It's great to be at the TIME Summit on Higher Education with such a distinguished group of leaders. All of you have thought long and hard about the future of higher education. And I'll try to be brief before we turn to the panel discussion.
I know we would all agree that the future of higher education is vitally important to America's future. But I would also suggest to you today that higher education is approaching a crossroads, where leaders will be asked to choose between incremental and transformational change.
At the heart of this choice is a paradox. In many ways, America's system of higher education is still the envy of the world. We have some of the top-ranked research universities and liberal arts colleges on the planet. And our networks of state universities and community colleges provide unparalleled access to postsecondary education for students of all socioeconomic backgrounds.
And yet, for all its historic and current successes, our system of higher education must get dramatically better. In the era of the knowledge-based, global economy, America has to rapidly accelerate college attainment and learning to prosper and maintain its global competitiveness.
This is no time to rest on our laurels. In the information age, higher education is no longer a luxury. It's a necessity that every family in America should be able to afford.
That's not just my view and President Obama's view—it's what the American public believes. Polls show that three out of four Americans believe "in order to get ahead in life these days, it is necessary to get a college education." At the same time, three in four Americans also believe that college today is too expensive for most people to afford. That gap—between aspirations and opportunity—is one we must close.
Last month, I went on a two-week cross-country bus tour to promote the importance of education. Everywhere I went, there was both a strong sense of urgency about the importance of getting a college education, and a great deal of anxiety about whether middle-class families are getting priced out of college.
People may not know all the details. They may not know that, in a space of a generation, the U.S. has dropped from leading the world in college attainment to being ranked 14th in the world in college attainment among young adults. That is unacceptable.
But they do worry that other nations are out-educating us. And they do fear that other nations will soon be out-competing us.
To boil it down to its core elements, our higher education system today faces three great challenges. They are:
First, the price of college is too high.
Second, the college completion rate is too low.
And third, there is too little accountability in higher education for improving attainment and achievement.
Why do I believe that higher education is at a crossroads? It is no secret that our current model of student and institutional aid is unsustainable. It is incapable of meeting the bipartisan goal that President Obama articulated four years ago--that America will again lead the world in college attainment by 2020.
In the past generation, state funding per full-time college student has fallen by about 25 percent, and the Great Recession rapidly accelerated that plunge in spending. Some states today are even continuing to cut higher education while running substantial surpluses—that makes no sense to me.
At the federal level, the Pell grant program for low-income students is facing an eight billion dollar shortfall in 2014. And it absolutely must continue to rapidly expand, as it has for the last four years, if America is to achieve the 2020 goal--and if postsecondary education and training are going to remain the engine of national economic growth.
All three of these core challenges to higher education—high prices, low completion rates, and too little accountability—are each difficult problems on their own. But in practice they are that much more difficult, because they are interrelated and cannot be addressed piecemeal or by the federal government alone. They can only be addressed through shared responsibility, tough-minded collaboration, and collective action.
Speaking in broad-brush terms, I believe we will see two ideas take hold in response to these threats to our higher education system.
The first response is that the system of institutional grants and loans will start to shift more toward a performance-based and outcomes-based system than is the case today, where aid to institutions of higher education is based on large measure on what institutions received in the past or the number of students an institution recruits.
We also need a simplified system of student aid where the federal government shares responsibility with states and institutions for keeping down costs, raising completion rates, and improving quality.
The federal government currently provides more than $150 billion a year to postsecondary institutions and students through grants, loans, and direct school support. But effectively none of the aid is awarded based on meaningful institutional performance or improving student outcomes. We must continue to invest, and we must use taxpayer dollars more wisely.
And by the same measure, students and families will need to make better choices about the colleges, universities, and training programs in which they decide to invest their time, energy, and future.
This shift in the direction of performance-based funding is already underway. We have tightened funding for Pell Grants and subsidized loans by limiting how long each student can receive aid. As you know, President Obama has proposed a one billion dollar Race to the Top program for College Affordability and Completion.
He has also proposed a First in the World initiative to fund innovative models to accelerate college completion. The President has warned that if colleges and universities "can't stop tuition from going up, the funding they get from taxpayers will go down."
The Administration has similarly taken a series of far-ranging steps, both to promote basic transparency around college costs and to shift to more of an earnings-based repayment model for student debt.
Finally, a number of states, like Indiana, under Governor Mitch Daniels, and Missouri, under Governor Jay Nixon's leadership, are also moving toward incorporating elements of performance-based funding.
A second remedy for the challenges facing higher education is likely to be a rethinking of the role of educational technology.
We still have a lot to learn and perfect about online learning, adaptive software, analytics, simulations and gaming, and other uses of technology in higher education. But there is no question that a digital revolution is already underway in higher education, and its vast potential has only begun to be tapped.
Through the smart use of technology, higher education now has an extraordinary opportunity to personalize learning, expand access, and bolster productivity. Blended learning empowers educators and enables students in ways that were unimaginable just a few years ago.
I'll close by making the point that the challenges to our higher education system can only be met through a shared partnership with clear responsibilities, involving all levels of government and institutions, as well as the business, education, labor, and philanthropic communities.
It's time to end the buck-passing and blame game, where college leaders blame high schools for sending ill-prepared students, where high school principals blame the elementary schools, where elementary school principals blame the preschool programs, and preschool teachers blame the parents.
I'm not asking for a Kumbaya moment, where everyone joins hands together and sings. Instead, I'm talking about tough-minded partnerships that drive transformational change and deliver a "first-in-the-world" system of higher education opportunities for all Americans.
K-12 schools must become true partners to ensure both that academic standards are truly aligned with expectations for college work, and that many fewer high school graduates need remedial education before they can take college courses. And colleges must become more committed to the success of their local schools, or open their own public schools, as some have.
Colleges also need to partner with other postsecondary institutions to make sure credits are transferable, and that fewer students pile up costly, unneeded credits.
Business leaders need to work more intensively with community colleges and technical training providers, as well as high schools, to make sure that the right skills are taught--and that training is tailored to future labor market needs. The corporate sector should be motivated by a perfect combination of altruism and self-interest in developing real partnerships that lead to real jobs.
And I'm not just talking about the technical skills, but the character, workplace, and critical thinking skills that ensure success in any workplace and the larger society long after graduation.
And all of this has to happen without letting efforts to trim costs and improve efficiency become an excuse for reducing quality.
We need more graduates with high-quality degrees and 21st century knowledge and skills--not more graduates with meaningless paper credentials. And today, several states, like Colorado, West Virginia, and Kentucky, are doing a better job than others of making progress toward their portion of the 2020 goal, of having America regain its place as the best-educated workforce in the world.
So, clearly there are no simple solutions here, there are no silver bullets. But we can't let the scope of the challenges facing higher education become a discussion-ending excuse for inaction. Quite the opposite—it should motivate us to move with a sense of real urgency and mission clarity.
For all of the challenges we face, I am actually optimistic that these battles can be won. Why am I hopeful? Because the skeptics, and the conventional wisdom about higher education reform, have, so often, proved wrong.
Recall that President Lincoln signed the Morrill Act, establishing our nation's land grant universities, in the midst of the Civil War. In the aftermath of World War II, Harry Truman successfully pushed for the creation of our nation's community college system.
More recently, as part of the health care law, we phased out the private sector-lender middlemen who were making literally tens of billions of dollars from subsidized government student loans. Instead, we used those dollars to help millions more low-income students receive Pell Grants and afford the opportunity to pursue their dream of going to college.
Skeptics warned that the government would never accomplish the switch to Direct Lending in a timely and effective way. But the skeptics and the conventional wisdom were wrong.
Today, there are universities, community colleges, and states tackling all of these tough issues, all across the country. We just need now to take transformational change to scale.
Promising innovations, which constrain costs and increase completion, while improving quality, are still the exception today. Collectively—by better aligning incentives and rewarding courage—we must make them the norm.
this weekend that starts in Corona in western Riverside County and ends on the Santa Monica Pier.
Highlights from the October 18 issue of 