07/03/2012 11:36 am ET Updated Sep 02, 2012

Student Debt: A Problem But Not The Problem

The U.S. public university system is facing a crisis and much of the discussion centers on student debt. However, student debt is just one symptom of the actual problem confronting universities. I am the president of a private college, but all of my own education, like that of the great majority of Americans, was at state-supported institutions. Our university system was, in my day, the envy of the world. It is still that way now, but unless we do something to address how our public institutions are funded, our country's competitive edge will decline further. How did we get here? The crisis actually developed over several decades. It began some 30 years ago when the federal government severely cut funding to states. States responded by drastically reducing their support of higher education, forcing public educational institutions to look elsewhere for funding. Raising tuition was a partial solution, one made easier by the availability of student loans. But shifting the cost burden onto the backs of young men and women simply postponed the crisis. It didn't cause it. It was caused by decreased levels of state funding. The kind of good higher education that our country is known for is not cheap. It uses highly skilled labor and requires expensive equipment and facilities. When government stops subsidizing it, most of our citizens can't afford it. It's that simple. Decreased funding is the central problem, and it is time we start talking realistically about how to solve it. Yes, tuition has risen to unsustainable levels. Yes, student debt is too high. Yes, universities need to become more efficient and keep a sharp eye on the bottom line. But higher education can tighten its belt to the bone, and the problem will still remain. And, state legislators are unlikely to find much more money for higher education. Further, although our citizens value higher education, it is doubtful they will vote for increased taxes to pay for it. Our political leaders and their constituencies decided they didn't want the state to continue to pay the cost of a good higher education. We have a product we can be proud of, a product everyone wants, but a product no one has the ability or the will to pay for. And very few honestly admit this simple truth: you can't have the same product if you don't invest in it. Either education has to genuinely change -- and become a very different product from the one that made us the most competitive nation in the world -- or we need to find some other way of funding it. Unless the conversation turns to the real issue (rather than focusing on mutual finger-pointing), we will not solve the problem -- and our country and our citizens will be the poorer for it. We need to stop blaming and start looking for solutions. Here are a few simple ideas:
  • Acknowledge that the success of American public education has helped make the U.S. envied in the world, and commit to keeping it that way.
  • Improve education efficiencies. Public dialog to the contrary, the higher education business model was recently rated as "generally sound" by Moody's (Investment Report, January 2012), but more efficiencies must be found.
  • Recognize the new funding reality. Stasis, or even declining public funding, is becoming a fact of life. Universities need to expand their revenue options, which include private philanthropy, partnerships, and entrepreneurial ventures, while ensuring that any such expansions are consistent with their core mission (the faculty are the guardians of academic quality and their consultation on this point is crucial).
  • Change the governance structure. Public higher education needs better governing boards. Political appointments too often do not lead to the high-skill, well-informed governing boards needed in this new economic environment. Boards need a breadth of skills and experience, but most importantly need members who truly understand higher education. It is not just another business, and treating it like one will affect academic quality.
  • Modify the structure and amount of student loans to better match the earning potential of graduates.
These are just a few ideas. If we begin to focus on the real problem, more ideas will surface. But we must first recognize how we got here in the first place, and we must be steadfast in our determination to preserve our outstanding public education system.