchers and administrators to help inform policy and funding decisions and manage programs. Currently, Florida is the only state in the nation where this level of data can be examined across education and workforce sectors and at the individual student and course level.
Indiana has a new data-sharing agreement to track students between adult basic education and postsecondary education programs, which are run by different agencies. This agreement is part of broader project centered on workforce skills in the state. It includes a new Workforce Intelligence System to track adult participation and performance in public education and training. A widely read Indiana Chamber of Commerce report card on basic skills and workforce education, which sparked Chamber-led forums around the state, is drawing substantial engagement from businesses.
Illinois and Wisconsin are using their existing data capacity in new ways to ask and answer questions about how well students transition between adult basic education/ESL, developmental education, and community college certificate and degree programs, and how many of these students eventually complete credentials.
2. Financial Aid and Incentives for Completion
Catalyzing completion for low-income young adults involves two broad steps. First, we need to make it easier for students to pay for school; if you can’t afford college, you can’t complete a degree. Next, once they’re enrolled, we need new incentives that help students get further, faster. The research is clear: the longer it takes to graduate, the more likely students are to quit before getting there.
Each year, an estimated 1.8 million young people who are eligible for financial aid don’t apply, either because they don’t know the help is available or because the system is such a confusing hodge-podge of grants, subsidized loans, and tax credits that they can’t figure out what to do. Meanwhile, the value of needs-based aid has eroded dramatically. The maximum Pell grant, currently $4,731, would need to rise to $10,000 to cover the same portion of public four-year college tuition as it did 30 years ago. In 1976, the maximum Pell grant covered 72 percent of costs; by 2003 that had dropped to 38 percent. For a family in the lowest earning quintile, the share of family income required to pay for a year’s tuition at a four-year public institution has doubled since 1960, from 13 percent to 27 percent.
Many groups – from the State Higher Education Officers to the Spellings Commission to the College Board – have made thoughtful proposals to increase needs-based aid while making the process simpler and easier to navigate. We share these goals, but also believe such increases should be implemented in ways that encourage completion for the vast majority of students who work their way through school. In addition, many campus financial aid offices don’t point students toward attractive loan programs out of reluctance to encourage debt; yet manageable loans can often make the difference between full-time and part-time enrollment, and thus dramatically raise the odds of completion.
State funding for institutions should be designed to encourage completion, and not simply reward enrollment, as is typical today. Such policies need to be carefully drawn, so as not to promote “creaming” in admissions, in which colleges accept only those who seem easiest to get to graduation. In addition, such incentives must apply to a meaningful share of an institution’s funding; previous efforts to align funding with completion have generally involved sums too tiny as a portion of overall college revenue to promote any change in behavior.
We also believe states should give additional direct aid to institutions that serve higher proportions of low-income young adults because these students need more support for things like child care and transportation. One option, to borrow a concept from health insurance, may be to “risk-adjust” per capita funding based on an institution’s student profile, to encourage colleges to take on the most challenging cases. We expect to help states better align funding with completion. We will also support institutions that deliver specialized credentials, such as for auto mechanics, where costly instructional materials are required.
As one state education official put it: “When a chancellor or president gets up in the morning, where on their list is the question, ‘What am I going to do today to get all these kids to graduate?’ It’s just not very high on the list today. And until that changes for presidents and chancellors, and for the deans of admission, the financial aid office, and the faculty, we won’t get where we need to go.”
Washington State’s Student Achievement Initiative provides financial rewards to colleges based on how many students they help achieve certain milestones associated with reaching the “tipping point” – about one year of credits and an occupational credential – which research has found is the minimum amount of education needed to significantly increase earnings. These milestones include increased basic skills, completion of a remediation course, and earning 15, and then 30, college-level credits. The program particularly rewards colleges that successfully help students who entered college needing help with basic skills or those who spoke little English.
Washington’s statewide Opportunity Grants target aid to low-income students in high-demand occupations and couples it with funding to the college for the extra student supports that help drive completion. The $1,500 per student that each college receives can be used for one-on-one tutoring, career advising, college success classes, emergency child care, and emergency transportation expenses. Early results are impressive.
In 2009, funding for North Carolina's public universities will no longer be tied to enrollment but to performance—a policy shift that will impact the state's entire education system. UNC system President Erskine Bowles says the change is aimed at increasing student retention and increasing graduation rates.
3. Improve Educational Delivery
We see two policy priorities here:
(1) Accelerated academic catch-up for students who arrive unprepared for college;
(2) Faster progression to degrees.
Fixing remedial (aka developmental) education is the national calamity no one wants to touch. The government doesn’t want to pay for it, professors don’t want to teach it, and students hate it. Yet roughly one in three college students need it, including a stunning 60 percent of community college entrants. Most of them never make it past this threshold. Developmental education as currently constructed isn’t working.
The stakes of this dilemma are worth underscoring. Reinventing developmental ed isn’t “sexy.” But if we think retaining America’s global economic supremacy is sexy, and if we think renewing our commitment to equal opportunity is sexy, then there is no agenda with a more compelling claim on our collective energies. This problem is doubly depressing because it forces us to also confront the failures of our K-12 system—failures that the foundation and many others are working to remedy. Unless we wake up to the fact that we are losing millions of future members of the middle class because we failed to teach them basic skills, we will forfeit our economic superiority and tarnish our ideals. It’s that simple.
What should we do?
No one has the full answer, but some innovative states and educators offer promising places to start.
Summer “bridge” programs could offer remedial classes for free and help close the gap in college readiness for students who don’t need a full sequence of remedial work. Better assessments at the point of entry would let schools target student skill gaps more effectively. Colleges might also learn from “just in time” models pioneered by the University of Phoenix and other for-profit providers that integrate remedial work into college-level courses directly, rather than force students to endure semesters of de-motivating downtime. Modular instruction could similarly let students advance to new material faster, rather than waiting to meet archaic “seat time” requirements. Peer mentoring and related support services could be required and funded. Creative communications campaigns to reduce the stigma associated with developmental education could also be launched.
In addition to overhauling developmental education, colleges need to speed the pace at which students move toward degrees or credentials, since delay means fewer graduates. Part of the answer, as noted earlier, lies in bolstering financial aid so students have the wherewithal to attend full time. But one of our core convictions is that the nation can only meet its completion goals by upending traditional notions of “time” and “place” that shape college practices today. Inherited ideas about how long certain activities need to take, where they need to take place, and with instruction by whom, are ripe for rethinking.
We’ve already mentioned the idea of scrapping seat time rules that are a relic of state funding models. But why must a bachelor’s degree take four years? Why can’t early college high schools become the norm for those who are motivated to graduate faster? And with technology, many of the traditional constraints on teaching and learning are obviously less relevant. As online providers from the University of Phoenix to Rio Salado College are showing, technology increasingly enables the kind of “anytime, anywhere” learning akin to the “flattening” corporate revolution made possible by personal computing and the Internet. Western Governors University is using a blend of online and in-person instruction to halve the total annual student cost of delivering many degrees.
Moreover, who’s to say that colleges and universities should be the only – or even the preferred – providers of valuable credentials? Various industries, from auto service to information technology, offer third-party certifications outside of academia that have proven value in the job market. There may be creative ways to deepen these models, or to integrate them with academic coursework in ways that employers find useful. Governments might also consider directly rewarding “transition” employers (in classic “first jobs” like fast food or retailing) for upgrading the skills of their workers in measurable ways. From the young adult’s perspective, there’s no reason traditional educational institutions should have a monopoly on providing valued credentials, or on receiving public support for successful instruction.
As we ask colleges to become more efficient and effective, it is only fair to also ask policymakers to eliminate low-priority legislative demands and senseless regulations that schools rightly complain divert resources from their core mission.
Government must reduce the state licensure and accreditation constraints on how education gets delivered. For example, eliminating the antiquated notion that financial aid must be tied to an academic calendar of semesters, and rethinking interstate constraints on online learning companies.
State and federal policymakers must also cooperate on standardizing learning outcomes, measurements, and how data gets used against both—innovators can’t succeed unless there is a ruler to measure their performance. Current measures are limited, and so is innovation.
* * *
Our foundation looks forward to engaging with state and federal policymakers and higher education officials to promote this agenda for postsecondary success. We plan to fund and encourage innovation at scale – at every community college campus in a state, for example – because education reform is littered with promising pilots that never got big enough to make a difference. We’ll urge policymakers to rigorously assess such initiatives so we can learn what really works. And we’ll seek to build new coalitions that share our sense of urgency.
In the end, closing the college completion gap is a test of national renewal. Some say America is fated to decline as new powers, like India and China, rise. We believe the future is matter of choice, not destiny. It is nowhere written that the United States must lead the world in higher education spending, yet rank 10th in the proportion of young adults who graduate. Nor is it predetermined that half the money we spend on community college fails to produce a diploma even as students exit saddled with debt. These are realities we have allowed to persist, but they are also conditions we can no longer tolerate.
Our task is to find solutions. Implementing them is a question of will.
Hilary Pennington and Greg Shaw are colleagues at the Bill & Melinda Gates Foundation’s U.S. Program. Hilary directs postsecondary education and Greg directs policy and advocacy. Special thanks to Matt Miller for his assistance in preparing this white paper.