New AEI report urges higher education changes

Amid growing evidence that the existing system of higher education is falling short of its promise to pave the way for economic growth, the American Enterprise Institute is issuing a new report urging reform.

Although two- and four-year colleges are important linchpins in state economies, there is a growing sense that the existing system is not as productive as it needs to be, particularly in this era of tight budgets. Across two- and four-year institutions, just half of students who start a degree finish it within six years. Completion rates are particularly low at community colleges and for minority and low-income students. Here’s the rub: at this rate of production, the United States will have a hard time meeting labor market demand, falling about three million graduates short of where we need to be in 2018.

Moreover, there has been a dramatic shift in the demographics of higher education today. The traditional college model—physical campuses that bundle students and professors into a single location—was built to accommodate the “traditional” student. But what we think of as traditional students—18–22-year-old first-time college students who head to four-year colleges, live on campus, and attend full time—now make up less than a quarter of all postsecondary enrollments.

Instead, higher education is increasingly serving so-called “nontraditional” students—learners over the age of 25 who are attending part time and juggling multiple commitments such as work and family. One-third of college students are over the age of 25. Nearly 40 percent of undergraduates attend part time, and one-third of part-time students report working more than 35 hours per week. These shifting demographics, combined with the technological advances that allow for distance learning, suggest a need to revisit many of the assumptions underlying the traditional place-based model.

There are also emerging doubts about the value of a college education. Although the cost of college has increased at three times the rate of inflation, little evidence exists that higher prices reflect higher quality. In their landmark study of student learning on college campuses, sociologists Richard Arum and Josipa Roksa found that 36 percent of students did not show any significant improvement in critical thinking, complex reasoning, and written communication skills after four years of college coursework. It is no surprise, perhaps, that in 2012 the Associated Press found that 53 percent of recent college graduates were either unemployed or “underemployed”—the euphemism for overqualified waitresses, bartenders, and baristas.

Between 2000 and 2011, wages for recent college graduates actually declined; they still outperform those with only a high school diploma, but the payoff for this credential has not kept pace with the investment required to get it. From the taxpayer’s perspective, students who fail to graduate or who finish without the skills necessary for success in the labor market do not provide the full return on state investments.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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