Breakingviews – Guest view: U.S. universities need some self-study

MIAMI (Reuters) – Even before the pandemic, America’s colleges and universities were in crisis. Over the last 20 years, tuition costs have soared, student debt has ballooned, state funding has declined, and the longstanding public support enjoyed by higher education has eroded. It’s time to question long-held orthodoxies about the nature and purpose of higher education.

A view of the Butler Library campus of Columbia University in New York in this picture taken October 2, 2009. REUTERS/Mike Segar

The first orthodoxy to address is the idea that higher education is a private good, not a public good. Too much of the burden rests on those seeking it because it hasn’t been recognized as a shared responsibility. According to the Federal Reserve, today’s average graduate has between $20,000 and $25,000 in education debt. Total student debt tops $1.6 trillion – the country’s second-largest source of consumer debt after mortgages. Meanwhile, data collected by the Center on Budget and Policy Priorities shows that from 2008 to 2018, state funding for public colleges and universities dropped by 16%, forcing schools to hike tuition to make up the balance.

Education is a public good, and it should be treated that way. It doesn’t just provide hard skills and factual knowledge. It teaches us to think critically, communicate effectively, and participate meaningfully in our liberal democracy. And it’s the indispensable driver of economic growth and social progress.

Policymakers should invest more, while enabling innovation in the delivery of educational services. The goal must be to present any person who wants higher education with a range of options, at different price points, all creating pathways to full professional and economic participation.

To make this happen, we need different institutions – including new vocational organizations and training partnerships operating at scale – issuing new kinds of credentials that can be earned more quickly and in transferable modules. Financially speaking, students could more easily obtain those credentials via revamped payment models that could include broad tuition credits, subscription-based pricing, income-share agreements, and more.

The second orthodoxy to be challenged is that the best education requires a traditional on-campus residential experience. This past spring, schools were forced into a massive unplanned experiment: how to deliver education entirely online. Now we must learn from the results.

A commission of school administrators, researchers, technologists, and policymakers should be created and charged with gathering relevant data from schools across the country, and use the lessons learned to create a roadmap for the future. Their task will be to maintain the core aspects of a residential experience – like group laboratory work, extracurricular activities, and so on – while delivering other aspects digitally.

This could be achieved by putting more course content online while establishing local sub-campuses and re-imagining campuses for activities requiring collaboration. The effect would also be to integrate universities more fully into their communities. Schools could nurture the growth of collaborative student networks. And the workforce would become more competitive as schools expanded access not just for the young but also for people deep into their careers.

The third orthodoxy is that innovation is best left to the private sector. U.S. technology giants have certainly innovated. But the roots of many of those innovations lie in American education – in its research and development programs, and in the students it trains. For example, the National Science Foundation invested over $6 billion in research and education programs in 2019 alone. This funding supports projects whose discoveries are then translated for use by industry and partners across the economy in medicine, transportation, infrastructure, energy, computing and software, among others.

Following the 2008-09 financial crisis, by 2019 annual federal R&D funding fell from $168 billion to $126 billion, or from roughly 4% of the federal budget to 3%. Likewise, when the current period of fiscal stimulus ends, conventional wisdom will demand cuts, and R&D budgets will likely be a target.

What’s actually needed, though, is a new national commitment on the scale of the Apollo Program – in today’s dollars, over $130 billion – channeled through America’s colleges and universities. One such proposal, recently introduced in bipartisan bills in both houses of Congress, would expand the National Science Foundation’s funding by $100 billion over five years. Such investment doesn’t just produce new commercial applications. It creates entire new industries, like semiconductors, computing, and biotech, that provide opportunities for millions of Americans.

The United States has transformed its educational system before, to match its people’s skills to the task at hand. The “American century” was grounded in a broad democratization of access to higher education. In 1910, just 9% of the country’s 18-year-olds had a high school diploma. By 1940, over half did.

After World War Two, America again revolutionized learning. New industries and new geopolitical competition called for citizens with specialized skills. In response, the GI Bill guaranteed tuition and living expenses for veterans. According to the Census Bureau, in 1940, only one in 20 Americans had a four-year degree. Now, more than a third do.

The world has changed again, and the U.S. higher education system must change with it. The post-Covid-19 reset is an opportunity to reimagine American post-secondary education and bring the academy closer to the economy, helping to create the next wave of innovation and inclusive growth we need to recover and build a more resilient society.

Breakingviews

Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.