November 24, 2011

The Obama administration may one day be enshrined as one of the great stewards and innovators of K-12 education. Administration policies driven by the Race to the Top competition have inspired millions. Unfortunately, the same visionary leadership has been absent when it comes to higher education, where the need for innovation and reform may be even greater than in U.S. primary and secondary schools.

While postsecondary education costs have risen at more than twice the rate of inflation over the past 30 years, the U.S. graduation rate from associate-degree programs is abysmal — less than 30 percent — and the national graduation rate from four-year schools hovers around 50 percent, according to the National Center for Education Statistics. That is significantly worse than U.S. high schools perform, with a graduation rate of approximately 70 percent. In effect, the K-12 students we have worked so hard to graduate are being sent to a new set of dropout factories.

Arne Duncan, who ran Chicago’s public schools before becoming secretary of education, has a distinct vision for reforming K-12 schools. His policy toward higher education, however, is less clear. Instead of racing to the top, the postsecondary discourse the past two years has been dominated by “negotiated rulemaking” — a regulatory process to reinterpret the 2008 Higher Education Act — and the “credit-hour rule,” which has institutions awarding course credit based on time spent in class rather than on actual material learned. President Obama talks about graduating an additional 10,000 engineers and doctors each year and regaining America’s status as the world’s most educated nation, but where is the coherent strategy to execute this vision? Community colleges and state institutions that rely on state and local funding are experiencing severe budget cuts. To survive, institutions are responding by limiting access — in some cases even shutting medical schools or limiting enrollment in high-demand areas.

Duncan’s K-12 successes are the result of a tough, 15-plus-year debate within the Democratic Party around charter schools, standards and choice. The education reform movement evolved from a groundswell of organizations such as the Knowledge Is Power Program, Achievement First, Teach for America and other innovative groups. These innovators proved it was possible to build better models and encouraged the development of standards to adequately compare traditional K-12 schools to them. Duncan combined these concepts into Race to the Top and related programs.

The equivalent evolution, however, has not occurred in higher education, despite increasing evidence that national economic competitiveness hangs in the balance. The 2010 study “Academically Adrift” showed that 45 percent of students learn nothing (or, at least, nothing that can be measured) in their first two years of college. Meanwhile, graduation rates continue to stagnate, while tuition has nearly doubled over the past decade. State budget cuts are on track to grow, which will exacerbate these trends.

Part of the reason higher education policy has not evolved is that most policymakers attended elite schools — private research universities such as the Ivy League colleges or flagship state institutions whose sports teams are widely watched every Saturday.

America’s research universities and flagship public schools — the top 5 percent of U.S. universities — represent a vibrant and critical segment of our economy and the nation’s intellectual life. But these elite institutions are ill-suited to address the president’s goal — and our nation’s need — to educate tens of thousands of students as engineers, doctors, nurses, accountants and manufacturing managers. For example, Yale estimates that it would cost half a billion dollars to add just 800 students in two of its residential colleges.

Fewer than 5 percent of Americans attend the nation’s elite schools. There are more than 6,000 accredited institutions in the United States. The mission for the “other 95 percent” differs from that of the elites. Americans overwhelmingly enroll in higher education to get jobs, and politicians overwhelmingly fund higher education as a means to drive economic development.

Because of our national obsession with the elite schools, politicians and most higher education lobbying groups are focused on investing in things that elite schools measure — research, real estate and rankings. But none of those measures has a material impact on student learning or outcomes that will drive jobs. The result is an unacceptably high dropout rate, and those who do graduate frequently lack crucial skills.

It will be hard to create standards in higher education — perhaps harder than the generation-long process in K-12. But the creation of outcome-based measurements of success is critical for the almost 18 million students who attend non-elite schools each year — along with efficient allocation of the $100 billion in annual direct and indirect government subsidies to higher education. These 18 million students need to get a strong general education, graduate in a timely manner and receive training in program areas that underpin the modern economy. Focusing on the other 95 percent of college students is our next national imperative in education.

The writer is a partner at University Ventures Fund, an education-focused investment firm.