Chancellor's Speeches
Remarks of USM Chancellor William E. "Brit" Kirwan
Higher Education Group of Washington, D.C.
Tuesday, April 13, 2004
Thank you John for the very generous introduction. It is a
pleasure to be here with the Higher Education Group of Washington.
It's impressive to realize that this organization has been in
existence for 50 years, bringing together a broad cross-section
of individuals involved in the development and examination of
higher education policy. Never have the efforts of groups like
HEG been more vital than they are today. I genuinely believe we
are at a critical cross-road in higher education policy, both in
my state of Maryland and across this nation.
This evening I will speak both about the broader trends and
developments affecting higher education and the need to
re-examine and rethink the issues of the cost of higher education
and the related topics of access, affordability and financial
aid. Following Roland's explicit instructions, I will leave
significant time at the end of my comments for some discussion
and questions.
I think we would all agree that over the past half century,
higher education and its role in society have undergone a
fundamental change in the United States. The emergence of
the international marketplace and the reduction of trade
barriers make it clear that the U.S. can no longer compete
as a manufacturing economy. Gone are the days when a strong
back and a sound work ethic all but guaranteed a decent job
and a good life. The path to a high quality of life - both
for individuals and for our nation—now requires knowledge,
innovation and creativity on the part of our workforce. Our
nation has been successful in making the transformation from
an economy built on muscle power to one driven by brainpower
and our institutions of higher education—both public and
private—have been largely responsible for this success.
Ironically, just as higher education in the U.S. is at
the height of its success and is the envy of every other
nation in the world, so too is it at the zenith of adversity.
There is a convergence of factors that make it increasingly
difficult for our colleges and universities to fulfill their
missions and meet their obligations to society.
Obviously, one major challenge we in higher education face
is funding. With the economy struggling across the United
States, state revenues are down, giving and endowments are
down, and -- as a result -- financial support for public and
private colleges and universities is not keeping pace with
rising costs. But, I fear that the dynamic at work is more
than just a sluggish economic cycle. There appears to be a
troubling long term trend at work. Forces seem to be moving
us away from the very approach that has served higher
education and our nation so well. There is a demonstrable
shift in the public's attitude away from thinking of higher
education as a "common good" to considering it
more of a "private benefit". By this I mean,
rather than states and the federal government investing
in higher education to make college accessible and affordable
in recognition of the fact that an educated citizenry benefits
the larger society, there is a dramatic shift toward expecting
individuals to pay a larger share of the cost since - as the
argument goes—college graduates have a significant increase
in lifetime earnings power.
Paradoxically, this shift is occurring at precisely the
time when higher education institutions—both as centers of
learning and hubs of research—have never been so vital for
economic growth and for advancing the common good. Indeed,
in the long run, it will be access to our higher education
institutions and their contributions to advancing knowledge
that will ensure a sound economic future and a high quality
of life.
But in state after state across the U.S., the story repeats
itself. Budgets are strained by a struggling national economy,
the effects of recent state and federal tax cuts, increasing
healthcare costs, and mandated spending for primary and
secondary education. Public higher education is generally
the largest discretionary item in most state budgets. And
higher education is facing a systematic—and I'm afraid a
long-term—withdrawal of public support.
California is often a "prequel" of what happens
nationally and the situation there is disturbing. As a result
of that state's budget crisis, the UC's budget was cut $410
million and student fees by 30%. UC was also forced to delay
for at least one year the opening of a new campus planned in
Merced, Calif. Similar cuts were absorbed by UC's
sister-system, CSU. Perhaps most significantly, the UC
and CSU are suspending the 50-year old celebrated Master
Plan, which guaranteed admission of the top 7% of high
school graduates to UC and the top 33% to CSU. This coming
fall, UC will turn away over 5,000 Master Plan "eligible
" freshmen and CSU will deny admission to as many as
20,000 such students.
Closer to home, we see the same issues in play. In
Maryland, for example, state support for higher education
was reduced by 14% last year, erasing the budget increases
of recent years. In real, not constant dollars, we actually
stand at the same state-funding level we did five years ago
when we served 8,000 fewer students. A decade ago, state
support was the largest part of our total budget. Today
state support is less than 25% of our budget and is actually
the smallest of our three main funding sources, being
surpassed by both tuition revenue and research grants.
Like most systems and universities across the US, the
USM used a combination of tuition increases and spending
cuts to address our budget shortfall, including the
elimination of some 800 positions, 4% or our workforce.
As a result, class sizes grew; course offerings were
reduced; support services have diminished; students
are paying tuition at a level they could not possibly
have planned for when they began their studies; and our
ability to accommodate enrollment increases is in doubt.
If not reversed, these actions threaten the quality of
our campuses - a standard of quality that has taken years
to achieve. Just as alarming, higher education opportunities
could be denied thousands of young people in the future either
because the costs are too high or the capacity is inadequate.
The second challenge for higher education is a sharp surge
in enrollment demand. Although the impact is not evenly
distributed across the states, over the next several years
we will see the "baby boom echo" reach college age.
Not only will that population cohort be large and
disproportionately minority and low income, but laudable
efforts are being undertaken—both at the national level
and on the state level—to ensure that a greater percentage
of these individuals will be able to move on to college.
So, we in higher education face the prospect of a growing
percentage of a growing population of youth, which is
disproportionately economically disadvantaged, expecting
to continue their education at the very time when public
investment in higher education is sharply declining. And
this does not even factor in the huge growth we anticipate
from a growing population of life long learners.
These two realities -- reduced funding and surging
enrollment -- threaten our colleges and universities,
and are in conflict with the overall heightened expectations
placed upon our institutions with regard to workforce
preparedness and economic impact. We are, in fact,
facing a "perfect storm." But the greatest
threat posed by the double whammy of declining public
support and rising enrollment demand is to the future
well being of our nation. Imagine living in an America
where the ladder of opportunity which higher education
represents, is not available to thousands of qualified
young people from the lower end of the economic spectrum.
Imagine living in an America where, because there is an
inadequately skilled domestic workforce, industry must
export jobs or import workers to sustain our
knowledge-based economy.
Besides cursing our fate and wringing our hands,
what should we in higher education be doing about this
situation? What actions should we be taking to address
the enormous challenges facing our institutions and meet
our responsibilities to our communities and our nation?
What steps can we take to rebuild public support for our
mission?
There are, of course, many things we can be and are
already doing. My sense is, however, that for the most
part these actions are institution or system specific,
uneven, erratic and uncoordinated. There is no unifying
national agenda to unite higher education - public and
private, two-year and four-year institutions. While it
would be presumptuous of me to propose such an agenda, I
do have several actions that I think should be part of a
common agenda for most colleges and universities. I will
conclude my talk by describing four of these to you. I
make no claim of originality with any of them. For the
most past, they are things I've discussed or heard
discussed in other forums. Taken together and as
part of a comprehensive agenda for higher education,
however, I think they could make a huge difference in
addressing our twin challenges of protecting and building
quality on the one hand, and accommodating expanding
demand during this period of declining public support
on the other. My first item is a concerted effort on
our part to
- Contain costs.
We in higher education have
a reputation - not entirely undeserved if we are honest
with ourselves - for being somewhat inefficient in our
operations and in the management of our resources. Some
of the criticism is undeserved. "Best practices
" from the business world are often inappropriate
in our world. We could be more "efficient"
by increasing class sizes, eliminating low enrollment
majors like philosophy, or restricting library hours.
But such actions would run counter to core values in
academe.
Nonetheless, there are areas were savings can occur
without compromising quality and most universities are
today engaged in efforts to realize at least some cost
reduction. The problem is that we have no benchmarks
or "best practice norms" to guide our efforts.
What fraction of our budgets should we be spending on
administration, academic support, or deferred
maintenance? Obviously, the answers to those
questions will vary from institution to institution.
But, surely, it would useful to have some national
standards to serve as benchmarks by category of
institution...comprehensive, research extensive,
research intensive, etc.
Fortunately, the University of Illinois is
engaged in a project to do just that. Using outside
consultants, they are surveying expenses by category
for research universities to establish a data base
upon which norms or "best practices" might
be established. Done well, I believe such measures
would be enormously useful, not only as a management
and budgeting tool but also as a means of responding
to critics about our management practices.
We at the University System of Maryland have taken
several steps aimed at reducing costs. For example,
we use the buying power of the entire system to create
deep discounts on purchases of computer equipment,
software and other goods and services. We estimate
that that this past year a system-wide agreement with
Microsoft saved us more than $15 million in software
purchases. We are also re-engineering our administrative
operations to make them more cost effective. In addition
to individual actions on each of the campuses, we are
exploring ways to create consolidated, system-wide
service centers-for facilities and construction
management, auditing and accounting, purchasing
and other service areas—where a single center can
serve the needs of all the system institutions, as
opposed to maintaining 13 separate offices on each
campus.
My basic point is that we do need to rigorously
and systematically look for cost saving measures that
do not impact the quality of our institutions both as
a means of holding down the rates of tuition increases
and strengthening our case for better public and donor
funding. The public needs to be assured that we
recognize the new realities of our nation's economic
circumstances and that we are systematically and
aggressively taking steps to optimize the use of
available resources. This is essential if we are
to have any hope of regaining former levels of public
confidence and support.
- Find lower cost alternatives for course and
program delivery.
For most universities, course
and programs are delivered today pretty much as they
were decades, even centuries ago. While we have enriched
the learning experience through investments in information
technology and while IT has become a powerful learning and
research tool, I think it is fair to say that we have only
scratched the surface in the use of IT for the delivery of
course modules, entire course or even degree programs.
Surely, this is a fertile area for development.
The University System of Maryland is fortunate to be
home to the University of Maryland University College,
arguably the leader in the development of online
education. With over 85,000 course registrations,
UMUC has the largest number of online enrollments in
the world. When UMUC thinks about expansion, it is
does so without the burden of planning and building
new facilities. Rather, it invests in IT infrastructure
and capacity. One of UMUC's great strengths is its
ability to respond quickly to the needs of the students
online, anytime, anywhere. It will soon be the largest
university in our system not just by head count but in
FTE students.
UMUC has entered into a remarkable agreement with
every community college in Maryland. Under this
agreement, a community college and UMUC can guarantee
students enrolling in the community college that if
they complete the two-year college prep curriculum,
they can complete a four-year degree from UMUC right
there at the community college drawing upon UMUC's
online and on-site course delivery capabilities.
We are exploring other innovative, cost effective
approaches. A few years ago, the USM developed an
education center in Montgomery County at Shady Grove.
Eight separate USM institutions have come together in
this location—under one roof—to deliver low cost access
to a range of different USM programs selected to meet
high student demand in areas such as biosciences,
information sciences, business, nursing, and education.
A local community college provides the lower division
course work and each of the participating institutions
provides regular faculty and academic support services
to the center. Students earn their degrees from the
institution offering their particular programs. This
model has been so successful and well-received, that
we are developing a second such center in Hagerstown
and will be exploring additional centers in other
regions of the state as well.
Between UMUC, its partnerships with the community
colleges, and our educational centers, we anticipate
that we can accommodate between one-half and two-thirds
of the projected enrollment growth...and at a considerably
lower cost to the state than it would take to educate
these students at a traditional campus. This will be
a huge boost in our efforts to both serve the needs of
the state and protect the quality of our existing campuses.
- Redirect financial aid programs to merit aid based
on need.
Financial aid is obviously the most important
tool we have to address access and affordability. My
concern is that we are not using this tool properly
today. From the time financial aid programs began to
become common fifty years ago, and through the 1960s
and 1970s, they were almost exclusively aimed at students
who would otherwise not be able to afford college. Even
in the 1980s, when merit scholarship began to grow, both
need-based and merit based aid grew in parallel. All
that changed in the early 1990s. With the introduction
and subsequent expansion of Georgia's HOPE Scholarship
Program and its counterpart in other states, there was
a turning point. Since 1993, need-based aid has seen a
very modest increase while merit-based aid has virtually
exploded. In 1993, merit-based aid represented less than
10% of state financial aid; today it stands at over 25%.
That is an enormous shift in less than 10 years.
Unfortunately it has occurred at the expense of,
not parallel to, growth in need-based aid.
The reasons behind this shift were all laudable:
to attract outstanding students; to keep bright students
from leaving the state; to reward academic achievement;
and to ease the financial burden on middle-class families.
As president of the University of Maryland, College Park
back in the early 1990's, I was leading the charge in
promoting merit aid as a means of recruiting the best
students coming out of Maryland's high schools. But,
collectively, we have gone too far in this direction.
Aid based only on merit is now crowding out funding for
meritorious students who have real need for scholarships.
The fact is, for the most part, merit aid has the effect
of subsidizing students who are already college bound.
Indeed, I have read where one of the primary beneficiaries
of Georgia's HOPE Scholarship Program has been the state's
automobile dealers. Parents offer their HOPE-eligible
children a car if they opt to accept the scholarship
and stay in-state; a far less expensive proposition
for most parents.
We are also 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. We are
talking only about college-qualified, college-capable
students. Most merit aid does not incorporate a similar
requirement to demonstrate need. And so we find ourselves
in an indefensible place where the highest
achieving poor students attend college at essentially the
same rate as the lowest achieving wealthy
students; about 78%.
I am not so naïve as to think that universities
across the country are going to abandon need-blind merit
aid. I do urge two things, however. First, as tuition
rises, universities should commit to holding need-based
aid recipients harmless. We did this at Ohio State and
I am urging a similar practice within the University
System of Maryland. Second, future growth in all
financial aid programs should target merit aid based
on need. From past experience, I can say that such
programs have enormous appeal with donors and
legislators. This is the direction I intend to
move the University System of Maryland.
- Develop a new and united approach on federal
financial aid.
The Pell Grant has been our
nation's primary "work horse" for need-based
aid. At one point in time, it served our nation's
neediest students and our universities extremely
well. In the 1970's, it provided about 70% of the
average cost of attending a public university in the
U.S. No more. I believe that figure is down to about
30% today. Although our nation's higher education
institutions, through their various DC based
associations, recently made a concerted effort to
get a substantial increase in the Pell Grant, these
efforts produced negligible results. Unfortunately,
I'm not optimistic that support on the Hill or in the
White House for the traditional Pell Grant will change
soon. While we must continue to press the case for
the Pell Grant, I believe a new approached is needed.
Quite frankly, this is an area where we must
look to the College Board for leadership. Through
some quirk of circumstances, I will be chair of the
Board of both NASULGC and ACE this year. I pledge
my efforts to get these two organizations to work
with the College Board on the development of some
new federal financial aid strategies.
One idea I have is to create a matching,
need-sensitive aid program with the states. In my
view, many states have shirked there responsibilities
with need-based aid. Perhaps Congress would be willing
to increase its investment in financial aid if it knew
that such dollars would leverage increased state
financial aid investments. And this brings me to
my final point. It really is the national and state
governments who must take the primary role in fixing
this financial aid problem. It is unrealistic to
think that universities can ever be the primary
source for financial aid to needy students. Through
some of the steps I have suggested, we can be a ready
and willing partner with government but it is in the
nation's and our states' vital interests to see that
every qualified student has a chance to earn a college
degree. For although a college degree is a
personal benefit, there is no question that
in the knowledge-based economy of the future, a
highly educated citizenry is -- most definitely -- a
common good.
Fifty years ago, when the Higher Education Group
first came into existence, the nation faced higher
education challenges that are surprisingly similar
to those we face today: surging enrollment; inadequate
capacity; and enormous financial barriers restricting
access for the less affluent. Through a spirit of
collaboration at the federal, state and institutional
levels, we addressed the challenges and provided
affordable access to a remarkable system of higher
education. It is time for a renewed effort of
collaboration. We must work cooperatively with
leaders in Washington and in our state capitols
once again and find the means to insure access to
high quality collegiate experiences for a bulging
new generation of qualified students. Nothing less
than the future well being of our nation is at
stake. The Federal Government must expand its
commitment to aid for the economically disadvantaged.
State governments must place a greater focus on providing
aid to meritorious, needy students. And campuses must
recognize their obligation to holding down costs without
compromising quality and to protecting need-based aid
from erosion due to tuition increases. The ability to
overcome these challenges is within our reach if we
just have the will and the spirit of cooperation to do so.