America is losing its higher education advantage, with enormous repercussions.
International observers have long viewed America’s higher education system, including a cadre of high-quality major research universities such as Berkeley, as one of its most important socioeconomic advantages. As the first nation to pioneer the idea of mass higher education, the United States proved that the talent, training, and creativity of a nation’s citizens are as important for generating economic prosperity as, for example, its natural resources. It was true over the past hundred years, and is much more so now.
Increasingly, postsecondary education access and graduation rates are factors that influence the fate of nations. This widely understood fact is driving a worldwide effort to reform and reshape national and supranational higher education systems, often with the explicit goal of surpassing the United States. And that effort is paying off for a growing collection of global competitors.
Recent data from the Organisation for Economic Co-operation and Development (OECD), a cluster of 30 largely economically developed nations, exposes decidedly different trajectories. The United States still retains its historic lead in the number of high-quality research universities such as Berkeley, and in the total percentage of people with experience and degrees in higher education. But for the younger cohort, a different story emerges. After decades of steady increases, access rates have nearly flattened over the past decade and in some cases (as in California) actually have declined.
On average, the postsecondary participation rate for those aged 18 to 24 in the United States has fluctuated between 35 and 38 percent over the last decade, ticking up in the last few years. In contrast, many OECD countries are approaching—and a few have exceeded—the benchmark of 50 percent participation among this younger age group. Over the past decade or so, the U.S. slipped from 1st to 14th among nations with the highest postsecondary participation rates. We also once had the highest rate of students who entered a college or university and successfully earned a bachelor’s degree or higher.
Now we rank a meager 16th in the percentage of young people who get a degree, behind Australia, Iceland, New Zealand, Finland, Denmark, Poland, the Netherlands, Italy, Norway, the U.K., Ireland, Sweden, Israel, Hungary, and Japan. Sadly, the United States is one of the few OECD nations in which the older generation has higher rates of education attainment than the younger one.
Why are we lagging? One major factor is the concerted policy efforts of our competitors. England, Sweden, Germany, France, and many other EU members have set national goals to beat the U.S. in access rates. Most have also joined a pan-European compact, the Bologna Declaration, with the announced intention to reform and create collectively within the EU the most vibrant and competitive higher-education system in the world.
But the more troubling cause of decline is the underperformance in the U.S. system. Perhaps the largest drag is the breakdown in the pipeline between the nation’s secondary schools and its colleges and universities. In the 1980s, we ranked among the top countries in secondary graduation rates; now we rank only 21st. The U.S. Department of Education reports that the graduation rate among all secondary school students is close to 75 percent—and this may be an optimistic estimate. One recent study indicates that in some of California’s poor urban areas, the high school graduation rates are a tragic 44 percent.
Increasing costs for college and university tuition and housing, rising student debt burden, and an overly complicated and inadequate financial aid model are part of the problem—but not solely the problem, as some like to argue. Larger social and political realities are at play. The growing divide between the rich and the poor is more pronounced in this country than in most other developed economies. This has corresponded with a dramatic influx in recent decades of immigrants, many with low socioeconomic status and low education attainment levels. In California, over half the current population is either foreign born or has at least one immigrant parent. In the midst of this demographic shift, the country’s lawmakers have repeatedly lowered public investment in education relative to costs. In part, this reduction is a reaction to rising competition for limited tax dollars to fund prisons (a recent study shows that 1 out of 99 U.S. adults is incarcerated), Medicare, and other entitlements.
Particularly troubling is how far California has fallen in the educational attainment race. For most of the 20th century, California was the national leader in higher education access and graduation rates. Now, California is mediocre in terms of access rates, and ranks among the bottom ten states in the proportional number of students who earn a bachelor’s degree.
Yet somehow, the state retains a relatively vibrant economy. One reason is the excellence of its high-tech sector and research centers. Another is that California still ranks among the top ten states in the total number of residents with a bachelor’s degree or higher. The state’s older generation has a higher educational attainment level than the younger generation. And California relies heavily on importing talent: like researchers to Berkeley and technologists to Silicon Valley. Such a high reliance on talent from outside the state and nation, however, may increasingly prove problematic.
Global labor markets for highly skilled people are expanding rapidly. Europe is now the number one destination for international students. In emerging economies such as China, India, and Brazil, new research centers are being aggressively nurtured. More and more of these students will seek academic opportunities and jobs somewhere in the world other than California. But attracting talent in a global market and increasing the rate of degrees attained by the domestic population are not mutually exclusive goals. Indeed, these factors will be the hallmarks of the most competitive economies.
Today, the United States enrolls about 19 million students in degree-granting colleges and universities. To match the progress of our economic competitors, we would need to enroll an additional 10 million students over the next 15 years; currently the rate is a quarter of that. Because the private sector has limited ability or interest in growing, most enrollment expansion will have to occur in public higher education. In my view, we need a state and federal partnership similar to what existed in the 1960s, and the leadership of a more enlightened presidential administration, to refocus our efforts to increase college access and graduation rates.
But states like California cannot afford to wait for such a partnership. California’s political leadership should set an ambitious goal to match or exceed the access rate and degree production of the highest achieving states or, better yet, those of a group of international economic competitors. B.A. production rates offer perhaps the best single benchmark for the productivity and impact of a higher-education system. As it has in Europe, goal setting will focus discussion on what the public and private college and university systems need to collectively achieve.
The state also needs to reconsider where students go to college. I fear that California and the nation place too many students in underfunded two-year colleges, where most students are part-time and struggling with their finances. Attrition rates are extremely high, and degree completion extremely low. In California, nearly seven out of ten students are in a community college—the highest ratio in the country and a stark contrast to EU nations. Less than a quarter of the students who enter a California community college subsequently transfer to a four-year college. Even fewer of these obtain a bachelor’s degree.
California must improve the number of students who get a high school diploma and then enter a college or university. We need to improve the fiscal condition and vibrancy of our over 100 community colleges and reduce the number of part-time students. But even making these improvements, pushing so many students into two-year colleges will not significantly improve our degree production rates.
California, and campuses such as Berkeley, should also more actively attract the world’s expanding pool of talented students. Within the University of California system, only some 4 percent of all undergraduates, and only 18 percent at the graduate level, are international students—not enough, in my view, for promoting the state’s global role.
Guiding more students to four-year public institutions, funding them adequately, and making more room for international students will pose a significant political challenge. California must revisit the structure of its higher-education system and ask whether it is, as the British say, “fit for purpose.” Higher education is about the future, our economic competitiveness, and our cultural and political maturity. It is a reasonable ambition for California, with some of the best research universities in the world, to once again actively seek the greatest single higher education system in the world.