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Rethinking business model for public institutions

October 25, 2013

KINGSTON – Why is public higher education important? What will it look like in the future?
Those were some of the questions David A. Bergeron, vice president for postsecondary education at the Center for American Progress and former acting assistant secretary at the U.S. Department of Education, discussed Tuesday in his lecture, which was part of the University of Rhode Island’s Fall 2013 Honors Colloquium.

Bergeron said public higher education is vital because that’s where the students are. He shared statistics showing that 31 percent of college students are at public four-year institutions and another 42 percent are at public two-year schools.
Despite the fact that the majority of students attend public institutions, compared with private or for-profit colleges or universities, Bergeron said enrollment at public institutions has declined since 2001 from 38 percent to about 30 percent in the 2011-2012 academic year.
The share of undergraduate enrollment at public four-year institutions has also declined in that time period from about 78 percent to 70 percent, Bergeron said.
Meanwhile, the average four-year graduation rate has remained essentially constant at about 21 percent, which is something Bergeron said needs to be improved.
The decline can be partially attributed to the growth of online and for-profit institutions.
While many cite rising tuition cost as a reason for the decline, Bergeron said that’s not the reason why fewer students are attending public institutions of higher education.
While students and their families are worried about the cost, Bergeron said the reason why students are leaving is because there are fewer of them.
High school graduation rates peaked in 2010-2011 and certain smaller institutions are losing students simply because there are fewer of the type of student they recruit.
While enrollment has declined, funding at public institutions also poses a problem.
“Public funding at the state level has declined and there is a strain on public institutions,” Bergeron said. “The decline in support impacts students dramatically in terms of the share of the cost that they have to bear.”
Bergeron called for public institutions to re-evaluate their business models, noting that according to Moody’s, revenue for public colleges and universities fell by more than half in 2012, while median expenses grew at almost double the rate of inflation.
While this is concerning, what’s more alarming, Bergeron said, is that since 2008, state and local support for public four-year institutions has declined by about 13 percent.
However, on the federal side, support has increased by 36 percent, mostly seen in the form of Pell Grants.
“You see that reflected in the data, but it hasn’t compensated for the fact that state and local governments have disinvested during this period in our higher education institutions,” Bergeron said. “If past is prologue, we will see more disinvestment, but there’s a way to mitigate that a bit.”
Bergeron said we have to address the “rubble” that remains of the higher education system in the United States.
“I think that’s the productive thing to be doing,” he said.
He said he believes in the future the higher education system be different, with fewer students who graduate sooner than four years.
“There will be less strain on resources that will allow for some innovation and thoughtful reforms,” he said.
The future will also bring economic recovery, as the country continues to pull out of the recession.
“This means the potential for more public resources,” Bergeron said. “But only if our institutions become more effective and more students are getting degrees that are valued by employers and are getting degrees on time. And that requires meaningful reform.”
Reform, Bergeron said, includes increasing graduation rates, eliminating remedial courses, as they exist, and replacing them with “intensive and intrusive academic intervention,” improving academic data systems to include real-time feedback to faculty, and moving forward with “competency-based assessment.”
Bergeron described competency-based assessment as an educational system where students are able to learn in a mix of classrooms and experiential settings.
“If students aren’t assessed in a disconnected way from what people or employers are looking for in terms of education, they can see the result,” he said. “Students can go to employers and say ‘Here’s what I know, here’s what I can do with what I know, and here are examples.’”
He added, “If employers are engaged in determining what competencies are desirable, students will be more connected to the labor market.”
In the future, Bergeron envisions a higher education system where there are just faculty, students and administrators.
“It should be a community where everyone is taking steps to learn,” he said. “This is what faculty tell us they like to do, they like to be engaged directly with their students. They want to be engaged daily in small groups with students rather than large lectures.”
He also hopes the system will include a community that spans beyond just the faculty and the students “to one where because of where we are in terms of technology, we’re able to bring alumni, business leaders, civic leaders and political leaders into the classroom and engage them directly in the learning process. We need to make the classroom be the entirety of the community and stretch to other communities.”

The next honors colloquium lecture will be held Oct. 29 at 7:30 p.m. For details and a complete schedule, visit

Southern Rhode Island Newspapers
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