Trends for Post-Secondary Education Opportunities

To maintain higher education opportunities, particularly for low- and moderate-income students, greater resources must be made available to students through financial aid programs to pay for the higher tuition. Proposed changes in federal support for financial aid programs will increase the financial burdens on low- and moderate-income students and exacerbate the growing problem of inadequate access to postsecondary educational opportunities.

These trends—declining per-student awards, rising enrollment, and growing college-age populations—have disturbing implications for states. At the same time, the African American population as a percentage of the college-age population is increasing rapidly. High school dropout rates are terrible. Black students who are disproportionately poor and low-income face significant financial barriers to attending, another pressure to increase spending, not reduce it. Once enrolled, these students are more likely to drop out for a wide variety of reasons, including financial reasons.

The political economy of the higher education system points to ever-increasing costs of operating costs, perhaps even runaway costs. But the political economy of state and national governments points to static or declining public spending for higher education. Therefore, any list of “salami tactic” cuts (closing campuses, freezing salaries or eliminating departments) would not be strategic or make sense. Instead, the recommendations should seek a structural change in the political economy of the higher education system. Reforms are needed to shift incentives, priorities, and responsibilities to stimulate self-generated cost control and quality improvement.

Five Principles for Better Value: Summary Recommendations

Principle 1. Target public subsidies directly to people in financial need. Under this proposal, need-based financial aid for low- and moderate-income students would nearly triple, thus providing access to higher education opportunities for more students.

Principle 2. Use competition as a tool to align institutional self-interest with public interest. The scheme proposed here would put the lion’s share of state education funding in the hands of students and force higher education institutions to compete by providing high-quality educational services that meet the needs of consumers. In addition, efficiency and innovation would be fostered through competition to meet performance targets within the two systems.

Principle 3. Allow the prices of public services to reflect the real costs, including the social costs of individual decisions. Tuition would be allowed to increase to reflect the costs of instruction. These increases would be offset by the availability of increased state grants and lifelong learning grants allocated to all students.

Principle 4. Fulfill more public responsibilities through non-governmental communities where people already have relationships with mutual obligation. The proposed system would include a comprehensive information, education, and outreach effort, in partnership with communities trusted by low-income and African-American students.

Principle 5. Consider long-term economic growth as one of the objectives of state spending. The renewed commitment to producing well-educated post-secondary graduates for lifelong learning and to funding the necessary research will sustain and revitalize the economy.

Long-term recommendations

1. Each state must establish incentives for students and their families to save more for higher education. For example, a Learning Savings Account could be established for each student, the earnings of which would be free of state taxes. These savings accounts could match Lifetime Learning Scholarships awarded by the state. The existence of such a savings account for a student would not count against the student’s eligibility for financial aid. Since the purpose of Learning Savings Accounts would be to provide educational opportunities for students, the funds could be used at any institution of higher learning, in-state or out-of-state.

2. A substantial portion of the funds allocated to institutions must be distributed based on performance of state policy objectives. By putting a percentage of total funding in the hands of students, our proposal builds on a process for producing institutions that deliver the results individual students seek. Another form of accountability is needed to track the performance of those results that pertain to the interests of the state as a whole. Ultimately, legislators and other policymakers must be able to answer the question: Is higher education delivering the results that the state seeks to “buy” through its legislative appropriation? To answer the question, policymakers must define what results they expect the higher education system to produce. Next, the state will need a robust set of outcome measures that measure the effectiveness of institutions in achieving the results. It is important that the focus is on outcomes (for example, the ability levels of students completing programs) and not on inputs (entering student grades) or process measures (student/teacher ratios). . The delicate task of composing and defining an initial set of outcome measures must be addressed early. Such measures need to be shaped by professional educators, but also by a broad spectrum of higher education users and early users. Citizens of sectors with relatively few post-secondary students in the past, but with expected increasing numbers in the future, should especially solicit your views. Among such sections are communities of new immigrants, young adults from low-income families, older adults with “lifelong learning” needs and desires, and citizens without English as their first language or the United States as their mother culture.

3. All directors of the higher education enterprise should be held accountable for the performance of their respective responsibilities. Governing boards should be empowered to govern the systems; administrators must have the authority to operate campuses effectively; and faculty members must have the freedom to provide quality learning opportunities for students. All faculty contracts must be related to the performance indicators and policy purposes identified by the legislature making the assignments. A system of merit increases should be reinstated to recognize individual and team excellence in the delivery of higher education services.


These recommendations, while controversial, would ultimately lead to better learning opportunities for students and improve the efficiency and cost-effectiveness of higher education systems, ultimately allowing each state to provide its residents with more and better education services. higher education at a lower cost.

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