Taking Charge: A State-level Agenda for Higher Education Reform

AEIBecause education is such a key element driving economic growth, states realize the need to prioritize education, but are often short on answers when facing large budget deficits. Andrew P. Kelly and Daniel K. Lautzenheiser of AEI Education recently released a new report entitled, “Taking charge: A state-level agenda for higher education reform,” that provides recommendations on what states can do to boost higher education despite tight budgets.

Kelly and Lautzenheiser state the problem as follows:

We cannot simply spend our way out of these problems. Though state appropriations for higher education increased in most states during 2012 and 2013, these increases come after years of steep declines. It seems unlikely that states’ spending will return to prerecession levels. Moreover, higher education will continue to compete for state funding with priorities such as health care and K–12 education. State leaders must seek out reforms that leverage existing investments more effectively and that put their higher education systems on a stable, sustainable path.

Here are the key points from their report:

  • Higher education is at a pivotal moment, with reduced state funding, soaring tuition and student debt, and emerging doubts about the value of a college degree. States, which control the purse strings, license new providers, and serve as the nation’s laboratories of democracy, are the best equipped to enact meaningful change.
  • Key challenges at the state level include policies that discourage innovation and do not prioritize student success, a lack of transparency, and failure to focus on cost-effectiveness and return on public investment.
  • States must explore innovations in data collecting, credit-transfer policies, incentives, measuring student outcomes, and even the delivery of higher education if they are to meet the new challenges in the higher education realm.

Kelly and Lautzenheiser come to four key conclusions on how states can meet the challenges of the 21st century:

  • creating incentives for schools to improve student success, become more productive, and experiment with new approaches
  • rewarding cost-effectiveness
  • improving transparency
  • encouraging innovation

They conclude, “The key is to create conditions under which a more productive, cost-effective, and student-centered higher education market can take root.”

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