The Crisis Facing the U.S. Higher Education System – Part One
A few months ago, I published a blog article about the Crisis in American Higher Education: Evolution and Continuing Disruptions. The article was a summary of a five-part series that outlined a speech I gave for a group of business executives.
Dr. Bjorn Mercer, Department Chair, Communication and World Languages, School of Arts and Humanities at the American Public University System, and I have collaborated on podcasts in the past. We decided that my article would form the basis for a series of podcasts about the current and pending disruption in American higher education. What follows below is a link to the podcast and the script to the podcast beneath the link. I hope you enjoy it.
Read the Transcript:
Bjorn Mercer: Hello, my name is Dr. Bjorn Mercer, and today we’re talking to Dr. Wally Boston, president emeritus of American Public University System. Our conversation today is about the crisis in higher education. Welcome, Wally.
Wally Boston: Thank you, Bjorn. Great to be here.
Bjorn Mercer: Love having you back. Important topic. It’s a topic that, honestly, every institution has to grapple with today to ensure that they position themself for, honestly, long-term survivability. The first question is you recently wrote a five-part series on your blog titled “How to Explain the Crisis in Higher Education.” In part five, you included a list of concerns for the future of higher education. What are these concerns?
Wally Boston: Glad to discuss those concerns. In no particular order of priority, concern number one is that currently our student loans outstanding total $1.7 trillion. The Biden administration proposed a debt forgiveness plan. That forgiveness plan forgave $10,000 per person for a student loan for people whose income did not exceed $125,000. It also proposed an additional $10,000 in forgiveness of loans for people who had Pell Grants when they were matriculated in school. Almost immediately, there were lawsuits involving the forgiveness plan, and most recently, at the end of last week, we had an appeals court order the Biden administration to stand down on the forgiveness for what appears to be an indefinite period under the reasoning that Congress should forgive this debt, not the Biden administration. The Biden administration has not yet appealed it. We’ll see where that goes. But in general, my issue was that I felt like this was an issue for Congress to resolve and not for the Biden administration.
But also, the other issue that I had was really that the debt forgiveness plan forgave the debt, but every year we’re adding several hundred billion dollars more in debt. It wasn’t changing the existing program. Congress over the years has created a very generous borrowing program, which has allowed institutions to raise their tuition to quite high limits, and it didn’t solve the problem. All it was going to do was do a blanket loan forgiveness with no resolution as to institutions, for example, who wanted to participate in the loan program had to have tuitions below a certain threshold, and it didn’t do any of that. That’s one of my concerns. We need to fix the affordability of higher education.
Another concern I have is tuition discounting, which has been a practice of small colleges for at least the past 25 years, if not a little longer than that, the tuition discounting for small colleges is at an all-time high. This year’s freshman class received an average of a 54.5% discount, and all enrollees of small colleges received an average discount of 49%. Well, when you’re discounting your tuition at 50% or greater, just remember that’s half of the cash you’re marketing it as is not coming in the door. It’s not covering cost, and so if you have any kind of enrollment shortfall, particularly if you’re operating a fixed operating expense campus, a physical campus where you’ve got to keep the dorms open, you’ve got to keep the dining halls open, you’ve got to have certain number of faculty who are full-time, who are in attendance, all these programs, it could be quite disastrous for colleges. It’s just not good to have the discounting at this all-time high when overall enrollments are dropping.
The American public is skeptical of the return on investment for college overall, and particularly, we’ve been declining in enrollments since 2011. The year 2010 was the all-time high for college enrollment and enrollments have been declining for a number of reasons. We’ve seen a decline in the number of high school graduates in general, so that in turn, you would assume unless you can get the percentage of high school graduates who are going to go to college up, you’re going to see a decline in college students.
But I think the pandemic really brought to a head the public’s realization of just what ROI is there for college. The fact that people were paying a lot of money in some cases for their children to attend colleges with a traditional campus, and instead, they were spirited home, or they were asked to go to their off-campus apartments, and attend classes online. There were big arguments and fights about refunds for those dorms that spring semester the pandemic occurred. Then, in fact, the next fall, there were some schools that did not resume on-campus classes, and people took them online, and yet they didn’t reduce their tuition. So the ROI’s been questioned directly for a number of years.
Another concern is that a traditional four-year degree really doesn’t provide skills that are now required by employers. The thinking years ago was that a liberal arts degree develops critical thinking, and critical thinking is going to help somebody on the job, but most employers now really want, in addition to critical thinking, they want somebody prepared with skills to start immediately. That’s not happening and we really don’t have a lot of collaboration between institutions and employers on exactly what it is they’re looking for and how they can do that. There are some institutions, but I’d say overall, in general, that’s not happening.
America needs to rebuild its high school vocational education. When I graduated from high school in 1972, a much smaller percentage of Americans went to college. I’d say a fairly high percentage of guys that I knew from my age group went to vo-tech. We had a lot of vo-techs out there. They were well-funded. You could learn to be a car mechanic, a welder, a number of different things, carpenter. We got away from that. By cutting funding to vo-techs, a lot of counties, instead of having a vo-tech attached to every high school, they’d have them attached to the entire county, and they shut down the rest of them because they were fairly expensive to operate. We got in this mode that college is for everybody. College is not for everybody. Not everybody needs to go to college. We need to change that mindset.
Our K-12 education outcomes are a disaster. We have a test called the National Assessment of Educational Progress. We administer it to fourth graders and eighth graders nationwide. The most recent NAEP scores showed a continuing decline in math and reading proficiencies. Some people are trying to blame that on the pandemic, but it’s actually been in decline for about 10 years now. I think the pandemic exacerbated it. Particularly among eighth graders in math, we dropped from 38% proficiency to 32% proficiency. The crazy part about this is I just don’t understand why this hasn’t been higher on people’s agendas because to me, if less than half of your eighth graders are proficient in math, or less than half of them are proficient in reading, what does that say for our ability to get people through the education system and prepared for the workforce?
Colleges also, these somewhat expensive private colleges in particular, are now competing against free content from open-educational resources. There’s this funny story about the internet about how much content is being produced daily, exceeding the lifetime content produced by The New York Times. In addition to open educational resources, MOOCs. MOOCs aren’t new. They’ve been around now for more than a decade, but massively open online courses, Coursera, Udemy, you can take them for free, or you can pay a little extra money, and get credit for them, or with a proctored test or two. In some cases, some of these MOOC classes are offered by famous professors at well-known institutions, and they’ll accept everybody. Not everybody passes, not everybody completes them, but they’re out there, and they’re available.
We’re going to experience population declines in all areas of the country except two, the far West and the South. Some of that has to do with immigration, particularly coming across our Southern border. But other parts of that just happen to do with the weather’s better and people prefer to live there and we’ve got an aging process going on in the Northeast and the Midwest, though those areas are going to experience population declines, and most college students like to go to a college within a hundred miles of where they grew up, or where they live. So if the population is declining for colleges in those areas to either meet their existing enrollment levels, or even try to grow them, they’re going to have to track people from out of state, maybe because I guess more favorable weather people are going to prefer the South and the West. That’s another concern for residents and administrators of colleges in those states.
Two more items. Most states have not shown any willingness or an ability to return to their pre-2008 student funding levels of public higher education. After that recession, the tax revenues declined because people couldn’t afford to buy as much stuff. They weren’t making, people got laid off, the tax revenues weren’t coming in. Higher education is not a mandated benefit like Medicaid is and K-12 education is, so it gets cut. I think the last time I saw a number on this, we had 31 out of the 50 states that are still below their pre-2008 per-student funding level.
Then lastly, the federal deficit is at an all-time high. We have spent and spent and spent. We’ve added trillions to the deficit thanks to COVID. Part of that’s good, we developed vaccines that respond to that much faster than anyone ever thought, but nonetheless, getting Congress in what I would call in a partisan environment to agree on going in and funding, to a large extent, higher-education initiatives I don’t think are going to happen.
Bjorn Mercer: Oh, I completely agree. There’s no one thing that has created the crisis in higher education, but as you said, there’s multiple things. Just going from the top of your list with student loan forgiveness, I was very excited about that because even I would benefit from that. But as it was being explained, just like you said, the underlying issue is not being addressed, so it’s a Band-Aid. It’s a great Band-Aid, and people would benefit greatly from it if it ever takes off again, or if Congress actually agrees to it, which I don’t think they will, but the metrics, and the finances of higher education are not being addressed. To fix higher education, the amount cost, all those things, not just the end result of how much people owe, everything else from the beginning to the middle to the end has to be addressed, so I completely agree with that.
Wally Boston: In my five-part series, which reflected a speech that I was invited to do over the summer, I provided a historical perspective of higher education and zipped quickly through 250 years and got to the National Defense Act in 1958, which really cemented loans as what the federal government was willing to do to provide funding directly to students. Federal government has funded institutions primarily for research, defense research and health research. But as far as directly funding the students, initially in ’58, it was low-interest National Defense loan. In fact, that’s what I had to attend Duke. I think it was 3% interest. Then in 1965, when they put together the Higher Education Act, they did create something. Actually, not initially. In ’65, it was codifying those loans, those National Defense loans. Then the first modification of the ’65 Act in ’72, they came up with a Basic Education Opportunity Grant that had been championed by Senator Claiborne Pell from Rhode Island. Later on, they ended up renaming the Basic Education Opportunity Grant the Pell Grant.
But at that point in time, I think those first basic education opportunity grants were like a thousand dollars or $1,100 fully funded, and a public college tuition was probably about $1,000, so if you attended public school, and were poor, you could get a Basic Education Opportunity Grant, or a Pell Grant now to cover most of the tuition. Now, that doesn’t happen. I think we’re going to be up to about $6,800 on Pell soon, but when you look at the averages for public college tuition, we’re far above $6,800 a year.
Bjorn Mercer: I really liked that you talked about vocational schools. Can you talk a little more about that? I’ve only seen the world in the sense that there’s been very few vocational schools, and I’ve only seen and heard the message that everybody has to go to college, and that’s just not true.
Wally Boston: I think on one of our previous podcasts, we talked about artificial intelligence and technology and how that might influence and affect jobs and it is. I mean, it’s really going to disrupt jobs. One of the things that vocational schools do is they prepare people for jobs that require humans, not jobs that require machines.
The Lumina Foundation’s president, Jamie Merisotis, came out with a book called Human Work in the Area of Smart Machines. One of the things that he outlined in there is that today, half of all jobs in the United States are classified as uniquely human. Just 10 years ago, it was 30% of the jobs in the United States were classified as uniquely human. Now, what you’re seeing is you’re seeing a transformation, thanks to artificial intelligence, of employers really focusing on people that they actually need to do the job because they can’t put a robot in place, or they can’t put software in place to replace people. He [Merisotis] predicts that over the next 10 years, we’re going to go from half to 80%.
What college does, is it prepares us for work using learning that’s a mastery of knowledge. What we really need to do is to learn skills. That’s what vocational education did back in my day. All that training was for a job that you could do right after you graduated from high school, go do it, and not have to go to college, and theoretically, you earn a decent living over time. We need to bring that back. I think there’s just some people that sitting in classes day after day for another four years after high school, which was pretty boring to them, and just not interesting, and admittedly, they didn’t do well, if they can gain skills to be gainfully employed, I think that’s pretty important.
I’d say even though I made a career in higher education, I think that not everybody’s suited for it. Let’s recognize that, and let’s build that into our education system. I mean, Germany’s probably one of the best examples of a country around the world where they have this excellent system that people opt to go into the gymnasium program, which takes them college prep track, or they go into the apprenticeship track, and the apprenticeship track allows them to become master plumbers, master carpenters, lathe operators, whatever. But bottom line is you go into one of those tracks.
By the way, the apprenticeship track in Germany doesn’t necessarily dissuade you from ultimately earning a degree. You’re going to have to do it in a different way because they’ve got a system, particularly at their elite institutions, that are much more geared to taking a student who graduated from the academic track in high school. But there are colleges that are available for people want to be adult learners. Our tracks are a mess. I mean, we reduced the vocational track. It’s shrunk dramatically. We’re not assessing people, we’re not putting in the right pathways. They drop out. Some places try to bring them out.
Just saw a recent study this summer, faculty members, researchers at the University of Virginia’s Graduate School of Education looked at students who attended 28 Virginia Community Colleges who dropped out, and those who returned, and they basically assessed the ones who didn’t return; didn’t return because they didn’t think that there was value in both time and money. You’re talking about the most affordable form of college in the state of Virginia, or just about any other state, which is community college, and yet the people dropped out. That was unsettling, particularly for President Obama probably who in his 2009 State of the Union address said, “There’s 30 million Americans who started college, never completed it. Let’s get them a degree.” Oh, guess what? This study says that the vast majority of the people that didn’t get a degree have no intention to come back.
Bjorn Mercer: It’s tough. Each one of those 30 million Americans has a different story. You provided so many wonderful points. This is going to be the first of several episodes that we have and we’ll go into even more detail in the other episodes. Did you want to say any final words before we end this first one?
Wally Boston: Yeah, I’ll say something about Texas. You mentioned Texas. So, Texas is now the second largest state behind California, but it’s estimated that by 2036, Texas will equal California in terms of its population. I think right now, Texas has close to 30 million residents and California has 42 million. You might say, “Wow, that’s a huge gap to make up.” But Texas is growing, favorable economy, but also despite the fact that the governor gets the press for busing a few dozen immigrants to major cities, the fact of the matter is that most of those immigrants stay here in the state of Texas, so we have a very high Spanish-speaking population. Close to half, I think. That’s fueling the growth.
The state of Texas has actually come out and said, “Okay, we know we’re growing, and a lot of it’s through immigration, and a lot of it is immigration of people from other countries. We need to have an education goal,” and so the state of Texas is talking about credentials at all levels. It’s high schools, it’s students in high school, and they’re rating, you get money here now. You get allocated funds throughout the system, whether you’re a high school, community college, four-year college, or whatever, based on who you take, how you take them, and how far you get them.
It’s all transparent, it’s all published, and they’ll be the first to admit that if it weren’t, for example, as far as four-year degree, if it weren’t for the in migration of people from other states who are college-educated, because we have a robust tech community here in Austin. We also have a robust finance community in Dallas and oil and gas and other industries, in Houston, space industry. If it weren’t for that migration, we’d really be a lot lower in terms of the percentage of college graduates. So they need to get college graduates up, but they also need people to get certificates up. Part of that has to do with training in high school. They’re doing some things here in Texas. I’m sure there’s other states that I can use an example, but this is a state that’s currently second largest in terms of population. They’re saying, “Hey, we can’t just ignore the fact that if we want to continue to be competitive, we can’t have people who are on unemployment, welfare, Medicaid, or whatever. We’ve got to have people who, because of their education and/or training skills can earn a living that makes them taxpayers.”
Bjorn Mercer: Well, excellent. Absolutely wonderful conversation for this first part of Crisis in Higher Education. Today we are speaking with Dr. Wally Boston about the crisis in higher education. My name is Dr. Bjorn Mercer. Thanks for listening.