05/29/2009 05:12 am ET | Updated May 25, 2011

Higher Education Can't Be a Discretionary Expenditure

The fiscal crisis changes things for everyone in the U.S. - including higher education, which is my area of work. I've seen it firsthand. For the past few months, I've been working with education leaders in 11 states on a project called, Making Opportunity Affordable, funded by the Lumina Foundation.

Few if any of us foresaw the incredible economic collapse that has imperiled millions of workers and families here and abroad, and that indeed threatens the very foundations of nations whose failure was unthinkable. "It can't happen here." But it did.

As we consider the effects of the economic crisis on state governments, a key question has emerged: Where does this leave higher education? There was a time when that question would have been answered in what has become a perfunctory way: reduce enrollment or limit growth, and raise tuition without increasing financial aid. Unfortunately, for too long, higher education has been viewed by state leaders as a discretionary expenditure. That mindset is no longer viable and has to change if we're going to meet the challenges of the 21st century.

President Obama has identified higher education as critical for our country's economic well-being in the 21st century. In both the stimulus package and the 2010 budget, he pledged significant assistance to make postsecondary education available to everyone. The president has asked all adults to participate in at least one year's education beyond high school and asserted that dropping out of high school is a dis-service to the nation. He continues to push his vision for higher education. Even in his "Tax Day" speech, the president addressed his agenda for college:

[W]e are helping Americans get the education they need to succeed in a global economy. For years, we have seen the price of tuition skyrocket at the same time that it became more and more important to earn a college degree. That is why we are making college more affordable for every American that needs a hand. That is why we are committed to simplifying the student loan process so more families can get the help they need. And that is why our $2,500 tax credit for all four years of college will help us reach a goal that will help our country lead in the 21st century: by 2020, America will once again have the highest proportion of college graduates in the world.

The president's goals are our goals. But, the states have a large role in determining exactly how stimulus money will be spent. More important, they determine whether support of higher education is a budget priority.

At the very time we want to make higher education affordable, extend opportunities to greater numbers of women and men (including many who are already in the workplace but lack 21st century skills and knowledge), and increase the productivity of colleges and universities (through re-allocation of spending and new approaches to teaching and learning), higher education is threatened by lower appropriations at the state level.

Policymakers tend to tolerate institutional responses to revenue cuts on the margin, instead of asking that inefficiencies and opportunities for greater cost-effectiveness be addressed across the postsecondary enterprise. This pattern of behavior is both historical and current, despite the growing imperative for the nation to act urgently and more boldly in its development of human talent.

Even if there were no financial crisis, efforts to reform higher education would still be important because of the nation's changing population and accumulated layers of social inequity that have developed over the past half century.

But there is a financial crisis -- not just another downturn in the endless economic cycle of good times and bad -- and this makes our work even more important. Here are three critical higher education issues that can help states achieve the goals we have to meet. These issues have become critical for our nation's long-term economic well-being and, as such, should become part of a broad policy discussion.

1. Increased attainment: more people with college degrees and other credentials.

We need to give people opportunities to acquire more sophisticated work skills so this nation can reclaim intellectual -- and especially scientific and technological -- leadership in the world. We cannot flourish as a large consumer-driven economy that buys more than it sells. We need to act quickly so people will have jobs that are collectively and individually productive, so they can care for their children and families, and participate in the civic activities of a democratic nation. We need to expand our language and our agendas to focus on all postsecondary credentials, particularly those at the sub-baccalaureate level. A fixation on bachelor's degrees does not respond to the reality that "middle skills" jobs are the nation's fastest-growing path to greater opportunity and mobility.

2. Reduced unit costs: more of the right credentials -- the ones that result in personal and collective economic well-being -- at a lower average cost per credential.

We need to increase attainment with little or no new money, while spending less money on average for each degree or other credential. Our nation will not recover quickly from its financial crisis and, when it does recover, we will be part of a different global economy. Except for stimulus funding, higher education will not see large appropriations increases in the foreseeable future, and should not expect to be funded at the same level per credential for the results it is called to produce. But if we do not act quickly to re-allocate money and introduce new approaches to teaching and learning, our economic recovery will be slower and more difficult.

3. Outcomes assessment: measuring whether we are meeting the needs of students, states, and the nation.

We need to ensure that students are learning what they need to know. There will be a temptation to dilute quality in order to reduce unit cost. No one wants to do it but someone will. States should adopt assessment procedures that are based upon the good work that has been done over the past decade (for example, the National Survey of Student Experience, the Collegiate Learning Assessment, and WorkKeys). They should enter into discussions with the European nations about their efforts to establish a multi-national assessment process (the Bologna Process).

Higher education is a national priority and increasing completion rates is an absolute necessity for our economy. The President has issued a challenge to increase graduation rates to unprecedented levels. He's doing his part. Now, the states and higher education have to do their part. It is not an understatement to say that our country's future depends on it.