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Midwest Forum of the College Board

 

February 28, 2005

Good morning!

Just a few days ago we lost the great playwright Arthur Miller. He was an American icon, a tremendous talent, and a man of great conscience. But at the University of Michigan we felt his loss even more deeply because he was a beloved alumnus.

Mr. Miller enjoyed telling stories about his days at Michigan, and what brought him to the Midwest. He came to Ann Arbor in the midst of the Depression after his family had lost nearly everything. His parents did not have a college education, though they believed mightily in higher education as a way for their children to “make something of themselves.”

Arthur Miller’s family did not have the resources to send him to college, so he worked in a warehouse for two years before entering with the Class of 1938. In those days tuition was about $62 a semester. He chose Michigan in part because he could afford the tuition and also because the University had a very fine creative writing competition called the Hopwood Awards. He wanted to write, and he hoped he could win one of those prestigious awards and get noticed.

Well, he won two Hopwood awards during his time at Michigan, and the rest is history.

Arthur Miller came to the University without privilege but with great promise.

Higher education, especially public higher education, has long been seen as a door of opportunity for future generations.

Today I want to propose to you that the country will be at great risk in the years ahead if higher education does not recommit to that public purpose. There is a great deal at stake if an excellent college education is unattainable or unaffordable for some. And yet, in the face of changing trends and market pressures we have become more of a private good than a public one.

Let’s take a quick snapshot of some of the pressures facing America and higher education right now. I’ll take you on a whirlwind tour with a few sobering statistics:

The national economy faces staggering competition from the global marketplace. We do not corner the market on prosperity anymore. A couple of days ago I read an article in a business magazine that outlined China’s immense growth, growth that it said “has no equal in modern history.” And that translates into research investments, too—foreign competitors such as China and India are ramping up investments in everything from R&D to their production of scientists.

In contrast, the United States is not producing enough graduates right now to replace the scientists and engineers that will retire by the end of this decade.

I can tell you firsthand that the state of Michigan is feeling the impact of these economic challenges. Our manufacturing-based economy has not recovered from the nation’s economic downturn, and analysts predict a continuing deficit this year and next year as well.

We know we have to diversify our base of business and grow our high-tech industry. We know we have to encourage more young people to complete a college degree. Right now only 22 percent of Michigan adults have a B.A. degree or higher, well below the states whose economies are recovering and growing.

This past year, Michigan Governor Jennifer Granholm charged a commission to study the effects of higher education on the state economy. The commission report said that “the troubling reality is that nearly all of the state’s 9th-graders say they want to go on to college, but only 41 percent enroll directly out of high school, and ultimately, only 18 percent graduate with a bachelor’s degree.”

Our country will have to ask more of its colleges and universities than ever before. And yet, for public higher education, state funding has suffered deep cuts as many states struggle to close serious budget gaps.

Here’s the situation in Michigan: If the current state budget proposal is enacted, the University of Michigan will have lost $50 million in appropriations in just three years. And the underlying structural issues are just as dramatic—these recent cuts are the exclamation point on our country’s 25-year trend of declining state support for public higher education.

So what has happened in that time? Public education has become more of a private good. State support used to account for about 70 percent of the costs for undergraduate education at my University. Students paid for the other 30 percent with tuition. Now, four decades later, the sources of funding are completely reversed. And as state support continues to erode, the students take on more and more of the burden.

I am describing the public university environment because that is what I know well. But for all of us in higher education, we know that the costs associated with teaching and research in the digital age are high. On the business side, costs such as health care and energy continue to skyrocket. On the academic side, the pace of discovery has exploded and the competition for the best faculty is fierce.

The pressures are real—for us and for our students and their families. The public is increasingly critical of tuition increases and the price of a college education. I am deeply concerned about the growing disconnect between universities and the public we serve.

And here is what troubles me most: as all these challenges and tensions swirl around us, college accessibility and affordability are at risk.

We can see it in the income disparities on our campuses now; in the sometimes insurmountable barriers for low-income families as well as the squeeze on the middle class; in the amount of debt our students have to take on in order to complete their college degree; and in the data that show us there is considerable confusion and misunderstanding about the real costs of a college education today. Sometimes those perceptions alone create significant barriers to attendance.

So how can we recommit to our public purpose?

How do we educate more students and more diverse student populations in the midst of all these changing demographic, economic and policy trends?

With new models and new ideas.

The path ahead is not paved with band-aids and defensive postures.

I want to highlight three areas that require our immediate attention if we are to remain affordable and accessible in the years ahead.

The first step on our future path must be to strengthen academic preparation for college. I know you are working hard on this issue and worry about it all the time, but we have to keep it on the top of our collective priority list. We know the rigor of a high school curriculum, and the fundamentals of excellent math, reading and writing skills can make or break our students’ college entrance and ultimate graduation.

The College Board’s Springboard program is a wonderful example of a creative new solution to what is an immense structural problem in this country. None of us can solve this problem alone, but neither are any of us exempt from the responsibility. This country needs more college graduates, students who are prepared for college and who have confidence that a college degree is an achievable goal. For far too many young people in this country, we don’t come close to giving them the skills they need to succeed.

The second area I want to discuss also will require intense commitment and a whole new approach.

We must lower the real, and the perceived, financial barriers to a college education.

Colleges and universities will have to direct more of their own resources to need-based financial aid. We have to reach out with special attention to our neediest students if we hope to achieve true economic diversity on our campuses. Our country cannot afford to leave talented young people behind, and data show us that qualified students from low-income families are sometimes turned away because the barrier is just too steep.

I have news from my own campus to use as an example. Today the University of Michigan is announcing a new financial aid program we’re calling M-PACT. The program will commit an additional $3 million a year to need-based aid so we can reduce loans and increase grants for 2,900 students in the state of Michigan. We will jump-start the program with $9 million from private gifts, and we will launch a major fundraising initiative to raise at least $60 million in endowment so we can sustain the effort over time.

Five years ago, our University experienced just how much of an impact private giving can have on our ability to recruit students regardless of their financial means. Michigan alumnus Rich Rogel and his wife Susan provided a $22 million gift for scholarship support to out-of-state students. Right now there are 214 Rogel Scholars on our campus who might not have been able to afford a Michigan education without the extra financial assistance.

Like all the members of the College Board, the University of Michigan has been committed to access for decades. But many colleges are taking additional steps with robust new programs, because we know we simply have to do more in an era when state support and market challenges will continue to put pressure on tuition.

Tuition increases cannot simply translate dollar for dollar into more debt for our students.

Recently a research study from UCLA showed that this year’s freshman class will borrow more than any class before it, and that 8 percent of first-year students expect a loan burden of $10,000 or more just for the first year.

I think it’s appropriate to ask our students to assume some debt as part of their own investment in their future. But we cannot simply shift all the burden of tuition increases onto the backs of students who already have significant financial need.

As we look carefully at the price of a college education, I want to say something else that I think is often missed in the debate: We need to focus on the affordability of a college education, and not simply on tuition. The stated tuition price, or as some say “the sticker price,” is simply not the full measure of affordability. If we focus on the sticker price alone, we end up with a one-sided look at a multi-dimensional challenge—and the results can be misleading or sometimes just plain inaccurate.

Higher education has to work with policymakers and with the public to develop more accurate measures of affordability.

Whether or not a student can afford college depends on many factors. How much financial aid is available, and how much debt a student will have to take on, are critical considerations for families. Developing robust measures of affordability will be far more complex than a superficial glance at the sticker price, but it will give families and students useful and accurate information on which to make college decisions.

Of course, measuring affordability is only part of the challenge—higher education must be accountable to its students and our government for costs and value.

Some of the barriers to affordability are very real, and others are the result of deeply held perceptions.

Here’s a story our associate director of financial aid, Al Hermsen, told us recently when we were talking about how perceptions can create significant barriers to access.

Dr. Poppy was a generous alumnus from the Upper Peninsula of Michigan who provided the endowment funds for a $5,000-a-year scholarship. The scholarship is designated for students from Iron Mountain High School who are accepted to the University of Michigan. As many of you know, the Upper Peninsula is a geographically isolated and economically fragile area of our state; and we have found that sometimes even highly qualified students and their families do not believe a Michigan education is attainable. Even though the University of Michigan meets the full demonstrated need of every in-state student, some people still perceive that the University is financially out of reach and that they will have difficulty succeeding there.

Dr. Poppy’s scholarship goes unused about 50 percent of the time. And that is simply not acceptable.

Whether in Iron Mountain or Evanston, lack of awareness and deeply-held perceptions lead to a troubling national challenge: Half of all college students fail to even apply for financial aid. Research suggests that 850,000 of those students likely would have qualified for a Pell grant.

Here’s the bottom line: We do a lousy job of explaining the real cost of college attendance. We have complicated webs of financial aid that confuse and inhibit students and their families. Although the barriers of cost are sometimes all too real, studies also show us that families have unrealistic fears of college expense which shuts down the path to a college degree before it even begins. We simply must improve our education and communication about college costs and financing.

Here are some recent statistics that illustrate the point for another segment of our population: Last year the Tomas Rivera Policy Institute at USC issued a study looking at perceptions of financial aid within the Latino community. Forty-three percent of all Latino young adults and about half of Latino parents reported that there were not aware of even a single source of college financial aid.

I know how difficult it is to simplify and clarify financial aid information for a lay audience. But it is critical that we develop new ways to communicate with students and families. We are educators, and yet we are the cobbler’s children when it comes to demystifying college cost. Let’s work with our faculty, communications professionals and with students and families to design more effective models, so we can give families the tools they need to realistically assess costs and value.

If we are to remain accessible in the years ahead, there is one more area that requires our immediate attention.

We must make diversity on our campuses real.

We have a long way to go.

Eighteen months ago the University of Michigan won a major victory for higher education in this country. I want to thank the College Board for its amicus brief in support of that important fight.

The Supreme Court allowed us to continue to use race as one of many factors in college admissions. But as I have said on my own campus many times, that milestone ruling was the beginning of our hard work, not the end of it.

Last year my University experienced a significant decline in underrepresented minority applications and enrollment. We believe potential students and their families were confused about the results at the Supreme Court, and worried about the support and commitment that our institutions will have for minority students.

So we redoubled our efforts this year, and we asked our entire University family to help us extend a warm welcome to minority families in the face of this anxiety. We invited faculty, students and alumni to join us at recruiting events. They came by the dozens, and attendance went through the roof. I visited churches and community centers across Michigan. At the Hartford Memorial Baptist Church in Detroit, Pastor Charles Adams declared it “Wolverine Day.” Hundreds of students and families joined us after the service to ask questions and learn more about Michigan.

And I have good news to report. Our total applications have increased about 13 percent this year, and our applications from underrepresented minority groups are up more than 14 percent. So far the trend for admitted students looks even better than that, so we are on the right track.

But I’ll say it again:

We have a long way to go.

We continue to struggle with a persistent gap in graduation rates between majority and minority students at my own university and nationally. We have been studying the issue intensely and we realize there are no easy answers. Our research shows that only 3 to 5 percent of minority students leave for academic reasons, and yet there are complex factors at play. Our efforts on retention must be just as robust as our work on recruitment if we hope to make campus diversity real.

Furthermore, the state of Michigan is facing a ballot initiative in 2006 to end affirmative action. I believe the political debate will be divisive in our communities, when our efforts should be focused on constructive ways to build broad diversity within the moderate guidelines outlined by the Court. We will have to work hard to educate our citizens about the serious implications of such a ballot decision. Here is an example that surprises many people: this ballot initiative, if approved by the voters, would prohibit our highly successful efforts to recruit women faculty in science and engineering—just at a time the country most needs all the talented science professionals it can get.

I learned an important lesson first on the steps of the Supreme Court and again when I participated in this year’s recruiting efforts. The power of our voice matters. Our personal outreach, our persistence, and our unwillingness to accept anything less than broad diversity on our campuses sends a strong signal in this country. Since July 2003 higher education has sometimes tread too cautiously when what we must do now is lead decisively.

Every one of us in this room can have an enormous positive impact on the issues I’ve highlighted today. You are experts. You know the K-16 environment better than almost any other group of people in the country. You are passionate about building a better bridge to college attainment, and that is why you are so important to our future success.

Along with leadership organizations such as the College Board, we can make sure our universities and our country realize the public purpose of higher education as well as the private good. We can preserve affordability and accessibility for students no matter their race, ethnicity, gender or economic background. Knowledge and the door to opportunity can’t be locked up to the highest bidder—we have to lower the barriers so the free flow of ideas moves from our faculty to a diverse student body; and from inside the academy to K-12, to the business community, and into the global arena.

Arthur Miller wrote his first play on Michigan’s campus. It was spring break, but he was almost broke and decided that instead of traveling home, he would stay on campus and try his hand at writing something he could submit for the Hopwood competition.

He worked at it tirelessly for several days and finally gave his draft to a friend who worked in the theater. The friend read it through and then told the anxious young man that it was “the best student play I’ve ever read.”

Arthur Miller walked out of his boardinghouse at 411 State Street, into the spring night air. And then he just started running. He ran through campus and then through the streets of Ann Arbor with the sheer joy of knowing that he would be a writer.

I want the next generation of Americans to feel that same rush of adrenaline when a door to opportunity sweeps open.

For me, it is the very definition of higher education’s public purpose.