Office of Planning and Budgeting

The Georgetown University Center on Education and the Workforce has released another report projecting an increasing need for college graduates in the US workforce. Like last year’s report, the new report, “The Undereducated American”, argues that there is an existing under-supply of college educated workers, evidenced by the very high college wage premium, and projects an increasing need for workers with a college education in the future, which will exacerbate this wage imbalance, as well as stunt economic growth.

The report predicts that the demand for college educated workers (including those with ‘some college’ as well as those with AA, BA and graduate degrees) will increase by about 2 percent per year between now and 2025, while the US is currently on track to increase the supply of college educated workers by only 1 percent per year. They recommend that the US produce 2.6 percent more college educated workers per year, another 20 million students total between now and 2025, to not only meet the increased demand, but to increase supply enough to bring the college wage premium down significantly (but still in line with other developed nations) and reduce overall income inequality in the US.

Most importantly, this report provides ample evidence that there is not an oversupply of college educated workers in the US economy, despite it being fashionable to assert that college might ‘no longer be worth it’ given the combination of economic distress and the rising cost of college. In fact, the college wage premium (the difference between what the average college educated worker is paid compared to a non-college educated worker) remains sky high in the US at 74 percent, contributing to growing income inequality in the US. The data show that not only do college educated workers dominate the highest paid positions in the US, but they make significantly more money than non college educated workers even within the same types of jobs.

Read the report to discover more about why they settle on the recommendation of producing 20 million more college educated workers (and a projected college wage premium closer to 46 percent), and to see detailed data on wage and employment trends by occupation and education.

CUPA-HR salary survey data, analyzed by Inside Higher Education, shows that, similar to faculty members, median pay for senior and mid-level administrators at public institutions of higher education was flat in 2010.

At private institutions, members of all three categories showed modest gains of between 1 and 2 percent, contributing to a growing gap between pay at public and private institutions.

Higher Education Strategy Associates, a Toronto based research firm, released a report last week that measures 17 nations on the affordability and accessibility of their higher education systems.

The report, Global Higher Education Rankings 2010: Affordability and Accessibility in Comparative Perspective, finds that while the United States ranks on the low end of affordability, it ranks 4th overall in accessibility. This counterintuitive finding is repeated across other nations in the study and suggests that these two goals are not as closely linked as some might assume. Overall, Finland scored highest on both measures.

If you don’t want to read the entire report, or scrutinize the research methodology, you can find a summary of the report and a table of the main results at the Chronicle.

In advance of the 123rd annual meeting in Dallas on November 14, The Association of Public and Land-Grant Universities (APLU) has released the final report resulting from five regional meetings to discuss key concerns about the future of public research universities, one of which took place at UW Seattle on April 26, 2010.

The report, Ensuring Public Research Universities Remain Vital, outlines the important contributions that public research institutions like the UW make to knowledge, society and the economy. The report also reaffirms the need for institutions to remain committed to their public mission of providing world class education that is affordable and accessible, and for the states to remain committed to facilitating that mission by restoring and protecting the public investment in higher education.

Additionally, the report addresses ways that the federal government can help keep US public research institutions vital. First, by reforming indirect cost reimbursement rate setting policies and regulations associated with federal research grants. Second, by exploring ways that the federal government can partner with institutions to provide operating support, including endowed faculty chairs, funding for doctoral trainees, and new targeted research funding.

John Aubrey Douglass of UC Berkeley’s Center for Studies in Higher Education has issued a new report on the current status of higher education, and potential paths for growth and change into the future.

In Re-Imagining California Higher Education, Douglass argues that the existing model for higher education in California (here representative of higher education in states across the US) has changed only incrementally over recent decades and is ill suited, due primarily to the combination of declining per student funding and increased enrollment, to meet the near-term demands of the economy, much less US stated goals of dramatically increased participation and attainment for the future.

Douglass proposes that California boldy reimagine its higher education system by building on the existing strengths of its current tripartite system (two year community colleges, the four-year California State system, and the four-year UC research institutions). Among his proposals:

  • An expanded community college sector that includes a set of institutions offering four year degrees and a set of institutions with a more explicit ‘transfer focus’.
  • A new poli-technic institution sector that focuses on applied degrees in science, engineering and technology.
  • A new online ‘open university’ that focuses on adult and/or placebound learners in California.
  • Increased focus on international recruitment to attract funding dollars and top talent to the state.
  • Increased focus on partnering with the federal government in funding institutions beyond basic research and financial aid to students.

With arguably the best– and certainly the largest– public higher education system in the country, if not world, the old saying ‘So goes California, so goes the nation’ comes to mind while reading Douglass’ report.

While some may be expanding public investment in higher education, the US is not alone in wondering how to maintain globally competitive institutions while significantly increasing student access in the face of diminishing public resources. A British panel headed by Lord John Browne released a long anticipated report, Securing a Sustainable Future for Higher Education, which outlines Britain’s higher education goals, assesses the ability of the existing system to meet them, and proposes a new financing model that shifts the cost away from taxpayers and toward the graduates themselves.

The debate about higher education as primarily a public or private good is a familiar one in the US, where shifting the costs from the state to students has been a decades long trend. British institutions only introduced student fees in the early 90’s, and since 2006, British institutions have been allowed to charge a maximum of  £3,000 ($4,800) per year to supplement government funding. If Britain were to implement the report’s recommendations to slash government funding by 82%  and remove the cap on student fees, British higher education would not only catch up, but surpass the US in terms of the public/private split in higher education funding. However, note that loan repayment terms in Britain are much more flexible than in the US.

Some of the primary components of the proposal include:

  • The institutions shall set fees competitively.
  • The Government will front the cost of attendance via student loans.
  • These loans will be paid back after graduation, but not unless or until the student is making more than £21,000 per year.
  • The interest charged will only be high enough to cover the Government’s cost of making the loans.
  • The student’s monthly loan payment will be based on earnings.
  • All outstanding loan amounts will be forgiven after 30 years of payments.

Because the Government is taking on the risk in this model, they propose that institutions face a government levy of 40-90% on any fees charged above £6,000 to discourage needless fee increases.

Such a dramatic increase in the cost of higher education for British citizens is alarming to many. However, proponents note that as many as 20% of students might never have to repay the loans due to low income, and that many others will pay less than the total amount owed. Concerns remain, however, for those who believe in the concept of ‘sticker shock‘, wherein a lower income student is deterred from attending an institution due to the high sticker price, even if financing options may dramatically reduce the overall cost. Still others, including in the humanities and social sciences, are concerned about the differential treatment of medical and other STEM related education fields, which would continue to receive government investment.

The National Academy of Sciences, National Academy of Engineering, and Institute of Medicine have sponsored an update to their consequential 2005 report entitled Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future. The latest version is called Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5, and can be read online free of charge.

The new report highlights America’s relative decline in global competitiveness by presenting statistics on patent awards, research publications, employer surveys, and student achievement levels in math and science, among other things. While recognizing current economic constraints, the report calls for major investment in and reform of K-12 education, as well as a doubling of the federal basic-research budget to help restore and maintain US competitiveness in the global economy.

One action Congress can take immediately is to reauthorize the America COMPETES Act, which was passed in 2007 largely as a result of the 2005 Gathering Storm report. This Act received one-time federal stimulus funding in 2009, and is set to expire this year without Congressional action. The UW Office of Federal Relations provides regular updates on their blog regarding the Act’s progress in Congress.

In addition to this report, The National Research Council, at the request of Congress, has created the Committee on Research Universities, a panel of business and higher education leaders, to identify the “top ten actions that Congress, the federal government, state governments, research universities, and others could take to assure the ability of the American research university to maintain the excellence in research and doctoral education needed to help the United States compete, prosper, and achieve national goals for health, energy, the environment, and security in the global community of the 21st century.”

The Committee held its inaugural meeting on September 22nd, and is scheduled to meet again in late November.

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