Bill & Melinda Gates Foundation Postsecondary Success

April 1, 2016

Pennsylvania Association of Councils of Trustees Remarks

April 1, 2016

(As delivered)

Good morning. You know, my eldest is headed to college in the fall and the whole admissions process has ironically brought many of the issues I deal with from my foundation perch to my dining room table.

An American Success Story

During this process, I’ve been struck by how much our expectations of higher education have changed in a generation.

A personal story: I grew up in Rochester, New York at the tail end of the Baby Boomer generation and attended a large, diverse, urban public high school in which a majority of students qualified for free or reduced lunch. Maybe 20 to 30 of the 350 students in my graduating class went on to a four-year college. Perhaps another 40 went to community college. Going to college was the exception, not the rule. Most went right to work at places like Kodak or Xerox—jobs that at the time afforded entry into the middle class.

Flash forward just a generation, and the world is fundamentally different. The jobs for high school graduates at Kodak and Xerox are largely gone. A high school education alone is not a ticket to the middle class—it’s a sentence to the minimum wage. That’s why in survey after survey, the vast majority of parents—rich and poor, black, white, and brown –see college in their children’s future.

I saw this in my son’s experience. He, too, attends a large, diverse, urban public high school where a majority of students qualify for a free or reduced lunch. At his freshman orientation, I remember looking on at him sitting in the school gym with 450 of his new classmates. A counselor asked, “How many of you are going to college when you finish high school?” And what do you think happened? Most of the hands went up. Because that is their aspiration, a part of their American Dream.

That aspiration grows out of one of the greatest success stories in American history. Faced with unprecedented opportunities and threats, we as a nation opened the doors of public higher education to millions of Americans. States built scores of new campuses to serve them. In short, higher education became a bridge to opportunity and we built a new middle class.

I am encouraged by the progress we have made. I’m in awe of it.

Our progress is evident in the diversity of our student body, which is evolving rapidly to more closely reflect the diverse people of this great country.

Our progress is evident in the fact that college access and college completion have emerged as key issues on the national agenda. Who would have imagined a decade ago that the president of the United States would call us to action on college attainment, or that presidential candidates of all persuasions would offer competing visions of higher education—deeply concerned with attainment, workforce development, and above all student debt?

A Fork in the Road

At the same time, our progress has brought us to a fork in the road.

Demand for education after high school has never been greater because higher education is THE ticket to the middle class.

There is a new majority of students on our campuses. The days where the average college student was 18, living on campus, and going to school for four years are long behind us—if they ever really existed. Today the majority of students work while going to college, many of them full-time. Four in ten of our students are 25 or older. Together with first-generation college goers, and low-income and non-white students, they are the face of higher education.

They are students like Katherine, a sophomore at Johnson C. Smith University in North Carolina. Katherine overcame long odds as a foster child to even make it to college. But she did make it and is now thriving because of the mentoring and support she receives there.

And they are students like Shawn, who is studying online at Rio Salado College in Arizona. Shawn came back to college after dropping out and enduring a series of low-paying jobs. He is balancing his studies with the responsibilities of fatherhood and work, which makes the flexibility of Rio Salado a good fit for him.

But while the face of our student body has changed considerably, the educational experience largely has not. That is at least part of the reason why nearly half of the students who begin a college education in this country fail to complete one. The system as a whole is not built for them. It is not built for students like Katherine and Shawn.

We have to do much better, meeting today’s students where they are and helping them get to what’s next. This new student majority brings high and often fragile aspirations to our institutions, and too often, our institutions are not equipped to meet them.

And meeting them where they are is not just an equity issue, it is an economic one as well. By 2025, 65 percent of the jobs in this country will require some form of a postsecondary credential. Today only 40 percent of our adults have one. That represents 11 million more credentialed workers by 2025 than our colleges and universities are capable of producing at current rates. 11 million. That’s a compound annual growth rate of 5 percent a year in the number of credentials being produced. Who here hails from a campus that’s even targeting, let alone achieving, that level of productivity?

Meeting that need will require a “both / and” approach. We must both enroll more students and graduate more of those who attend, especially among the new majority of students.

Meeting that need also demands that we face an inconvenient truth. Today, educational opportunity and attainment are correlated with socio-economic status. Higher education, once heralded for its potential as a great equalizer, is increasingly reproducing privilege in this country.

Students from wealthy families are eight times more likely to earn a bachelor’s degree by age 24 than students from low-income families. That’s unacceptable. It’s also unsustainable if the nation is to meet its economic development goals.

These are more than numbers. They represent people like Katherine and Shawn. And they represent decisions with consequences. Where is the nation going to get talent for its increasingly knowledge-driven economy? What will a widening rift between haves and have-nots mean for social cohesion?

The bridge to opportunity that is higher education has become too narrow, too hard to navigate, with a toll that is too high for too many. We have reached a time for decisions about how and for whom we deliver, fund, and measure higher education. And you, my friends, are in a position to make those decisions.

Those decisions will have a real impact on the America we will see in 2025. Higher education will either serve as the bridge to opportunity and a better life for more Americans, or it will stand as a barrier to opportunity, reinforcing privilege, driving a wedge between the haves and have-nots.

I’m a historian by training, so I am more familiar with studying the past than predicting the future. But the trend lines are clear. If we fail to consider the possible outcomes of our action—or inaction—we will be shaped by our future rather than shaping it.

Two Americas

I see two scenarios for the nation looking ahead to 2025: one in which we have met our higher education opportunities and challenges with innovation and a commitment to quality and to equity, and one in which we have allowed self-satisfaction and the politics of the status quo to prevail at the expense of economic development and social mobility.

In the optimistic scenario, a majority of Americans have a post-high school certificate or degree. There is no gap between what our higher education system produces and what our workforce needs. And race, income, gender, and zip code are no longer predictors of educational attainment.

Where will that leave us as a nation? It will leave us healthier and stronger, more engaged and less saddled with debt. Because all of these things are associated with increased educational attainment.

Now, for the other scenario: it is one in which 2025 arrives and our post-high school attainment rate has not budged from today’s levels. Employers with high-skill jobs are so desperate for workers to fill them that they move their operations across state lines or to other countries. The likelihood of getting a certificate or degree depends more than ever on your race, your gender, your income, or your zip code.

And the consequences? We will be a poorer and a less secure country, with more underemployed people scrambling to make ends meet, less engaged, deeper in debt, and more divided than ever.

Extreme scenarios? Perhaps. But they are rooted in today’s realities. Our economy is changing. The face of our society is changing. And a higher education system that celebrates who it keeps out as much as who it lets in simply won’t cut it in the world that is unfolding.

What It Will Take?

So how do we navigate toward the more optimistic path? Of course, there are no silver bullets or simple answers when it comes to transforming higher education. But years of work, research, and trial and error underscore two imperatives that must be met for higher education to remain a bridge to opportunity.

One is the need to dramatically increase student success rates, especially for the new majority of students I described earlier.

The other is to introduce these changes in ways that ensure the financial viability of our colleges and universities. Let’s face it: demand for higher education is not perfectly inelastic. Competition for public funds is intensifying, as you know better than most. And we cannot keep pumping the tuition well at the rates of the past two decades. Something has to give. We must look carefully and creatively at the revenue and the spending sides of the ledger.

So what will it take to meet these equity and sustainability imperatives? Three things: incentives, solutions for institutional transformation, and, finally, a word about systems.

Let’s start with incentives, and I’m going to speak to money and measures. With regard to money, we need a simpler federal aid application process, specifically, the FAFSA. FAFSA as it is stands is a barrier for two million students a year. Even assuming the worst (lowest) graduation rate that applies to high school graduations from the lowest income quartile (10 percent), these 2 million students represent a big step forward on the way to 11 million credentials!

It also means public funding regimes that tie funding levels to institutional performance and that use measurement formulas that reward rather than penalize colleges that seek to enroll and graduate high-need new-majority students. Preliminary evidence from Tennessee and Ohio show that outcome-based funding, if implemented well, will drive performance.

With respect to measures, we need better data—data to empower students, educators, and policymakers in their decision making. Higher education is a half-trillion dollar enterprise, and yet there are critical questions about cost, outcomes, and value that can’t be answered because the data are not available.  And until we connect our student records from high school and colleges, we can only really guess about the education policies and pathways that work best. These data issues are complicated but they can be addressed at regional, as well as at state and national levels.

I want to dwell longest on solutions for institutional transformation because there are real gains to be had there. There is a small but growing number of colleges that are systemically adopting high-impact solutions to transform their education and business models so they can sustainably enable many more new majority students to acquire affordable, high-quality credentials.

These solutions are increasingly well known (which is good—it means you don’t have to make them up!) and we are seeing the higher education community begin to coalesce around them. Technology is one. It is making teaching and learning smarter, empowering but not supplanting faculty and advisors, helping them to be even better in what is and will continue to be a fundamentally human and social endeavor: education.

With blended learning, the University System of Maryland is doubling students’ chances of completing “weed-out” developmental and general education courses. Data on the effectiveness of online learning are now pretty commonplace. The question is no longer whether online learning can return as good results as on-the-ground learning, but rather how to support faculty most effectively in what is a whole new and more effective approach to teaching and learning.

Using integrated planning and advising services (or iPASS—another technology), the Tennessee Board of Regents is improving retention and graduation rates across its campuses. They are using predictive analytics to guide students toward certificates and degrees. iPASS platforms provided by Civitas, EAB, Starfish, and others are supporting advisors and faculty as they help students plan their educational journeys. The platforms include dashboards and degree maps that help in selecting courses and tracking progress—even raising flags on things such as missed registration, weak academic performance, or financial aid deadlines.

Highly structured credentialing pathways that students follow into and through college: another solution. Yes, college is about exploration. But getting lost is not exploration, and too many of our students—especially those from the new majority—are getting lost.

Look, our students come to us through many doors. Some of them are not completely ready for college-level work. Some of them do not come directly from high school. Some come with credits from one or more institutions. They need help plotting their course. And too many times we have failed them, effectively handing them a catalog and saying “good luck.”

We can change this using iPASS.

We can change this by reforming developmental education—a road out of college for too many. Leading associations, as well as at least 19 states and 16 funders, have adopted and are now advocating evidence-driven core principles for reforming developmental education.

We can change this by implementing credit transfer policies that reduce the amount of re-work students have to do when they change institutions. Nearly 40 percent of all students attend more than one institution on their way to a credential. Some of them lose a semester or more worth of credit from their former institution. That is unfortunate and unfair. And it is something we can change, as we know from experiences in Florida based on its Common Course Numbering System.

And while each of these solutions is powerful, it is their integration and scale that make a real difference, a transformational difference. Look at institutions like Arizona State University, the University of Central Florida, Georgia State University, Miami Dade College, and Delaware State University.

Each of these institutions has committed to maintaining and improving access and success for new majority students and is making real progress. Georgia State has gone so far as to eliminate attainment gaps between rich and poor, black, white, and brown.

And there’s more. At these institutions, student success is tied directly to institutional sustainability.

With online learning, Central Florida added 30,000 students, increasing tuition revenue without incurring what would have been $400 million in capital costs.

Arizona State achieved such great scale. It was able to drive down per student educational expenditures to about half of what it is at other leading research universities.

Miami Dade College will use data from their planning and advising system to make better use of their instructional resources, improving efficiency and service to students.

But here’s the thing: we need a lot more Georgia States and Arizona States and Miami Dades. Yes, we need scale within institutions. We cannot pilot our way to meeting our nation’s educational needs. We need scale across the industry. Not every institution is going to contribute to the 11 million additional credentials, but a whole bunch are going to have to step up.

And this is where I come to systems. High functioning systems can make a difference in advancing these efforts. Systems can create efficiencies and economies of scale. I saw this first-hand in my years at the University of California, which leveraged a strong credit rating to mount a strategic investment initiative, building needed infrastructure at a lower cost than if it was pursued campus by campus. The University of Georgia System is also introducing efficiencies in the interest of student success through campus consolidations.

Systems can also spark and sponsor innovation. I mentioned earlier the University System of Maryland and their work on online learning. The system issued the charge to redesign key introductory courses and has supported faculty collaboration across campuses to get the job done. OpenSUNY is a bigger more comprehensive effort systemwide approach to online learning, still in its early stages. While it can be difficult for systems to provide direction without being directive, I believe Maryland and maybe SUNY show that it is possible.

Even more importantly, systems can help to scale innovation. The Georgia State University System and the Tennessee Board of Regents are demonstrating this through their adoption of a reformed approach to developmental education. In both cases, sparking innovation at selected campuses bubbles up to the system level—which then uses policy levers to scale what works.

Systems also provide collective voice in the policy advocacy realm. There’s an old saying that there is safety in numbers, and it is particularly true when it comes to higher education. As difficult as it can be for multiple institutions to speak with one voice, that will become ever more important in an era of intensifying competition for public priority and resources. We’re seeing that in Texas, for example, where systems and campuses combine in the Student Success Council to guide a promising outcome-based funding policy through the state legislature.

To achieve the industry-wide transformation that the nation requires, I believe we will have to look to our existing systems as agents of change an innovation—just as we look to Tennessee, Georgia, Texas, and Maryland. We will also want to look at a whole new breed of systems—coalitions, really—which innovators are forming to support and accelerate their progress—groups like the University Innovation Alliance, Completion by Design, and the Yes We Must Coalition of tuition-dependent colleges.

Which brings me to a closing question. I believe it will take a movement to widen and strengthen higher education’s bridge to opportunity, to make it more accessible and more navigable. That is why I am so excited by the energy and the focus of those of you gathered in this room. It’s why I came here today to ask: “Are you ready to join or even lead that movement?”

What does that mean?

It means sending a clear message that we as a nation are at a fork in the road when it comes to higher education. We will either innovate and make the hard choices necessary to expand opportunity and increase student success, or we will watch higher education become a wedge between the haves and the have-nots. You as trustees are messengers. We need your help carrying that message.

It means redefining prestige in terms of how many students make it on to and across the bridge, rather than how many we turn away. In other words, measuring our success not in terms of who we exclude, but in terms of who we include and how well they succeed. For trustees, this starts with data—do you really have the information you need to gauge your campuses’ performance and success?

It means pursuing aggressive goals for sustainably increasing student access and success. I’m talking about eliminating—not just reducing—attainment gaps across race, socioeconomic status, and gender.

It means implementing proven solutions at scale in order to achieve those audacious goals. I’m talking about reaching tens of thousands—not hundreds—of students with proven innovations. Scale is not a question of skill—it is a question of will and leadership. It demands a coalition of the willing, and today I am asking you: “Are you and the institutions you lead willing?”

Many institutions—perhaps some of yours—are not prepared to answer that call. Perhaps they can sustain themselves on endowment funds, out-of-state students, and high-priced graduate and professional programs.

But many are answering the call because they have to—their futures and the futures of their communities and of their students depend on it. Our vision is that those who answer the call will serve as beacons for others who wish to follow, sparking an interaction effect that will transform this industry for the benefit of our students and for the good of our country.

The road to 2025 will not be paved with bold proclamations from people like me—it will be paved with the actions that you and your institutions take every day that reflect your data, your values, and your priorities, and that will draw on the distinctive insights that you bring as trustees and as leaders.

As I noted earlier, I’m a historian by training. And I’ve observed that moments of true transformation are about convergence—the combination of people, ideas, and time. I believe that we have the people. We have the ideas. And now is the time. So let’s get to work.

Thank you.

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