June 25, 2008 | Speeches and Testimony
Thank you, Benno [Schmidt, chair of the CUNY Board of Trustees], for that extraordinary and overly generous introduction. I thank you for the outstanding work that you continue to do as chairman of this very distinguished board. And I thank you, Pola [Rosen, publisher and editor-in-chief of Education Update], for this wonderful award.
I do not accept this award as an individual. I accept it on behalf of all of my colleagues because this is not the job of an individual. This is a job of a team of very important and hard-working people, starting with the board. I notice our vice chairman, Phil Berry, is here as well, and I thank you, Phil, for coming. We have a number of our presidents here who are part of the leadership team, and these are women and men of courage and vision who work very hard. And, of course, our faculty, with whom I have had the pleasure of working on a number of different projects, are extraordinary women and men. And to Peter McNally, I am delighted to know that you’re a Queens College graduate, and I hope that you remember your alma mater. The [Queens College] president is not here today, but I’ll make sure that he knows that you were here, and perhaps he’d like to have a conversation with you.
My remarks this morning are not about CUNY. They are really a brief journey through some of the issues I see in higher education today that I think need to be discussed. I start with a quote from a recent David Brooks column in The New York Times, in which he said that “globalization” is not about trade or manufacturing. It is about a skills revolution, “a move into a more demanding cognitive age….In order to thrive, people are compelled to become better at absorbing, processing, and combining information.” I think that, in many ways, summarizes some of the challenges that we have in the United States today.
There has been a very serious regression in public higher education today as a result of enormous amounts of resources being taken out of systems across the United States. Some of the finest state universities today have very little state support. The whole way of supporting public universities has changed dramatically, probably in the last 20 years. That regression away from state support is very troubling, and I think we have to look at the way in which we generate resources for these universities. If we don’t, we are in great peril.
The former president of the University of Michigan, Jim Duderstadt, said it very glibly. He said that state universities across the United States used to be “state-supported,” then they became “state-assisted” institutions, and now they are in jeopardy of being “state-assaulted.” I think that is an accurate statement. And while this is going on, around the globe there is a very different approach than that we see here in the United States.
A recent report from the 30-nation Organization for Economic Cooperation and Development (OECD) shows that compared to other OECD nations, spending on higher education in the U.S. has been stagnant since 2000, while increasing in 75% of the OECD nations reporting data, such as Spain, Japan, Norway, and the Netherlands. In the last decade alone, China’s Jiangsu Province–where Benno Schmidt is taking a leadership role in developing new partnerships–has built over 50 new universities, enrolling more than 700,000 students. And the National Bureau of Economic Research reports that between 1997 and 2005, the number of higher education institutions in China grew by 76%, from 1,020 to almost 1,800 institutions. In the so-called “BRIC” countries, Brazil, Russia, India, and China, the data continue to show an upward momentum in support for public higher education. We are going just the opposite way, and we must deal with this problem and deal with it decisively.
One of the reasons we need to do this is that as economies around the world are changing, we need to engage more students in the computational sciences, the natural sciences, and the life sciences, which are going to determine how we live more effectively and more healthily in the future. These areas need to be supported in ways that we have never seen before. We are just not seeing that support in the United States, and we have to do a much better job.
We also need to be aware that in the United States, we continue to have a very serious gap among students of various ethnic and racial groups that has to be dealt with effectively. A recent Brookings Institution study showed that only 11% of children from the lowest fifth of income earners achieve a college degree, while 53% of children from the top fifth do. The report concluded, “Those from certain economic and ethnic backgrounds are falling behind in earning college degrees, inhibiting their ability to increase their income.” Nationally, six-year graduation rates at four-year institutions were almost 67% for Asian students, over 60% for white students, 49% for Hispanic students, and an appalling 42% for black students.
So not only do we have a bifurcation here in the United States on the basis of race and ethnicity, but we also have a regression away from supporting all students, as well. This, I submit to all of you, has the potential to be a grave national security problem for the United States. Unless we develop an inflection point rather quickly, we are going to be in a very serious state here in the United States as we compare ourselves to our global partners. We must take this very seriously.
There are additional problems that we have to deal with effectively. The National Study of Postsecondary Faculty reports that the percentage of faculty age 55 and older has grown from 24% in 1987 to almost 35% in 2003. Almost a third of the full-time faculty who responded to the survey said they would probably retire in the next 10 years.
At CUNY, almost 48% of our faculty are age 55 or older. What that says is that two things are going to happen. In the next 10 years, we are going to see an out-migration in the next 10 years of large numbers of full-time faculty who were credentialed in the mid- to late 1960s with their most advanced degrees. As a result, we will see a highly contentious auction among institutions to engage and recruit the most able and promising young scholar teachers. What’s more, it’s not clear that the supply of people in our graduate schools is uniformly distributed across the various fields–the social sciences, the natural sciences, the computational sciences, engineering, the humanities, and the arts. There is not a uniform distribution in the production of new doctorates, especially in the sciences.
If you travel, as I have, to many of the major national universities and look inside the laboratories where Ph.D. students are being trained, you will be hard-pressed to find many American students. Few American students are going into these fields, in part because they are difficult–they require a lot of hard work and good preparation, which, I would submit, they are not getting to the degree required by universities. Compounding the problem is that when we invest money to train foreign nationals, visa problems often prevent them from staying in the United States if they want to, and many of them want to return. So we are making a huge investment, but that investment is not resulting in the kind of payoff that we need here in the United States in terms of new engineers, computer scientists, and those in the life sciences and the natural sciences.
There is yet another bifurcation, and this one is about economics. If you look very closely at higher education in the United States today, it is a tale of two classes of institutions: those that have deep endowments and those that do not. Those institutions with healthy endowments have benefited from strong alumni giving and inspired asset management and have seen great accumulation of capital as a result of good investment policies. Certainly, places like Harvard and Yale and Princeton are right at the top of the list. Some of the most distinguished public institutions also have very large endowments, places like the University of Michigan at Ann Arbor, the University of Texas at Austin, the University of North Carolina at Chapel Hill, and many of the University of California institutions. Many of these institutions act as if they are private institutions and have deep endowments that will allow them to remain competitive, while, as the New York Times recently pointed out, most of the other 4,500 higher education institutions in the country have endowments under $10 million.
It’s easy to get people and hire people, but it’s very hard to get the right kind of people, those that are really well trained and can build distinguished institutions. So I believe that we will soon have a situation in the United States in which a relatively small elite class of institutions, by virtue of their strong capital and endowments, will be able to compete for the most promising scholar teachers–who, as I noted earlier, are going to be in short supply to begin with in a number of fields.
I believe that this is going to have a very unsettling effect on the way higher education will be able to deploy its potential strengths, engage large numbers of students, and train them appropriately so that employers in this nation can stay competitive and remain on the forefront of change and competitiveness in the global market.
We expect increasing faculty retirements and more students enrolling–at least at CUNY, where we’re projecting large increases over the next few years. Increased retirements plus growing enrollments equals a substantial demand for more faculty. Unless we are in a position to compete for those faculty, we will be in a position of peril–not only at CUNY, but at some of the major state universities as well.
The points that I’m making were well known to the New York State Commission on Higher Education, and I was privileged to be part of the commission, which Eliot Spitzer put together a little over a year ago. We reported out with a set of very bold recommendations, including the need to have an infusion of additional faculty. But the report was largely silent about the ways in which we would pay for those faculty.
What we did at CUNY was to confront this issue directly, and this approach has been emulated by SUNY and was supported unanimously by the Commission on Higher Education. The need for investment in public higher education is at a critical point now. And the way to make that investment is really twofold.
First, we have to build an endowment. I think Benno Schmidt, from his time at Yale, understands better than just about anybody else in the room the power of endowments. It is largely about being able to exercise options in good times and in bad times. It gives you a base from which you can make decisions quickly and decisively to deploy revenue. Unless you have that kind of endowment support, you are not going to be able to do that effectively.
So, one of the things that we are supporting is the creation of an endowment for both SUNY and CUNY, an idea that was proposed by former Governor Spitzer and is now being embraced by Governor David Paterson. There are lots of ways you can skin this cat. There are lots of financial models that you could use, some politically less tenable than others. Certainly, funds resulting from the raising of private money, as Benno talked about moments ago, and off-balance-sheet resources from the state could be used to build endowments for both CUNY and SUNY. To me, this endowment is a sine qua non for a healthy institution on a going-forward basis.
The other thing that we need to be concerned about is the economic climate that we’re facing today. Governor Paterson recently indicated that the best economic models that the state has available today project about a $5.5 billion deficit in fiscal year 2009-10. For fiscal year 2010-11, the deficits are projected to grow to about $7.2 to $7.5 billion. And out a third year, the deficits are projected to be something north of $8.5 billion. As someone who has, in part of his life, made a living, or part of a living, making those kinds of projections utilizing mathematical models to econometric models, I understand that this is an inexact science. But we do know that these projections are based upon contracts that have already been negotiated, so we know how many dollars have already been obligated.
So here we have a situation in which the United States is confronting major challenges from abroad with respect to creating a flow of innovative workers, and, at the same time, confronting severe economic problems at home. How do we reconcile those two competing forces?
The governor has challenged all of us in New York State to come forward with innovative ideas to keep the various institutions in New York State healthy and alive with innovation. Three years ago, CUNY came up with a very different approach to the support of investment in public higher education. We called it the CUNY Compact. It subsequently became a central recommendation from the Commission on Higher Education both for SUNY and CUNY, and now for the State of New York. It’s a very simple idea. Instead of public universities doing what they have always done–waiting to receive revenue from state and local governments–the idea is that the institutions themselves, along with other stakeholders, take some of the responsibility for generating revenue.
For us, that means adopting a rational tuition policy at both SUNY and CUNY. It means that for the first time, CUNY and SUNY need to open up their books at the start of the fiscal year and, through resources generated through alumni and friends of the institution, put some of those dollars towards the support of the university. It means that we have to operate these very large and complex institutions through a much more moderate approach to management. When you put all of that together, what we are saying to the state is, instead of asking you for a dollar of investment, give us a portion of a dollar, say 20 to 32 cents on a dollar, and we will generate the remaining amount through other sources.
This idea has developed traction, not only here in New York State but across the country. When we discussed this new approach to funding public higher education in its early, formative stages, the American Council on Education said it was bold and imaginative. It is an approach that has to be embraced in order for public higher education in the United States to move forward and to have the kind of resources to educate the students, attract the faculty, and develop the laboratories that it needs in order to stay competitive.
We have a lot of work to do in the United States, and especially in public higher education. All of you are going to need to be partners in this effort. Are we up to the challenge? Absolutely. There’s nothing that I have said this morning that we do not have the capacity to get our arms around. We can aggressively move forward. I am privileged to work with some extraordinary college presidents. I am also privileged to work with a board that really gets it and understands that different approaches have to be taken.
Our job now is to convince government that a very different approach has to be taken. The ways in which we have supported institutions in the past in this state are outdated. They’re tired. They don’t deal with the challenges effectively. I think we’re going to be able to get it done, especially because of the work that you’re doing in the schools. You are sending students to us who are ready to do the work that we demand at a university, especially in mathematics, which had been a recurring problem. That’s why I was so delighted to see a real change in the performance of students at all grades across this state. I am emboldened by the work that you do. I am deeply privileged to be in the company of those of you who are being acknowledged today for the very good work that you do in the schools, along with all the colleagues with whom you work. Let’s join together in partnership to try to solve some very serious problems, and let’s move forward. Thank you very much.