Published in the Fall 2006 issue of The Montana Professor
HIGHER EDUCATION & THE SOCIAL COMPACT
William E. Kirwan
Chancellor and Chief Executive Officer
University System of Maryland
One of the defining features of our nation is the development and
evolution of an implied social compact that places a responsibility on each generation to provide for the
education of the next generation. This compact first surfaced in the 1850s as
states began developing compulsory free education for youth into their teenage years. A critical expansion
in this inter-generational compact came with the passage of the Morrill
Land-Grant College Act of 1862. This visionary legislation, championed by
Vermont congressman Justin Smith Morrill and signed into law by President
Abraham Lincoln, created the land-grant university system. By establishing at
least one college in every state with the expressed purpose of promoting "... the
liberal and practical education of the industrial classes on the several
pursuits and professions in life," the Morrill Act signaled our nation's intent
to make higher education access available to the ‘working classes', not just
the wealthy. In 1890, the Morrill Act was expanded to provide for additional
land grant universities serving African-American students in the segregated
The egalitarian nature of the social compact-rejecting the notion
that race, class, or geography should restrict access to higher education-was
truly a revolutionary idea. From these early roots, the U.S. developed a system
of higher education intended to provide all qualified Americans with an
affordable opportunity to advance their education as far as their desire and
The social compact was further strengthened with the GI Bill, one
of the crowning achievements of post-WW II America, which provided the means
for veterans returning from World War II to get a college degree. Because of
the G.I. Bill, the U.S. developed the workforce to build the world's most
successful economy and the largest middle class in the history of the world.
All of this was made possible because higher education was seen as a "common
good" and, as a result, was the target of substantial public investment so that
our nation's citizens would have affordable, accessible, high quality higher
education. In the decades that followed, with additional financial aid through
programs like the Pell Grant and with greater public support to expand access
to publicly funded colleges and universities, the doors of higher education
were opened to larger and larger numbers of people. As a result, the U.S. was
the first nation in the world to "democratize" higher education and by the
1970s the social compact had reached its full flowering.
Unfortunately, over the past several decades, the social contract
has begun to unravel. One need only examine the Pell Grant program-America's
primary "work horse" for college aid-to get a sense of the compact's decline.
At its inception in the 1970s, the Pell Grant paid for more than 80% of the
average cost of attending a public university in America. Today, it pays less
than 40% of the average cost of attendance.
The fraying of the social compact is, ironically, rooted in its
overwhelming success. As college attendance became more common place, it led
not only to the collective advancement and success of our nation, but also the
personal advancement and success of individuals. This trend refocused the
public perception of higher education, shifting the societal attitude toward
higher education as more of a "private benefit" than a "public good." While
there remains a general sense that we are all better off if every qualified
student has a chance at a college education, this view has been eclipsed by the
notion that individuals should pay a larger share of the cost, since they will
be the major beneficiaries.
As a result of these changed attitudes, over the past several
decades, higher education has experienced a sharp decline in the rate of
investment at the federal, state and local levels. In the mid-to-late 1970s, as
a nation, we invested more than $10 for every $1000 of personal income in
higher education. Today that investment stands at about $6 for every $1000 of
personal income. Unfortunately, the disinvestment trend has accelerated in
recent years due to rising healthcare and energy costs, and mandated spending
for primary and secondary education. A recent study by State Higher Education
Executive Officers (SHEEO) shows that state investment on a per student basis,
adjusted for inflation, is at an historic low.1
Complicating this transformation in the public perception of
higher education is the dichotomy that exists between the "collective" attitude
and "individual" opinions. Ask any parents and they will almost certainly say
that they want their child to have access to an affordable, high quality
college education. They recognize the importance of higher education in today's
world as a means of personal advancement. Yet as a society, we continue to
enact public policy decisions that move us away from the social compact of
assuring affordable access to education from one generation to the next.
Paradoxically, it seems that just as we have reached the apex in appreciation
for the need of a college education, we have also reached the nadir in public
support for higher education.
There are two critical consequences of this decline in public
support. First, tuition has risen at an excessive rate in recent years. At the
typical flagship public institution in America, the academic cost of attendance
(mandatory tuition and fees) is now in the range of $5,000 to $7,500, or about
11 to 17 percent of median family income. Those figures are up from 1 to 5
percent of family incomes in the 1960s. As a result, the cost of a college
education is becoming an insurmountable obstacle to attendance for too many
students, especially those coming from low income families. A report from the
Advisory Committee on Student Financial Assistance2 estimated that in 2001 there were more than 170,000
college capable students who did not attend college because they simply
couldn't afford it. Undoubtedly, the number has grown since then due to
increased demand and a further escalation in costs.
A second consequence of the declining rate of public investment in
higher education is that campuses have not had the resources necessary to
expand capacity and accommodate the growing student demand. In some states,
even community colleges-a vital open access entry point to post secondary
education-have been forced to cap enrollment due to inadequate funding.
In part because of the erosion in the social compact, we are
developing-for the first time in our nation's history-an education deficit in relation to rest of the
industrialized world. A few decades ago, we were the leader in high school
completion rates and in the college participation rates of high school
graduates. Today, we rank seventh among industrialized nations in high school completion rates and ninth in post secondary
participation rates. We are the only industrialized nation with a declining college participation rate.
And, our middle and high school students rank near the bottom among all
industrialized nations in math and science achievement.
These are warning signals that, if not addressed, could lead to
the demise of the U.S. as the world's leader in knowledge creation and
dissemination, especially in science and technology. If this were to happen, it
would surely mean our demise as the world's economic super power.
Beyond the impact on our economic and global leadership, if the
doors to higher education are closed in today's information age, the "American
Dream" of upward mobility will be short circuited. Already, students coming
from families in the lowest quartile of income have less than a 5 percent
chance of earning a college degree, whereas students coming from families in
the top quartiles of income have greater than an 80 percent chance of earning a
Given the importance of higher education for success in today's
world, it is no exaggeration to say that unless this situation changes, we will
create a large, permanent underclass in our society that not only undermines
the ethos of America as the land of opportunity, but may ultimately become a
serious threat to our democracy. As Thomas Jefferson noted, the quality of
freedom and democracy we enjoy is directly tied to the knowledge and education
of our citizens.
Recapturing the sense of higher education as a common
good-reestablishing the "social compact"-is a huge task but one that needs
urgent attention. Perhaps the first step in rebuilding the compact is for the
higher education community to recognize that it bears some responsibility for
its decline. Regrettably, we are seen by too many in the larger society as
resistant to change, insensitive to rising tuition costs, possessing an
"entitlement" mentality when it comes to public funding, and oblivious to the
need for cost containment. If we are to recapture the public's sense of higher
education as a priority for investment, we must address these perceptions.
From my perspective, there are a few key things we in higher
education can do both to rekindle public for support of the compact and to work
within existing parameters to improve access and affordability for those most
in need of our help.
First, we must make a much more serious commitment to controlling
the growth in the costs of our operations. Educational expenditures at many
colleges and universities across the country are rising about 4.5% to 5%
annually. In a nation with an entrenched 3% inflation rate, this is not
sustainable long term no matter what our sources of revenues. Along with this
fiscal reality comes the fact that we have little hope of regaining public
support for increased investment unless we are seen as more effective,
cost-conscious stewards of public funds.
To address this issue in Maryland, the University System of
Maryland launched an effort two years ago that we call our Effectiveness and
Efficiency Initiative (E&E). Lead by our Board of Regents, the E&E
initiative consists of a systematic examination and reengineering of all of our
academic and administrative processes. We have increased faculty classroom
responsibilities, limited the number of credits required for most degrees,
expanded on-line educational opportunities, required credits to be earned
outside the classroom, and leveraged our power as a system to drive down prices
and negotiate favorable contacts with suppliers.
Our commitment to these E&E efforts-with its $100 million plus
in cost containment, cost avoidance, and alternative revenue generation over
the past two years-and our ability to align our budget request more tightly with state
needs and priorities were specifically cited by Maryland's Governor as he
provided a funding increase (5.5%) last year and a very significant increase
(14.5%) this year. With this increase, we were actually able to freeze tuition
rates for the 2006-2007 academic year.
A commitment on the part of higher education to meet the demand of
accountability-in every sense of the word-represents a necessary first step
toward revitalizing the social compact. Once we get our own house in order, we
will be better able to make the important case that the nation's prosperity in
the decades ahead hinges upon a greater investment in higher education and that
we are doing our part to hold down the growth in college costs.
My second proposed action is the need to reestablish the primacy
aid. The founding principle for the distribution of financial aid in higher
education was to support students who would otherwise not be able to attend
college. Starting in the early 1990s, trends in the use of financial aid have
altered this founding principle. At the state and institutional level,
need-based aid experienced relatively modest increases while merit-based aid,
which is not means-tested, has virtually exploded. According to a recent study
by Donald E. Heller4, from
FY 1996 to FY 2004, merit aid on college campuses grew 212%, while need-based
grew by only 47%.
It can be argued that the turning point came with the introduction
and subsequent expansion of the HOPE Scholarship Program in Georgia and its
counterpart in other states. The reasons behind this approach seemed laudable:
attract outstanding students; keep bright students from leaving the state;
reward academic achievement; and ease the financial burden on middle-class
families. We have, however, gone too far in the use of merit aid. For the most
part, the rise in merit aid has had the effect of subsidizing students who are
already college bound, while holding down the growth in aid for truly needy
students. For example, in Georgia the vast majority of the expenditures on the
HOPE scholarship program go disproportionately to white students and to
students who likely would have attended college without the assistance5.
To make matters even worse, many of these HOPE-like programs are
funded through state lotteries, which have been proven to be a regressive "tax"
on the poor. So, in effect, we have a morally indefensible situation where
low-income families are subsidizing the higher education of youth from middle
and upper income families.
Two years ago, we launched a study of the USM institutions to
examine our use of financial aid and we didn't like what we discovered. We
found out that we were just as guilty as most of the rest of higher education
in paying too little attention to our financially neediest students. We learned
that our poorest students were graduating with 25 percent more debt than the
average student. We decided that we could not allow this situation to continue.
As a system, we established a new policy that stipulates that by fiscal year
2010, our lowest income students must graduate with 25 percent less debt than
the institutional average. This is a requirement at every one of our 11
degree-granting campuses. And, it is just one of several policy changes that
have resulted in a significant increase in financial aid for those who need it
most. The average across the system is a 30 percent increase in need-based aid
We in higher education are responsible for creating a false
dichotomy with our aid programs. Need-based aid already takes "merit" into
account. By gaining acceptance to an institution, the student has to meet certain requirements; has to demonstrate merit. Most merit aid has
no requirement to demonstrate need, while ALL need-based aid requires the
demonstration of merit. For the good of our nation, future growth in all
financial aid programs-at the state and institutional levels-should target
As important as the steps I have outlined are, the fact is higher
education cannot simply "manage" its way out of reduced support and growing
enrollment. We will not prosper as a nation in the decades ahead if we are not
successful in our ongoing efforts to convince the public that we need and
deserve greater investment of public funds.
This brings me to my third and final point: We in higher education
must learn to speak with a common voice and convey a unified message. The
American Council on Education has recently launched an initiative to help
accomplish this task. Solutions for Our Future brings together nearly 400
colleges and universities across the country with corporate partners for a
national public outreach campaign designed to raise awareness about higher
education's critical role in the future of our country. This multi-year
national effort-with corresponding efforts at the state level-will establish a
dialogue with local communities and policy makers to increase awareness of the
public benefits of higher education in order to make higher education a greater
public policy priority.
Through the Solutions for Our Future campaign, we will work to
remind the public that higher education raises incomes and reduces poverty.
Higher education creates opportunities and solves problems. Higher education
eliminates barriers and elevates civic engagement. Higher education enhances
social equality and creates a broader middle class. Higher education changes
the lives of the people who will change the world.
These are the reasons why we must recapture the public's
commitment to the social compact, as articulated in the Morrill Land-Grant
College Act of 1862 and made complete by the G.I Bill and Pell Grant program.
These are the reasons why we must join together to rebuild the public's support
for higher education, our nation's quintessential "common good."
1 State Higher Education Finance, March, 2006
2 Empty Promises: The Myth of College Access in America, Advisory Committee on Student
Finacial Aid, June 2002
3 Business Week,February 9, 2004, A British Solution To America's College Tuition Problem?
4 Merit Aid and College Access, Center for the Study of Higher Education, The Pennsylvania State University, March, 2006.
5 Hope for Whom?:Financial Aid for the Middle Class and Its Impact on College Attendance, by Susan Dynarski, National Crosstalk, Vol. 8/No. 3, Summer 2000