Re:Booting CA Higher Education – Transcript of Jeff Selingo Keynote

The following is a rough transcript of Jeff Selingo’s keynote at the 20 Million Minds conference on January 7th. Any errors in transcription are mine, and sections that were garbled are marked by []. I’d like to thank Rovy Branon for his recordings of these sessions. I’ll post additional transcripts soon.

We’re gathered here today at one of the great public university institutions, and this past summer, at another great public institution, on the other side of the country a drama played out that revealed the immense pressures affecting colleges and universities as they deal with the financial and historical foundation that is swiftly shifting [under us].

Selingo

Last June, as many of you know, on a late Sunday afternoon, the University of Virginia announced that its president Teresa Sullivan was stepping down after just two years on the job, citing philosophical differences of opinion with the board. The resignation of this popular leader shocked the campus community and over the next few weeks opposition to the board action mounted. Angry students, faculty and alumni took to Twitter and Facebook. The governor threatened to withhold financial support and said for the board to figure this out of he’d replace them all.

What is interesting about this debate is that in the middle of it, the student newspaper, the Daily Cavalier on the University of Virginia campus, threw a public records request acquiring emails that were sent between board members in the weeks leading up the resignation and the decision. What it revealed was pretty much a lack of cooperation on the firing of Teresa Sullivan. What was interesting was that board members exchanged a series of newspaper articles and columns – from the Wall Street Journal, the New York Times, and the Chronicle – on the pressures changing higher education. One of the them was about elite universities that were offering MOOCs – something that we’ll be talking about today [].

The board chair asked why we can’t afford to have MOOCs. The board voted to reinstate Sullivan at Virginia, but the drama that unfolded at Virginia last summer, from what I hear talking to presidents and to board members, is happening at campuses across the country as presidents and boards try to find a sustainable path forward. []

The changes are prompted by what I think is a perfect storm of five financial, political, demographic and technological forces that are battering higher education right now. I want to quickly walk through these this morning. I think they set the stage for a discussion and it shows in stark terms why change is inevitable.

Selingo Slide 1

The first one is the sea of red ink. We talk a lot about student loan debt in this country but very little about institutional debt. This is the number, 307 billion dollars, that represents the total amount of debt taken out by institutions. The line graph shows the percentage of that debt that is taken out by public universities in terms of their overall financial resources. One third of all colleges now in the US are in a financial standing that is significantly weaker than they were before the recession, and those colleges are actually on an unsustainable path according to a financial analysis. Another third are at risk of [becoming unsustainable]. Expenses are simply growing much faster than revenue. Net tuition revenue and the cash that institutions have to spend to pay faculty and administrators – do the work day in and day out – that is the tuition revenue after financial aid, is flat or declining at 60 percent of American colleges or universities.

Selingo Slide 2

I don’t think I really need to tell you about this one, this is for state in education, not just in California, but all of public higher education. By some measures state taxpayer support for higher education hasn’t risen since 1995, when there were 14 million fewer students in the system CHECK. In 2012 29 states paid less for higher education than we did in 2007. If current trends continue, led by Colorado in 2022, every state will be getting out of the business of higher education by 2059. The trend is going in the wrong direction.

Selingo Slide 3

The third force is that much of the growth in higher education in the past decade has been fueled by well-off, well-prepared students, and that well is drying up. This is just one example, this graphic, which is an analysis done for a private residential college in the northeast. And what it looks at is the total number of 18 year-olds in 2009. It started off with 4.3 million students, but when you filtered all those students out – the students who aren’t going to college, the students who have no intention in going to college – those who expressed interest in a 4-year residential college on the east coast and oh, by the way, those that had the money to pay for this private residential college. Out of 4.3 million students, only 996 students filtered out. Dozens of schools are after that small group of students, and they all need to have those students. In some ways it’s much like the efforts of publics in many states to recruit financially and to recruit out-of-state in order to boost their revenue. For those students who are paying their full way.

The University of Oregon and Arizona State University enroll more freshman from California than 6 CalState campuses. I think that at some point the well of these students is going to dry up as everyone competes for a smaller and smaller group of students.

Selingo Slide 4

The last two forces that I want to talk about today are perhaps the most important. The first is that the alternatives in higher education are improving. This is just a sampling of those alternatives. [It isn’t just the MOOCs from Stanford in California that are here today, we also have StraighterLine or the competency-based degrees from Western Governors.] This is what is going to allow the future, a little of what we heard in the beginning remarks [from Darrell Steinberg] is allowing students to bundle their degree. A third of students transfer between colleges in their four-year degrees. The idea of going to college at 18 and staying there for four years and graduating is a romantic notion of higher education, but it’s simply not reality. Most students don’t get their higher education that way. Many of them drop out and go back to school later on, a typical student is not an 18-year-old.

Students are less brand loyal than before, and they’re using new pathways to college. The next generation of students coming down to colleges are accustomed use of technology throughout their lives. College leaders in my opinion don’t get this, . I attended, here in LA, last spring at the annual meeting of the American Council of Education, and Sal Khan was the keynote speaker. The night before he was profiled on ’60 Minutes’, and he asked those in the room who had never heard of the Khan Academy. [A fifth] of the hands in the room went up. It was interesting that in that month his lessons reached more than four million people. I think many policy leaders just don’t get the idea of really changing the way. These alternatives – whether it’s Western Governors, which is growing at breakneck pace with a competency-based degree in Washington state or Texas or Indiana, and now the University of Wisconsin System and Northern Arizona University will be offering competency-based degrees next year – all of these alternatives are improving.

Selingo Slide 5

Finally, I think the most important fact impacting the future of higher education is what I call ‘value gap’. There is no doubt in the minds of Americans that higher education is worth it, despite of all the talk of ‘don’t go to college’ which we see [articles every week] saying don’t go to college, go start the next Facebook or the next Apple . Survey after survey shows that Americans think higher education is core to the success of their children. Those with a college degree earn much more over their lifetime [than others]. Americans increasingly want to know what they’re getting in return for what they’re spending on higher education.

Two research analysts asked this question last year in a survey of Americans and college presidents, and they asked them to rate the job that the higher education system is doing in providing value for the money spent. 57% of the public said fair or good, but 76% of college presidents said excellent or good. This, to me, is the value gap that’s happening right now in higher education. []

Americans want to know what is the value of going to a specific institution. Increasingly there are tools to help figure this out. Three states now – Tennessee, Arkansas, and Virginia – have released the data that matches graduates of specific colleges to earning data in the state unemployment insurance program. That allows users find the first-year salary and eventually find the five-year salary by colleges, by programs. If you want to know what an engineering graduate or a business graduate makes from George Mason University and compare it to other universities in the state, you can now do that in Virgina. You can now do that in Tennessee, in Arkansas and Virginia, and next quarter you’ll be able to do that in a couple more states. These tools are now at the disposal of consumers, and I think they’re only going to improve in the next couple of years to help students make better choices.

Where do we go from here? Despite all these negative statistics I’ve just cited, I’m actually [excited] about the future of higher ed. Sure, a lot of the institutions that are in real trouble, I think a lot of them are going to merge, or in some cases close. I think top institutions in this country will continue to thrive. The middle is really [a lot] to figure out for the path forward. Right now we all want to be in that top group – there is this race for prestige in higher education that is unsustainable and makes institutions, at the end of the day, look a lot alike. Everybody wants to look like the institution down the road. There’s really no reward for trying to be different, because the US News rankings and other rankings don’t reward being [different].

I believe that the financial pressures facing institutions will force them to make choices that will allow greater student choice – in how courses and credits are strung together, how degrees are earned. Ultimately we’ll arrive at a system that is more efficient and gets more students emerging at the end with degrees at a reasonable cost.

Selingo Slide 6Two of the things that I’ve learned in writing my book that will be coming out in May. One is that we’re done a fairly poor job in matching students and institutions in this country. I talked to a hundred college students in preparation for my book, and I was shocked at how little thought went into how they decided where to go to college. It’s one of the reasons why so many students end up dropping out of college – they’re just matched poorly. The second thing that I discovered in talking to a lot of students, and this was mentioned in the opening remarks, many students don’t know why they’re in college. At the end of high school, we’ve created three pathways for students. One is to go to the military, one is to go to a job where a high school degree is good for the job, or to go to college.

Today’s students think that college is a [convenient warehouse], but they don’t know why they’re there. One of the things is that all of these alternatives to traditional higher ed have the potential to create different pathways to college. Not necessarily every student should go to college at some point in their life, whether they’re 20, 25 or 30. I think that the alternatives have been building, working with traditional higher education to create alternative pathways to college. The idea in the US is not that right from high school the only choice you really have to get ahead is to go to college.

I’m not saying that [we’re unique] – trust me, I’ve been in the publishing industry for nearly 20 years, and most of that time in a state of turmoil – but I think this is going to be a great ride, and I look forward to the discussions today, and I appreciate the time that Dean gave me to open up. Thank you very much.

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About Phil Hill

Phil is a consultant and industry analyst covering the educational technology market primarily for higher education. He has written for e-Literate since Aug 2011. For a more complete biography, view his profile page.
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