Friday, October 29, 2021

Together for students. Together for PASSHE.

A few weeks ago, Clarion University named its basketball court after local legend, donor and now University of Kentucky basketball coach, John Calipari. I attended the dinner in his honor. While there, I learned a few things and was reminded of a few others. On the learning side, did you know that basketball players of Coach Cal’s caliber don’t just remember every game? They remember every shot attempted in every game, every disputed call, every coaching decision both on and off the court. At one of the most convivial dinners I ever attended, I had a court-side seat at the wide-ranging review Coach Cal conducted with his former high school and Clarion coaches and more than a dozen of his former Clarion team members and faculty.

What was reinforced was even more profound – the lasting positive impact that Clarion University – like all our universities – has on its graduates. Coach Cal is an extraordinary guy. You will not meet anyone more charismatic, more engaging, than he is. He lights up a room, fills it with laughter, memories, and parables drawn from an extraordinary and still vibrant career. Calipari is also a deeply humble person who is attached to his working-class roots in Western Pennsylvania and is committed and grateful to his mentors and friends and the countless people he has met along the way, and the institutions through which he has travelled. Memories shared that evening were raucous, endearing, powerful – some sad; all of them built up from the strongest of bonds that form between people working together to improve themselves so that they, in turn, can improve the world around them. Most of the bonds I witnessed that evening were forged on the grounds and in the residence halls, classrooms, and sports facilities of Clarion University – reminding me once more how our universities change lives, even save a few. Coach Cal is an extraordinary example of the power and promise of Pennsylvania’s public higher education. And while he is unique in so many ways, he also represents the best of who we are, what we do, what we can do, and what we need to do for the people of this Commonwealth.

The revelation is not new. It happens routinely in countless conversations with alumni of all ages, from all our universities, from Mansfield to California, and Edinboro to West Chester. With tremendous and candid authenticity and passion, alumni tell me how their university lifted them up – often from humble origins – setting them on a course that changed their lives and the lives of their families. Alumni tell me about universities’ roles as engines of opportunity for people in surrounding counties – often counties where opportunities are in short supply – about the widespread affection for the university mascot and all the memories it represents, and about the history and tradition of their university.

We do so much for so many but are we satisfying the needs of our Commonwealth and our employers, too? Earlier this week, I had the opportunity to visit the head of a Commonwealth agency who informed me that half of the employees in his agency are eligible to retire today. Within three years this figure will swell to 70 percent. He asked, “where will I find replacements if not at State System schools?” Where indeed, I thought, reflecting on the number of elected representatives, staffers, and agency employees I have met who are State System university alumni and who speak openly, proudly, and with the endearing affection that Coach Cal displayed towards his alma mater. This conversation, too, I have had countless times with employers and employer associations, chamber of commerce members and not-for-profit leaders who want to know where they will find the employees they need with the right mix of skills and competencies. Opportunities to reskill and upskill people whose jobs are threatened by dramatic and ongoing changes in the labor market is yet another pressing concern.

The need for a better-educated workforce is urgent – today, 60 percent of all jobs in Pennsylvania require people with some form of higher education. Still, only 50 percent of adults in the state have that education. The need for a better-educated workforce is widespread – it extends from the trades and services into agribusiness, financial services, IT, advanced manufacture, healthcare, energy, education. And the need for a better-educated workforce is growing. By 2030, the proportion of jobs requiring a college degree will grow by 5.5 percent for associate’s, 8.1 percent for bachelor’s, 15.7 percent for master’s, and 6 percent for doctorates. Newsflash: the burden of providing a better-educated workforce lands most heavily on public two- and four-year institutions. Quite simply, most jobs that need filling will be supplied by our universities, not by elite and flagship colleges and universities. Nothing at all against them. They are critical to our national well-being, albeit in different ways than are public regional universities. But elite institutions will at best provide 20 percent of all higher education credentials minted in any given year. No, most jobs that go begging for educated workers will be filled disproportionately by graduates of regional public universities (enrolling 25 percent of all higher education students) and community colleges (40 percent). If public education stumbles, so do national, state, and regional economies.

And signs of stumbling are disturbingly apparent in this Commonwealth where the price of public higher education is extremely high. Pennsylvania is 48th in the nation in terms of public investment per student full-time equivalent (46th if you look at investment in public four-year universities like our State System universities). It is 7th highest in terms of price to students (measured in revenue generated through student tuition and fees), and it has the 2nd highest graduating student debt rate of all states. These signs of stumbling are not a random co-occurrence of numbers. There are direct relationships between them. As states divest from public higher education, the cost borne by enrolled students grows, as does student debt load. The net result is twofold. Students stop enrolling in higher education – low- and middle-income students in particular. They are priced out of pursuing their future. And Pennsylvania falls further and further behind in satisfying employer demand for educated workers.

Thus, over the last decade, higher education enrollments of PA state high-school graduates have fallen consistently behind national averages. Worse, because we are not producing the skilled workforce our employers need, Pennsylvania’s unemployment ranking, which was 24th nationally a decade ago, is now 42nd, meaning fewer people are finding work here. The jobs are here (for now). The educated workers needed to fill them are not. And all of this because we are not willing as a Commonwealth to invest what is needed to maintain affordable pathways into and through higher education. Penny wise, pound foolish, the English would say. Why? Because employers lacking the talent they need in one state or region of the country will simply move those jobs to other states or regions. Because people seeking affordable pathways into sustaining careers will go out of state to find them, and those students who leave Pennsylvania in search of more affordable education – well, they are unlikely to return and contribute to the state’s economy and communities.

Yes, of course, we could recruit more students from out of state to make up the numbers, but price factors in here also. Did you know that it would cost Pennsylvania an additional $300 million/year in direct-to-student (grant in aid) dollars to bring the net price of attendance paid by a Pennsylvania resident at a State System university in line with the average in-state-student price that applies in public (state-owned) schools in the five contiguous states? $300 million! The state didn’t build a gap that large without working at it – for years. The long-term impacts these imbalances have on our state’s economy are, bluntly, devastating. Ugh. And did I mention that we can’t build the educated labor force we need on the back of affluent Pennsylvanians who can still afford higher education? Sorry. I omitted that point. Yup. It’s a mathematical improbability. There are not enough affluent Pennsylvanians around to fill the seats on the Pennsylvania workforce bus. There are a lot of reasons that we have strived historically as a nation to democratize educational opportunity – this is one of them.

Do State System universities need to be part of the solution? Technically speaking, no. They don’t. This is a statewide policy problem, not strictly speaking a PASSHE problem. Policymakers could agree to introduce tax and other incentives to “import” talent from other states. Possible, but a heavy lift. Pennsylvania is a modest net gainer with respect to inward migration, but its current tax structure favors retirees who won’t help address talent gaps in the labor market. Alternatively, policymakers could invest in creating affordable pathways at other higher education institutions – it’s not like there’s a shortage of them to choose from in Pennsylvania. And if there is dissatisfaction with existing supply, there are any number of out-of-state providers who would be more than happy to help, and there’s always an opportunity to invest in wholly new start-up options.

Having said all that, I hope policymakers will recognize PASSHE’s significant advantages and will consider it seriously as part of the solution to the Commonwealth’s chronic and structural talent gap. Honestly, as a predicate, I hope policymakers take seriously the fact that there is a talent gap that, if left unaddressed, will have serious and detrimental consequences for our state.

  • As the most affordable pathway into and through four-year education, the net cost to the state for each additional degree produced will be lower than at any other institution. If we further strengthen community college transfer pathways, offering both students and the state the most cost-efficient means of producing more degrees, this is particularly true.
  • State System universities are proudly PA. Fully 90 percent of our students are residents of the Commonwealth, and 65 percent of our graduates are found living and working here ten years after graduating (nearly three-quarters of graduates who enroll from lower-income families or transfer to a PASSHE university from a community college).
  • State System graduates meet employer needs. Our degree programs have evolved over time to emphasize high-demand areas like STEM, health, business, and education. Data also highlights how graduates from all program areas from Arts and Humanities to STEM find jobs and earn good salaries.
  • State System universities are transparent and accountable to the people who pay their bills – to our students who contribute 71 percent of our total revenues and taxpayers who contribute the other 29 percent. Simply speaking, you know what you get for every dollar you spend on a State System university. Seriously. Thanks to the state grant program administered by PHEAA, virtually every college and university in this state benefits from some taxpayer support, and all derive most of their revenues from students. But, other than PASSHE schools, which institutions publish graduates’ expected earnings, tell you about retention and graduation rates and how these vary for different student groups, reveal their labor (and labor productivity) costs, and benchmark their numbers against comparator institutions nationwide? The answer is none. Zero. Nada. Zip. Forget my role as Chancellor. As a Pennsylvania resident and the parent of one consuming a PA-based education, I am disturbed by our apparent willingness to invest taxpayers’ money blindly and hold institutions who receive them to very different standards of accountability and transparency. Out of respect for and in honor of the hard-earned student and taxpayer dollars that support our operations, the State System holds itself to the highest standards of transparency and accountability – arguably higher than anywhere in the nation.
  • State System universities are well managed. When I first arrived in Pennsylvania, I learned from stakeholders that we had a lot of work to do in this area, from developing reliable budgets and budget forecasts to curtailing price increases for students and to getting our arms around our universities’ unique challenges. And from the General Assembly, I heard (and believed) a general willingness to invest in a properly managed and highly accountable State System. With courageous leadership from our Board of Governors and our universities, we have responded to each and every one of the real concerns that were expressed. And here we are three years later, having listened, promised to improve, and delivered. A precis follows.
    • We are achieving the cost reductions we promised. By June 2022, we will have eliminated $173 million in cost over two years – well along the way to delivering the $200-250 million reductions we promised over five years. We have aligned our employee base with our enrollments. By June 2022, we will achieve the two-year targets we set in spring 2020, and we will re-establish two-year targets in fall 2022 to take account of new enrollment and revenue realities. Why this last action? Board policy requires financially sustaining operations of all our universities, and that policy is enforced.
    • The last three years during which the Board has kept tuition flat, we have reduced upward pressure on student tuition and fees by cutting ourselves $160 million a year ($100 million distributed annually from operating funds as student financial aid and $60 million in foregone tuition revenues). From 2011-2018, the average net price that a student paid to attend a university (including tuition, fees, room and board) increased by an average of 5.5 percent a year. Since 2019, that increase has been 0 percent. Flat-lined.
    • We have gotten our arms around our most enrollment-challenged schools, setting them on a path down which they can serve both students and their communities in a financially responsible manner. The work is as hard as it is necessary – often resulting in transformational restructuring – but it is also effective and allows us to maintain opportunities for students across the entire state. Cheyney University’s very existence was once severely threatened, but thanks to diligence and creativity, its accreditation is secured, its debt to other System universities paid off, and the university is operating in a financially stable manner. IUP is now implementing an exciting next-generation strategy – building back stronger than ever to meet the needs of the region, the state, and the nation. And campuses comprising the new and exciting “Penn West” university (California, Clarion, and Edinboro) and those in our yet-to-be-named northeastern integration (Bloomsburg, Lock Haven, Mansfield) are building regional powerhouses to serve both traditional and new student groups.
    • We have introduced and are making progress in advancing an aggressive strategy that will ensure that all our students feel welcomed on our campuses and have every opportunity to succeed – irrespective of their zip code, race/ethnicity, gender identity, and political and world views.
    • State System universities demonstrate the power of public higher education as an engine of economic development (discussed above) and a driver of social mobility. In partnership with the PA Department of Labor and Industry, we have analyzed student earnings 1, 3, 5, and 10 years after graduating from a PA State System university. The project has taken a long time to complete (we’re not slow – the work is complex), so you can imagine I was waiting with eager anticipation when our crack analytics team showed me initial results. And what results! Low-income students who enroll in a PASSHE university earn nearly as much as those who initially enrolled as high-income students. The same levelling-up effects exist when the data are analyzed by race/ ethnicity. Five and ten years after graduating, underrepresented minority students from low-income families are doing about as well as white graduates who enrolled as higher-income students. There are earning gaps in the averages amounting to as much as 15 percent ten years after graduation but considering that the income differences at enrollment could be as 5x or more, that’s an impressive testimony to the power that public education has as an engine of social mobility.

For all these reasons, the Board of Governors approved a highly unusual set of annual state appropriations actions. First, the Board approved a $550 million General Fund appropriations request (a figure that reflects the actual cost of running the system, assuming it is operating sustainably). Second, it encouraged our advocacy supporting $200M in direct-to-student funding. A fully funded request would enable us to put higher education back in reach of the low- and middle-income families that our universities have historically served and who we need to better serve if our economy is to remain strong.

Are there expectations attached to these funding requests? Yes, of course, there are. Public higher education is a partnership between universities and the state. The state’s part in that partnership is to support us appropriately. Our part is to make sure we use hard-earned taxpayer and student dollars effectively, in ways that are responsive to student, community, employer demand – demands that our elected representatives in the General Assembly routinely express. Our priorities for our ongoing System Redesign reflect these expectations. Expectations include our continued sustainable, accountable, and transparent operations, to be sure. As a requirement of Board policy, our universities will operate in a sustainable manner, continuing to adjust expenditure and program array in response to enrollment trends. Even more importantly, expectations include our continued efforts to expand student opportunities – efforts which, thanks to a bipartisan coalition in the General Assembly and the Wolf administration, we can advance with a commitment of $200 million in one-time funding.

Expanding student opportunities is the only means of increasing credentialing productivity and meeting the Commonwealth workforce needs. It does not, let me be clear, entail a return to yesteryear. As I wrote in last month’s blog, colleges and universities that pursue a post-pandemic path back to the past do so at their peril. Our post-pandemic path follows strategic directions pursued by our universities as part of our System’s redesign and the successes we are beginning to show for them. Those directions are responsive to the changing world around us; they are built on core competencies (yes, we definitely can) and have featured so frequently in my blog posts and public pronouncements that they will not be a surprise to anyone. They focus on:

  • strengthening community college and high school pipelines and improving retention and graduation rates for both traditional and new student groups
  • expanding support for under-served students, including adult students, students seeking non-degree credentials in areas that leverage existing program strengths, and students seeking fully online programs)
  • ensuring our university communities support success for all their members, including closing access and attainment gaps that persist for underrepresented minority and rural students
  • successfully implementing university integrations – designed from the start to expand student opportunities
  • ensuring our educational programs remain responsive to market needs and enrollment and demographic trends, and they are available to students across the state with minimal inefficient redundancy.

Moving forward effectively on our post-pandemic path will require us to work together, to leverage our core competencies as we evolve them, and to maintain our financial stability. Like those raucous, endearing, and powerful memories Coach Cal shared, it will take the strongest of bonds between members of our extended communities – faculty, staff, and students, of course, but also our trustees, alumni networks, and business and other leaders from the regions we serve. Working together we can and we will evolve fundamentally in many respects in order that we may continue to pursue our historic mission as an engine of social mobility and economic development. Working together, we can and we will make our case for additional institutional and direct-to-student funding to our partner and owner, the Commonwealth of Pennsylvania.

And here is where we can use your help. Right now. Today. Whether you are a student, faculty/staff member, trustee, or a graduate, you can speak to the powerful positive impacts that a State System education has on people, communities, economies.

Every month, you can join us in sharing why extraordinary state support is critical for student success and the economic and social vitality of Pennsylvania’s communities and the Commonwealth.

The time is critical, the time is now, the time is ours.

Learn more here about our #Together4PASSHE advocacy campaign.

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