Changing Relationship BETWEEN Higher Education and the States, THE

A compact is such a civilized idea. It evokes an atmosphere of amicability and trust: The community interest placed foremost; everyone honorable; no accountability needed. It possesses a far different image from a treaty, or even a contract.

No wonder we like to think of the time when there was a social compact concerning higher education. The real questions for today are whether one ever existed, whether "compact" is just a label for our wistfulness regarding a simpler era, and whether anything like a compact can be fashioned in our time.

There is not much doubt that wishful nostalgia is involved. Our era sometimes seems more like roller derby than civilization in any form. There is also not much doubt that it was a simpler time, back then, when we think of a compact as having existed. We are not too clear on exactly when that was, but it surely was in the good times-probably in the '60s, before they got too complicated. But maybe before that, too.

And there is not much doubt that we are being poetic when we speak of a compact. In some settings, there might have been brief, fairly formal understandings about how higher education would conduct its business and how it would be supported, but we are not really speaking of a relationship in which the responsibilities were clearly delineated in a specific way.

Recognizing all of these limits, I am willing to grant that there was something that we seem to have lost. There was an atmosphere of amicability and trust. The community interest was generally placed foremost. The players were mostly honorable. And by today's standards, elaborate accountability was not needed. What was that something? It was a broadly shared framework for doing business, a persistent cultural environment in which advances could be made. Let's call it a social compact.

The Compact's History

Its roots are easily found in the cultural history of America. In his classic The Uses of the University, Clark Kerr wrote, "Two great impacts, beyond all other forces, have molded the modern American university system and made it distinctive."1 For Kerr, these were the land-grant movement and federal support of scientific research during World War II and afterward. I would add a third: the GI Bill.

The GI Bill aggressively encouraged a generation of remarkably able and highly motivated young people to build a future through a college education. They took up the opportunity in droves and became the well-educated, pragmatic, innovative workforce that powered America to global leadership in so many spheres during their working years. The GI Bill changed the nation's view of what a college education could mean and dramatically increased the share of families who defined a collegiate experience as essential for their children.

Out of these roots grew a national concept of how higher education should operate and how it should be financed. Here is my summary of the principles that generally applied all across the country:

* Essentially, all high school graduates should have broad access to local and flagship public institutions, as well as to private institutions of varying character. Occasionally, elite, selective private institutions and public institutions of high standing might be added to the range of choices.

* Tuition and fees for undergraduate education at local and flagship public institutions should be low-no more than a couple of percent of the median family income and low enough that a student working a part-time job could pay them.

* The state would finance the public institution's educational programs sufficiently to generate needed capacity and to keep tuition and fees at negligible levels.

* Private donors would help independent institutions keep their tuition and fees within an affordable range-higher than for the publics, but still generally a modest percentage of the median family income.

* The national universities would recruit faculties capable of forming the nation's core research base.

* Research operations would be financed by the federal government, private foundations, and interested corporations. State governments would provide the infrastructure.

* Graduate programs would be sustained by using students as apprentices in conducting research and teaching undergraduates.

* An institution would finance outreach efforts in ways particular to its nature: Cooperative extension would be funded by federal-state partnerships; off-campus instruction would be supported by the states or through tuition and fees; and other efforts would be piggybacked onto mainstream teaching and research programs.

This is a fair summary of the compact as it worked during the 1960s, but it applied in essence for almost a century before, from the period after the Civil War when so many of the nation's flagship state universities, including the University of Texas, were founded.

Restoring the Compact

Can we restore the compact?

No, we can't. Not the old one. It was rooted in a simpler, less plural America-one with fewer voices, fewer challengers, fewer urgencies, fewer hopes. It also was based on the fact that higher education, while important, was not too important.

Our very success has upset that reality. Now, higher education is perceived by nearly everyone to be essential for individual economic viability, and its institutions are centerpieces for the national research effort and for national and local economic and social renewal. Our universities have become taproots of vitality, and the public knows it. Just as war is too important to be left to the generals, the work of universities has become far too important to be left to those who make them work daily.

The compact failed because it could not be sustained in changing times. Here are some of the reasons:

* Under the press of eligible students, many public institutions had to restrict admissions, so that they were no longer broadly accessible to high school graduates. Quite a few are extremely selective now, and more of the public sees them as irrelevant to their family interests.

* State governments, faced with demands to address crime, health care, and other immediate social needs, began to recognize the private benefit of a collegiate education and started to back away from full subsidy.

* The demands of the research enterprise began to raise the cost of faculty talent and alter the economics of teaching.

* The rapid expansion of research as a fraction of overall effort taxed the capital capacity of institutions and states.

* Old funding patterns gave way as the federal government took a role in financing undergraduate education, as state governments became more aggressive about research (especially because of its economic impact), and as private support began to be sought and received by public institutions. As responsibilities have blurred, they have become less compelling.

* Regulatory requirements became enormous.

* Finally, the general erosion of public confidence in institutions, beginning in the 1960s, eventually reached higher education with full impact.

So the old compact is gone, just as are other things from a bygone era. Does it matter, really? Is it worthwhile to spend time talking more about this?

I think it is, precisely because the universities and their work are so important to the health of our nation. Public transactions concerning the development and operation of our universities, especially our public institutions, sometimes remind me of mud wrestling while holding the family treasures in an open shirt pocket. We win some of the rounds, but in every one we get dirtier, and we might not be able to find the valuable things again after each new tussle is over. We need to change the game. We need rules that create a healthier environment for the public business of higher education. We need a new compact.

That's much easier said than done, not least because there is no one to define the public side of the compact. And because that is true, the responsibility for changing the environment rests with us, the leadership of American higher education.

A New Compact

This is a big subject, worthy of long and serious conversations; but I offer five points that, in my view, must be on any agenda. Two are about recovering faith; two more, about reducing fear; the last, about gaining stability.

First, higher education leaders must work to rebuild a broad understanding in the larger society and its leadership of what our institutions do and how they establish-through their multiple missions-public benefits for a healthier present and future.

To much of the American public, we are strictly about undergraduate education. To much of Washington, we are about research and, occasionally, about graduate education. To other segments, our mission may be athletic entertainment, or the arts, or extension, or regional economic development, or libraries, or cultural preservation. The power of America's higher education institutions lies in the totality of what we do and how the parts fit together. Because the public and public leadership are not grasping that reality, they become frustrated by our segmented financial picture-about "why resources over there can't be used for my concern"-and they see us as afflicted by a foolish lack of focus.

A related, very important matter is the loss of recognition for higher education's contribution to the common good. Over the past three decades, our work has been largely redefined in the public mind as yielding mainly private benefits, in the form of undergraduate and professional degrees that have personal economic value. This one misconception is central to the erosion of support from state legislatures across the nation. We must address these perceptions immediately and effectively. Our associations can help organize national efforts, but there is local work to be done, too.

Second, we must work to restore trust that we are genuinely committed to serving our students and our larger society and that we are competent and qualified to do so. With public leaders and elected officials, we have to do a better job of establishing regular contacts, engaging in honest and mutual development of long-term and short-term goals, frankly discussing financial tradeoffs, and reinforcing the balance of our complex missions. Greater texture is needed in our relationships, especially with key leaders.

To build trust with the public at large, we need to embrace accountability, not just accept it grudgingly. We ought to help define indices of performance that make sense, and we should help found a credible reporting center. We need to be forthright about our shortcomings, and we ought to foster a culture of continuous improvement.

Third, we must work with public leaders and among ourselves to establish sound, credible mechanisms for continuing the national tradition of ready financial access to higher education by middle-class students. Let us not underestimate the depth of fear that exists in the country over this one point. I realize that a well-documented misperception exists among the public concerning the facts about college costs-that, on average, the public thinks of college as costing two to three times what it actually does-but I also think there is plenty in the truth to concern us.

At the typical flagship public institution in America, the cost of attendance (for mandatory tuition and fees) is now about 11 percent to 17 percent of median family income. Those figures are up from 1 percent to 5 percent in the 1960s. If the trends of the past 15 to 20 years continue, the share would rise to something like 30 percent of median family income by 2020. In our current system, middle-class families (those with perhaps one to three times the median family income) do not get much mitigation of these costs. The effect on these families of a large rise in cost of attendance as a share of income would be enormous; consequently, I do not believe that it would be allowed to happen. Political leaders would react by capping our charges and draining resources from our missions other than undergraduate education. I do not need to go into what such a result would mean socially and economically, given that public institutions serve three-quarters of American students.

This is a serious problem, and it needs attention now. I believe that a solution can be achieved. That solution could also become the central point on which a new social compact is founded.

The key is to strive for consensus among public leaders and the leaders of higher education on a target for the out-of-pocket cost of attendance, as a fraction of median family income, at various kinds of public institutions. The focus should be on what people actually have to pay to go to college. I cannot propose, on the basis of information available to me, exactly where the target should be set, but my instinct says that, for a flagship institution, the upper limit should be something like 20 percent of median family income. Of course, that would be 10 percent of twice the median family income, which is probably a better benchmark for the middle class than median income.

If consensus on the target can be achieved, the annual discussion with all players-institutional administrators, students, parents, governing boards, legislators, state government leaders, Congress, and relevant federal officers-can be consistently pointed toward realizing it through actions that are much more thoughtful and concerted than today's. But I do need to be clear about something: The states will continue to have the definitive role here. A stable, healthy pattern can be achieved only if legislatures and governors make a sustained commitment to affordability and high quality.

Fourth, we must find a way to make a college education seem essential and more reachable to the parents of the most talented students from lower-income families. Over the past seven years, I have spent a good deal of time in Texas high schools, as we have worked to use the state's Top 10 Percent admission law to rebuild minority representation at UT. When I talk to a Top 10 Percent audience in these schools, I am speaking to the best students, not the average ones. Most likely, they are the top 3 percent of those who entered in the ninth grade, because two-thirds of their entering class have already dropped out. Every single one of these students should be going to college somewhere. Only about a third do so.

Why does this dreadful waste of talent occur? For two reasons, I think: These students do not grasp the value of a college education to their future, and they do not believe us when we say that we can make college financially possible. We in higher education must develop a more coordinated, more effective strategy to reach talented students from lower-income families. I do not have a recipe, but here are some elements that ought to be in the picture:

* Families have to be recruited, as well as students. The attitude of impossibility runs deeper than the student.

* We need to identify strong talent in middle school and work with talented students and families to target college all through high school. Research shows that decisions about going to college are generally made before high school or early in high school.

* We need to help students and families understand how finances can be addressed much sooner than when the FAFSA form comes out in the student's senior year.

* We need to simplify financial aid packaging. It is typically much too complex now to inspire confidence in these families.

Fifth and finally, we must address costs. More specifically, we must mount serious, effective efforts to limit the rate of growth in the educational cost per student. It is in the range of 4.5 percent per year, a substantially inflationary figure, but more important, a figure significantly larger than the long-term growth rate of the economy.

We all know that there are good reasons for it: Our labor-intensive business is built on rare talent, and inflation drives up salary costs. There also are progressively added costs associated with the growth of knowledge and the facilities required for teaching.

But it is very likely that a growth rate of 4.5 percent cannot be sustained indefinitely. Of course, we can reduce the growth rate of costs by degrading quality. That is not the answer. We need to look for ways to take that growth rate down while sustaining high quality, so that whatever advances are made along that line can become broadly shared among us. This is hard, but it is important for the stability of our mission and our work. It merits serious initiative, both collaborative and local.

Conclusion

Sometime in the past two or three decades, the emphasis has shifted from the common good to individual benefit. There is nothing inherently wrong with self-interest, of course, but it cannot be the foundation of higher education.

Is anyone looking out for the common good? We are, and we need to tell that story. Our continuing obligation is to give this and future generations the discipline to take a longer, fuller view. Surely such a wish is not quixotic, because we know from our own history that such discipline existed and was sustained in public life right here in America.

Note:

1. Kerr, C. (1963). The uses of the university. Cambridge, MA: Harvard University Press.

LARRY R. FAULKNER is president of the University of Texas at Austin. This article is adapted from his remarks delivered at ACE's 87th Annual Meeting, held in February 2005.

Copyright American Council on Education Spring 2005
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