Remarks of U.S. Secretary of Education Arne Duncan to the SHEEO Higher Education Policy Conference

Thanks very much, Rahm, for that generous introduction.

I'm not sure what I've done to deserve such a glowing introduction. But I have a hunch that Rahm will let me know in a few minutes. He said something about wanting to have, quote, "a frank exchange of views."

All kidding aside, it's an honor to have Rahm here. For more than a decade, he has helped lead and pioneer federal, state, and local efforts to boost college access and completion.

And I’m grateful to have the chance once again to speak with the state higher education executive officers. You’ve taken on a terrific array of cutting-edge topics at this conference. And your steadfast commitment to strengthening America’s education system has been exemplary.

As I’ve said on many occasions, the best ideas for reform in education don’t originate in Washington. They come from state and local government. And your leadership has been vital to challenging the educational status quo when it fails to put the interests of students first.

I am going to keep my remarks relatively short to allow time for discussion. I want to talk today about a couple of subjects.

Let me start by providing a preliminary assessment of state progress toward the bipartisan goal of regaining America’s place as the nation with the highest college attainment rate in the world by 2020. Being 16th in the world is simply unacceptable. We are paying an economic price for that low international ranking today.

And then, I want to highlight some troubling trends that are impeding progress toward the 2020 goal.

The common theme or takeaway messages here are really two-fold. Boosting college access and completion is vital to the future economic prosperity and civic vibrancy of your home states. That is why accelerating college attainment is not just a policy and institutional concern for academia; it is really an urgent national mission.

And second, I can't stress enough that this is a national mission with shared responsibility for all stakeholders. As President Obama has said, "there is no better economic policy than one that produces more graduates... [And] that's why reforming education is the responsibility of every American--every parent, every teacher, every business leader, every public official, and every student."

The theme of shared responsibility that the President articulated is very much in keeping with SHEEO's recent Open Letter to the President.

Your Open Letter states that "Neither the states, nor the federal government, nor students and their families can reasonably be expected to bear the full burden of maintaining [college access]. All of us will need to make hard choices about priorities among the activities consuming scarce resources within and beyond education."

I couldn't agree more. Students need to do their part by staying on track, by applying for federal, state and campus aid, by taking out loans they can afford, and by striving to earn their degrees and certificates on time.

Colleges must do more to increase access, tighten their belts, employ technology more creatively, and boost completion rates.

And yes, states must do more to prioritize higher education funding. States can also do more to constrain growth in what families pay for college, and incentivize innovation, encourage productivity, and accelerate completion.

I know these tough choices are very much in the forefront of not only your minds today but of almost every Governor in the country.

I have yet to meet a Governor who does not wish to be remembered as the education governor. And I have yet to meet a Governor who did not want America to be first in educational attainment.

State leaders like you understand better than anyone that education is the engine of economic growth and the great equalizer in today’s knowledge-based, global economy.

So today we’re providing each of you with a snapshot of how your State is doing in meeting the goal of making America number one again in college attainment. And that analysis suggests that our country, and many of your States, face some serious challenges to meeting the 2020 goal.

The data that we are providing today show the current trend in educational attainment in your home state and the increase in educational attainment needed to meet the President’s 2020 goal.

The charts for your states also show trends in state funding per full-time student between fiscal 2008 and 2011, recent changes in the average net price at leading public universities, and changes in the median household income.

There is a lot of important data to absorb in this preliminary analysis. I won’t go into it all in detail. But I will point out a couple of findings that stand out.

First, the Great Recession clearly hampered most states’ efforts to take big steps toward reaching the 2020 goal. Most states will need to substantially accelerate their production of undergraduate degrees during this decade if America is going to have the best-educated, most competitive workforce in the world by 2020.

It’s true that the number of people with college degrees is rising. It’s just not rising fast enough.

Since the President first announced the 2020 goal in 2009, the nation has made progress in boosting attainment. Over 43 percent of our 25 to 34-year olds have an associate's degree or higher.

That's an increase of two percentage points since 2009. It means an additional 1.3 million adults now have college degrees in America than at the start of the Obama administration.

That’s a good thing, and that’s progress -- but it’s not nearly fast enough. We need that kind of growth each year to meet the 2020 goal.

While money is never the only answer, it’s hard to boost completion when so many states are contributing fewer resources to higher education. Even in states that boosted total higher education funding from 2008 to 2011, only a handful increased their funding per student.

SHEEO's data shows that 26 states -- just over half -- increased their total higher education funding from fiscal 2008 to 2011. But for 2012, 82 percent of states decreased higher education funding. At a time of rising enrollment, reducing funds or just holding the line on funding will cause a downward spiral that will be hard to turn around. Of those states that did not cut funding, SHEEO reported that just four states increased their funding per student between 2008 and 2011.

Some states saw funding decrease by as much as 20 percent per student -- even when adding overall funding.

That is not the way to invest in the future -- or to dramatically accelerate attainment. Disinvestment is not the strategy other countries are employing -- quite the opposite.

As your Open Letter to the president points out, "state support in constant dollars per student was lower in 2011 than it has been in more than 25 years."

The result, as your letter says, is that "financing in higher education is in disarray, since state governments . . . have not funded enrollment growth in public higher education."

Now, it's no secret that states face a brutal budget climate today. It’s tremendously tough out there -- and I don’t for a second minimize those real challenges.

We know this is also a question of priorities -- of where state leaders choose to invest. One northeastern state, for example, ran a budget surplus of a billion dollars but still cut higher education funding by more than $20 million [dollars]. That is not the way to make higher education a priority investment.

It will come as no surprise that public universities and colleges are raising tuition and net price to compensate for state funding cutbacks.

When that happens--at the same time that median household income is stagnant or declining-- the middle class gets squeezed. And it gets squeezed hard.

Every capable, hard-working, and responsible student must be able to afford to go to college. That’s not a Democratic dream or a Republican one. It’s the American Dream.

In America, we don’t believe higher education should be a luxury reserved for those who can afford it. "In America," as President Obama says, "no one should go broke because they chose to go to college."

But when you start to ask the average household to spend 25 percent, 30 percent, even 40 percent of their income for college, you start pricing college out of reach for the middle class.

That’s not good for the economic vitality of your state, or the country as a whole. And it’s going to put hard-working families and students that are doing the right thing at a big disadvantage in a knowledge-based economy.

The long and short of it is that state funding cuts in higher education and tuition increases are jeopardizing our ability to reach the 2020 goal.

But these state-by-state charts and tables suggest one last message as well. Boosting attainment is not just about funding, as vital as it to accelerating college completion. It is also about making smarter use of state dollars.

There is considerable variation among states in making progress toward the 2020 goal. Several states are doing a better job of meeting their 2020 goals, even in a tough economy.

Montana, for example, had one of the biggest increases in college attainment of any State last year. Montana used to lag the nation in attainment. Now, it’s above the average.

If it can continue its growth, Montana will comfortably meet its share of the 2020 goal. But it’s troubling to see that per-student funding levels are requiring families to pay more to attend state universities in Montana, too.

The picture is similar in other states. Colorado had attainment gains three times the national average. But low investment in higher education, and high prices compared to family income there, could make it harder for students in the future to access and complete college.

At the same time, states that are currently leading the country in college attainment cannot become complacent.

Massachusetts has the highest college attainment rate of any state. But its attainment rate was essentially unchanged from 2009 to 2010. With more than half of its young adults already holding a college degree, Massachusetts does not have as far to go as other States to meet the 2020 goal. But it still has to elevate its attainment rate if our nation is going to meet the 2020 goal.

At the federal level, the administration has undertaken a number of transformational reforms to pursue the 2020 goal.

During the last four years, the federal government has funded the biggest increase in college aid since the days of the GI bill. That investment, made without going back to taxpayers for a nickel, is one of the accomplishments I am most proud of. The number of college students using Pell grants to help them pay for college has increased by more than 50 percent.

In 2008, six million students with Pell grants were enrolled in our nation’s colleges and universities. Today, more than 9.6 million students rely on Pell grants to attend college. And just as encouraging, applications from low-income students with family incomes below $10,000 a year, are increasing twice as fast as the overall growth rate in applications.

The best way to break cycles of poverty is to increase access to college.

As you know, from day one, the Administration has also given community colleges unprecedented attention and support. For far too long, community colleges were something of a neglected jewel of America’s higher education system.

Our wonderful undersecretary and my partner, Martha Kanter, is the first community college leader to serve as undersecretary. Jill Biden is the first Second Lady in the White House to be a community college professor. Even as Second Lady, she continues to teach English at Northern Virginia Community College.

Together with the U.S. Department of Labor, our department has launched a two billion dollar, competitive fund to help community colleges accelerate completion and develop programs tied to workforce needs.

The Trade Adjustment Assistance community college training initiative seeks to improve student retention and achievement rates. It aims to reduce time to completion. And it dramatically expands online and technology-enabled learning for high-wage, high-skill industries.

I’m proud of that record. But the fact is that the federal government still has a lot more to do, too, to support the 2020 goal. That is why we are looking to do more to incentivize college completion, innovation, and boost quality and productivity in postsecondary education.

Earlier this year, President Obama proposed an unprecedented one billion dollar Race to the Top competition to promote college affordability and completion. This Race to the Top fund would incentivize statewide efforts to improve quality and productivity, while supporting state efforts to keep higher education affordable.

To meet the 2020 goal, colleges and universities must make it easier for parents and students to finance their college education and understand their financial obligations. And meeting that challenge requires greater transparency.

As you know, the Administration has undertaken a series of initiatives to increase transparency and reduce student debt.

I won’t review all those initiatives here. But I will say that I’ve talked with far too many students who have told me that the first time they understood how much student loan debt they had was after the first bill arrived. That is crazy and costly -- and totally avoidable.

There are more than 7,000 institutions of higher education in America. Each one has its own financial aid award letter. Some award letters are good. Others are confusing--or even misleading.

But there is absolutely no reason that financial aid award letters should be mysterious. And there is absolutely no reason that prospective students should forego college because they mistakenly think they can’t afford it.

That’s why our Department has proposed a new easy-to-use Shopping Sheet or model financial aid award letter that would standardize information for parents and students in an easy-to-use form.

I’ve written every college president in America and encouraged them to adopt the college shopping sheet. Many already have, and I thank them for their leadership. I want to stress that adopting this form is entirely voluntary. But this new, standardized award letter is a tool that institutions can use to hold themselves to a higher standard of transparency -- at little or no additional cost.

These initiatives to increase transparency, boost productivity, and encourage innovation and technology-based learning are all especially important because major expansions of federal aid won't continue indefinitely.

Too many folks in Congress think of education as an expense, not as an investment.

I’m also deeply concerned about the potential for sequestration to jeopardize our nation’s ability to develop the best educated, skilled workforce in the world by 2020.

If Congress imposes sequestration at the start of 2013, our Department would need to slash spending on contracts to support the processing and origination of student loans. That could cause delays that will hurt students as they make decisions about college. And it could reduce services for borrowers seeking to repay their loans.

Work Study programs would be slashed. So would TRIO -- and many other grant programs.

Imposing automatic budget cuts is absolutely the wrong way to make tough budget choices. We’re playing “chicken” with the lives of American students.

For all of these reasons, the imperative to develop the best-educated workforce in the world is in jeopardy today. And just as the federal government has to do more to reach the 2020 goal, states and institutions of higher education will need to meet us halfway in doing more to keep college costs down and boost completion.

Despite today’s tough budget crunch, I am actually optimistic that states and institutions can take important steps toward meeting the 2020 goal.

I am optimistic because, away from the dysfunction in Washington, states themselves are leading the way in thinking creatively about new ways to promote college completion and affordability.

There are so many statewide examples of new and innovative initiatives now taking hold all across the country.

Missouri has announced a plan to offer $10 million [dollars] in Innovation Campus Grants to public colleges and universities to develop accelerated, three-year tracks for some undergraduate degrees.

New Jersey has passed legislation that established “credit for prior learning” centers that will certify different types of prior learning as college-credit worthy, like stable apprenticeship programs or military experience.

In Wisconsin, the University of Wisconsin system is also providing college credit for prior learning experience in the hopes of enrolling more non-traditional adult students.

And in Washington, the State Board for Community and Technical Colleges is in the vanguard of the open educational resources movement.

It launched the Open Course Library late last year. It’s a collection of high-quality educational materials for 42 of the state’s courses with the highest enrollment. It includes textbooks, syllabi, readings, and assessments—and it costs thirty dollars or less per student. The course materials are available for free online, anywhere in the world.

Other states are taking on the challenges of boosting college and career readiness by reforming and reducing the need for remedial instruction. New legislation in Florida established common placement testing for public postsecondary education. It requires that 12th grade students complete appropriate remedial instruction before graduating from high school.

Virginia’s community college system, meanwhile, is redesigning remedial education at all of its 23 colleges. Their goal? To increase the number of community college students who complete a degree by 50 percent. In fact, they are already halfway towards hitting their goal.

Other states, including my home state of Illinois, Arkansas and Michigan, have all instituted performance-based funding schemes that tie funding, in part, to common sense metrics like graduation rates, course completion, and constraining the growth in tuition at public institutions.

These are just some of the examples of states that refuse to throw up their hands in the face of budgets cuts in state funding for higher education.

We know states are being penny-wise and pound-foolish when they cut state funding for higher education. States that continue to disinvest in higher education are not going to reach their 2020 goals, and will have a harder time attracting and retaining industry in their states.

But I am inspired by so many state leaders, who are responding to funding cutbacks by making smarter use of scarce dollars.

As I said at the start of my remarks, the goal of having the best-educated workforce in the world is a shared goal. And, it must be a shared responsibility.

Working together, with your commitment and your hard work, I believe we can reach that ambitious goal by the end of the decade. The need to dramatically elevate college attainment is an urgent one--for our students, our families, our communities, and our nation.

Thank you all for your leadership and creativity in these difficult economic times. Please challenge me and my team to be the best partners possible. We strive, together, to lead the country where we need to go.

And now I would love to hear your thoughts about what can be done to regain America’s place as the best-educated workforce in the world by 2020.

Thank you.