Leaders and Laggards: Report Examines Postsecondary Education

June 20, 2012

The nation’s colleges and universities must do a better job of closing the growing divide between the education and skills of the American workforce and the needs of employers, according to a new U.S. Chamber report, Leaders & Laggards: A State-by-State Report Card on Public Postsecondary Education.

Projections of labor market demand show that two-thirds of all jobs will require some postsecondary education by 2018; however, given today’s disappointing levels of higher education productivity, labor economists estimate that the United States will fall 7 million degrees short. The nation’s youngest workers rank a disappointing 15th out of 34 industrialized countries in the percentage with a college diploma.

While the United States has some of the world’s greatest institutions of higher learning, a comprehensive review of public colleges and universities across the country shows that the system is far from elite. “It’s time for state systems and colleges themselves to take a hard look at how they spend public money, how best to measure the quality of the education they provide, and how to promote student success in the absence of additional funding,” says one of the report’s lead researchers, Andrew P. Kelly of the American Enterprise Institute.

Leaders & Laggards, released in June by the U.S. Chamber’s Institute for a Competitive Workforce (ICW), focuses on the performance of public colleges and universities. It follows a similar 2007 report on K–12 education and grades state performance and policy in six main areas: student access and success, efficiency and cost-effectiveness, ability to meet labor market demands, transparency and accountability, policies for promoting degree completion, and innovation in instruction methods. The study was limited to four- and two-year public colleges and universities.

Outside the top three states, in which about 70% of first-time freshmen finish a degree in six years, statewide completion rates at four-year public colleges typically hover around 50%. Meanwhile, tuition rates have grown at three times the rate of inflation in recent decades, prompting students, employers, and policymakers alike to question how efficiently and effectively institutions of higher education are using the precious resources made available to them.

Measurement of success and outcomes is particularly lacking, according to the report. Just 22 states track the success of graduates once they enter the labor force, and only 4 states measure and publicly report how much college students learn in a way that allows outcomes to be compared across states. “Without these measures of quality, it will be difficult for states  to ensure that their investments in postsecondary education are paying off,” says Cheryl Oldham, vice president of ICW.

The hope, says Oldham, is that state leaders can use the report to craft a reform agenda that best fits their needs and aspirations. “For its part, the U.S. Chamber intends to do whatever it can to advance the reform agenda outlined in the report.” 

Five Recommendations for Improving Postsecondary Education

Leaders and Laggards suggests that when addressing higher education issues, state policymakers should seek solutions that match state priorities, embrace transparency, and focus on performance, not inputs. With this broad approach in mind, states should take the following reform measures:

Promote degree completion. States should move away from enrollment-based funding formulas and instead require that some portion of each institution’s base funding is tied to timely degree completion. States should also remove obstacles students often face when transferring credits between institutions.

Improve measurement of postsecondary quality. States must find better ways to measure not only the quantity of degrees but also their quality. This can be done by linking postsecondary data to employment and wage records collected by other state agencies and assessing student learning in a systematic and comparable way across institutions.

Promote efficiency. Producing more quality degrees for the same amount of public investment and maintaining current levels of productivity in spite of reduced state revenues are two approaches that increase return on public investment.

Improve transparency. Colleges and universities are too often reluctant to provide data that would allow consumers to compare their performance with that of other institutions. State leaders should take steps to more systematically measure degree completion, the value of degrees in the marketplace, and how much those degrees cost the public.

Increase openness to innovative education models. Traditional colleges will be hard pressed to produce more degrees at the same cost without introducing new modes of delivery. States should actively test new approaches, such as online learning or blended learning, which combines traditional classroom teaching with technology-based instruction. Policymakers should ensure that regulatory barriers do not impede students’ access to innovative and worthwhile programs.

By Sheryll Poe, Senior Writer, U.S. Chamber of Commerce