The American Dream is built on the promise that individuals from all walks of life can find success and prosperity here. That dream has taken some hits recently and the rising cost of college tuition is part of the problem. As we dive into the new year, it's time to put the issue of college productivity and affordability under the microscope.
As the head of the nation's largest private foundation focused on increasing the number of college graduates, I can tell you that America's economic future hinges on getting tuition under control and significantly increasing the number of citizens with postsecondary degrees. That's the message that we've shared recently with President Obama and in testimony before members of Congress. But, the solution involves all of us. Here's why.
Research shows that more than 60 percent of American jobs will require some form of postsecondary education by 2018. Unfortunately, only 40 percent of American adults currently have an associate or bachelor's degree. That's a big gap and it's even more troubling when you consider that 63 percent of young adults in South Korea have a two- or four-year degree.
In decades past, the U.S. ranked first when it came to educating its citizens. We produced enough graduates to meet the needs of employers and our economy was the envy of the world. Today, we have dropped all the way to 15th in the global college-attainment level of our young-adult population. While unemployment hovers at nine percent nationally, employers are still struggling to find enough workers to fill the skilled positions that they need to grow.
Our decline in this regard corresponds with a dramatic increase in what it costs to earn a college degree. Tuition has outpaced inflation for nearly three decades and the price of obtaining a degree is now prohibitive for far too many Americans. To address this crisis, our higher education system must change.
To increase productivity, institutions and systems must find ways to graduate significantly more students while controlling costs and delivering high-quality degrees. We believe that part of the solution lies in performance-based funding that rewards institutions not for the number of students they enroll, but for how many of their students succeed.
For example, Tennessee is distributing 70 percent of its higher education appropriations based on results and quality rather than enrollment. And student performance incentives, such as the strategic use of tuition and financial aid to encourage students to stay in school and complete their programs as quickly as possible, are also proliferating.
Identifying business efficiencies is also important. In Ohio, more than $900 million has been saved by public colleges and universities over the last few years by implementing the joint purchasing of products and services. These innovative ideas, and more like them, can deliver the savings that will allow more students to graduate at a lower cost.
We must also find more creative ways of leveraging technology. Research shows that prospective college students and their families still find it difficult locating information about college, and particularly the availability of financial aid and grants. We recently announced the winners of our NextGen planning grants and now six college access organizations are developing innovative technology solutions that will help students gain easier access to information about paying for college and applying for financial aid within college admission.
Employers also have an important role to play. It's not enough to sit on the sidelines and clamor about how higher education institutions aren't delivering all of the skilled workers that are required. Employers must become more active and committed advocates for federal and state policy changes and they must offer programs that can more effectively address the skills gap.
We encourage employers to join the national Goal 2025 movement that aims to have 60 percent of Americans with high-quality degrees and credentials by the year 2025. Other ways employers can help include: offer generous and widely accessible tuition-reimbursement plans to employees; make space available to local colleges and universities to offer on-site classes, and work directly with employees who started on the path to a degree but never finished.
Many employers are surprised when I tell them that there are more than 37 million adults (age 25-64) in America that have earned some college credits but lack a degree. That group represents nearly 12 percent of our country's adult population and, if we can find ways to help them earn their degrees, we can tap into a new resource of human capital that our nation desperately needs.
To regain our standing in the world, and to restore the American Dream, we must keep college within reach by streamlining costs and reducing tuition. If we can achieve that goal, we can strengthen our economy, grow jobs and improve the earning power of more Americans.