Higher Education Policy Conference

Remarks by Hilary Pennington, director, U.S. Program Special Initiatives

Thank you very much, Paul, for that kind introduction and thank you everyone for the warm welcome.

I am honored to share the stage with two long-term friends, Stan Jones and Keith Bird, who have been incredible leaders in giving more young people the opportunity to earn a college degree.  In Indiana, college going rates have more than tripled, and continue to increase at a faster rate than the national average. And in Kentucky, the retention rate at community colleges has increased by more than 20 points as the Career Pathways program has strengthened institutional relationships with employers and increased the perceived value of education for Kentucky’s young people.

I’ve been in the trenches with many of you over my years at Jobs for the Future and the Center for American Progress, and I know what it’s like to do this work with modest resources and from every possible direction—inside, outside, top down, bottom up.  At JFF, we staffed comprehensive efforts in states to link their economic development, workforce development and education systems. And we helped seed and grow “disruptive innovations” like youth apprenticeship, school-to-career and early college high schools.

Yet, despite our collective efforts, we are not where we need to be. Like all of you here, I feel an enormous sense of urgency and impatience about the distance yet to go. Luckily, Bill and Melinda Gates share this sense of urgency and impatience, along with relentless optimism that working with partners, we can solve big problems.

Today I'd like to say few words about the Bill & Melinda Gates Foundation, outline our expanded focus in the United States, and ask for your partnership in our efforts.
The guiding principle that drives Bill and Melinda’s philanthropy, the axiom that underscores the work we do at the foundation, is a simple one: “all lives have equal value.”

Overseas this core belief has led to the foundation’s efforts to stop the transmission of HIV/AIDS, eradicate malaria and polio, improve nutrition and sanitation in the developing world, and create opportunities for the world’s poorest citizens to lift themselves out of poverty.

Here in the United States, we believe the greatest avenue toward reducing inequity and increasing opportunity is to expand access to a high quality education. To date, the foundation has supported more than 1,800 high schools around the country and worked with districts and states to raise graduation rates and prepare all students for college, career, and life.  The foundation also launched the $1.5 billion Gates Millennium Scholarship program to ensure 20,000 of our nation’s most promising low-income students of color get the financial support they need to earn their college degrees.

About a year ago I was invited to join the Bill & Melinda Gates Foundation as it considered an expansion of our work in the United States. As our co-chairs began looking at ways to expand our domestic efforts they posed a single question to me and Allan Golston, the president of our U.S. Program: If we want to dramatically reduce inequities in this country, what more should we be doing? And they made it clear: everything was on the table.

We spent the first half of the year listening and planning. We met with policy experts, practitioners, other foundations, and education leaders. We analyzed reams of data and reviewed options for where we might invest. There were many legitimate possible choices—the justice system, social support programs, community and economic development. We presented several of these to the co-chairs, but in the end we came back to education, this time higher education, for two reasons:

• First, and most importantly, education is one of the most significant predictors of life outcomes for adults, and the single strongest predictor for their children.
• Secondly, it is a highly leveraged bet. An expanded investment in education to include postsecondary education enables us to build on much of the foundation’s domestic work to date.

As our high school work aims to increase the number of young people who graduate from high school ready for college, this new work will focus on increasing the number of young people who go on to actually complete a postsecondary credential. Vicki Phillips, Director of our Education Program, and I will work very closely together to maximize the synergies between these two strategies and apply the lessons learned from our first seven years as a foundation about importance of advocacy, partnerships, and sustainability.

I don’t have to tell this audience about the value of completing a postsecondary education. I want to applaud SHEEO’s Open Letter to the Presidential Candidates and its call for one million more degrees a year every year for the next 16 years. Your goal reflects the size and scope of the commitment needed—and the understanding that we will only remain internationally competitive if we enroll and serve better new immigrants, working adults, low-income and first generation students.

As you noted, in almost every country in the Organization for Economic Cooperation and Development, young adults are better educated than older adults. But in the United States, only 40 percent of our young adults have an associate degree or higher—no improvement over the retiring baby boom generation. By the end of the next president’s first term, the United States will have three million more jobs requiring a bachelor’s degree and not enough college graduates to fill those positions.

Together, we must expand our historical focus on access to include completion to ensure more young people, especially low-income and minority students who have traditionally been poorly served by our institutions, get to and through college with a credential that has value in the work place—whether an apprenticeship, a technical certificate, or a two or four year degree. To and Through: We can’t do one without the other.

To this end, we at the foundation have set an ambitious goal for our efforts that complements yours:  To dramatically increase the number of young people who earn a postsecondary degree or credential by the time they reach age 26.  The specific goal we have set ourselves by 2025 is to increase from 25 percent to 60 percent the number of low-income young adults who complete a credential.

What will the foundation do to reach this goal?   As we have developed our plans over the last six months, we have considered where we could have the most impact and reached out to leaders across the country who are working on these issues. Here are some of the concerns we heard:

• Concern that states are not able to measure the progress of less well-served populations;
• A lack of affordable options for earning a first credential;
• Developmental education courses that become fast off-ramps from college;
• Weak support systems for first-generation, adult and working students;
• Public financing that does not value completion and gives more resources to institutions that serve better prepared students than to those serving under-prepared students;
• And an overall lack of commitment to increasing significantly degree attainment in this country.

We identified three key entry points where we think we can contribute best:

• Building commitment to the goal of dramatically improving degree completion
• Improving the performance and productivity of existing postsecondary systems, and building additional capacity—in part through technology;
• Empowering and supporting students to succeed

This focus on students will be the key vantage point for all our work. While we will support efforts to strengthen key institutions, like community colleges which are the door to higher education for most under-represented students, our strategy aims to improve results for students. In this sense, we are agnostic about institutional forms or delivery mechanisms. We want to identify, support, and help scale what works best to dramatically increase degree completion and labor market attachment for low income young adults.

Let me give you a little more detail about our plans.

1. Building commitment to increased completion of credentials with value in the labor market

We will focus on three areas:

• First, commitment to communicate the urgency of the goal—and to bust the myths about current performance that keep this country complacent.

  As you all know, whether it’s on the national, state, or local level, we won’t have success in changing policies without first changing opinions. Ultimately, to be successful, we will need to create a national dialogue about a crisis few people outside of this room understand. In recent focus groups we held with a cross section of Americans, everyone immediately recognized that a college degree is the functional equivalent of a high school degree from decades past. But most assume the U.S. has good postsecondary completion rates.

• Second, commitment to policies that support degree completion: We need to work with our partners to shift higher education policies so they help students not just to enter postsecondary education, but to complete credentials that have value in the labor market. This includes moving state funding formulas from paying for enrollment to rewarding institutions for degree completion. And developing financial aid policies and incentives that encourage completion, such as the performance-based scholarships tried in Louisiana that reward students for enrolling on more than a part-time basis. Or loan forgiveness programs that could work in much the same way, forgiving a higher percentage of student debt the further along they get in school, giving students a greater incentive to finish, and ensuring they are not saddled with massive debt upon graduation.

• Third, commitment to data systems and research so that we know what works and what doesn’t: The Gates Foundation has been—and will continue to be—relentless in pushing for better information and facts. Our willingness to work deeply in states will be highly influenced by states’ willingness to build student-level data systems and use them to improve performance. We are excited by the work in places like Washington where the community college system has used data to identify “tipping points” (like first year completion rates) that correlate with degree completion and to begin awarding incentive dollars to institutions that perform well against those tipping points.

  We will also invest in research and knowledge that enriches the field. To this end we will fund longitudinal research aimed at creating an evidence base that will enrich our work and the work of our partners, and we hope to attract more scholars to the question of how to improve degree completion for under-served populations.

2. Our second priority is improving performance and yield in the postsecondary system

   If we want postsecondary institutions to put a greater focus on completion, we need to understand what helps them succeed or fail at that mission. In developing our strategy, we did a preliminary analysis of the systems costs in postsecondary education and learned that over half of all expenditures are spent on students who never complete a degree

   The majority of our investment will go to performance improvement, focused to achieve three outcomes:

• Scale what works to increase degree completion in existing postsecondary institutions: As John Gardner argues, we must target and institutionalize the most effective, proven retention strategies and ramp them up, moving them from the institutional margins to the mainstream. There are promising models underway today, but they are not being adopted on a large scale. We know this is about more than just sharing practices. Our research shows that the lowest performing community colleges are just as likely as the highest performing ones to adopt best practices, but the highest quartile community colleges have a completion rate four times higher than the lowest quartile—41 percent versus 9 percent.   Success has to do with aligning organizational structures, rewards, and performance management around the goal of completion. We will help accelerate the adoption and expansion of approaches with demonstrated success.
• Improve developmental education: We will help address one of the largest loss-points for low-income, under-prepared students—remedial or developmental education. Sixty percent of college students now require some remedial education in math or English. The outcomes?
• One-third complete the course and pass the exam
• One-third complete the course and fail the exam
• And one-third drop-out before reaching the end of the class.

We cannot achieve the goals we seek without improving ways to accelerate academic catch-up for under-prepared students.

• Build and scale alternative models including innovative learning technologies: Doubling the numbers at a reasonable cost to the public will require educating more young people better, at lower cost to students both in time and money. It will also require taking college out of the classroom, using technology as Rio Salado and Western Governors University do. Or engaging employers, like MetroCollege in Louisville does through its partnership with UPS. Or developing new “on-ramps” like the non-profit, Year-Up.

  Or learning from the military, the largest employer of young adults, and one of the leading providers of associate’s degrees in the nation. Because military personnel are dispersed around the world, the military has been forced to innovate, using distance learning technologies and “unbundling the value chain”—meaning separating things we assume have to go together, such as having the same institution provide intake, student supports, course delivery, assessment and awarding credentials. 

  We will share lessons learned from innovative educational organizations like the military, for-profit providers, and leading community colleges who have demonstrated success. We will also work to increase the capacity of these promising models to enable widespread adoption of what works best.

3. Empowering and supporting students to succeed

   Unlike students in K-12 education, young adults are not required to attend postsecondary institutions. Some don’t see the value of a degree to their lives. Many face financial and family pressures that make a college education nearly impossible. We believe that reaching our goals will require empowering and engaging young people. This means both creating better opportunities for young adults who have not taken a traditional path and developing young adults as informed decision makers. We will make investments to:

• Build on-ramps and student supports: When we analyzed the cohort of low-income young adults who are our target population, we found that only about one-third of them were enrolled in postsecondary education (and unlikely to complete the credentials they came there to get). Roughly two-thirds were in the workplace or disconnected from school or work. To succeed in doubling the numbers who complete credentials with value in the labor market, we have to go where these young adults are and create on-ramps to postsecondary from work and the community. We see employers as critical partners. We are interested in expanding cooperative education programs and programs that embed the acquisition of basic skills in occupational courses (like those at IVY Tech, Community College of Denver, and the private proprietary colleges). We want to create on-ramps from community organizations to community colleges.
• Engage young adults as informed consumers: And we want to engage young adults themselves. The $64,000 question is how can we make getting a degree more attractive and affordable for young adults, many of whom are very ambivalent about formal education? First, we can learn from the sophisticated market research tools so many private corporations use to sell their products to the same young people we care about. In recent research conducted for us by Leo Burnett, we were able to probe the fears, motivations and aspirations of young people as they consider going to college. We learned that of those students who will graduate from high school and not go onto college, half are so fearful of the cost of an education, and have so little knowledge of how the system actually works, they simply never enroll. For them, college = debt, and they are not interested. The remaining young people are either directionless—with no idea what they should do next—or they fundamentally believe college is unnecessary. We hope to arm our partners with sophisticated information tools so that they can more effectively engage young people and get them to and through college.

  Second, once more young people get interested in a postsecondary credential, we can make it easier for them to be informed consumers by giving them the tools necessary to make good decisions when selecting degree programs. We are interested in exploring social networking strategies, and in putting information on the Web that will allow students to compare schools and programs and pick the one that works best for their needs.

  Finally, we are interested in exploring a range of incentives that can change the calculus young people make between short term sacrifice and long term gain.

Based on the best of our knowledge today, we believe these three strategies—building a national commitment, improving system performance, and empowering students—are the best way we can contribute to doubling the number of low-income adults who complete a postsecondary education.

We do not enter this work believing we have the answers. We are structuring the first four years to test several hypotheses about how best to have impact.

Over the next four years we will ask ourselves:

• Are these interventions having the impact on student completion that we envision?
• Which strategies are working best? How can we grow/replicate them more quickly?
• Are we building a sustainable collaboration among partners so that successful interventions continue beyond our funding?
• Are systems and institutions changing quickly enough to reach the goal?
• What are the public policies and revenue sources that will best support improved completion for low income students over the long haul?

What we learn in answer to these questions will help us refine our strategies and ultimately will shape how the foundation goes forward. As I said earlier, we will keep a sharp focus on what works best to help low income young adults succeed.

We see you as critical partners in the effort to increase postsecondary completion. The visionary efforts of many of you in this room make us humble and they give us hope for what we can accomplish together. Many postsecondary systems and governors have set enrollment and degree completion targets for their states (like Michigan, Arizona, Colorado, Ohio, and Texas). Other foundations like Lumina, Ford, Carnegie, Joyce and Mott have led the way in helping make college more accessible to thousands of young adults. Our task is to build on this great work.

In the U.S., we pride ourselves on the great achievements of the 20th century, when our nation used legislation like the G.I. Bill and the Higher Education Act to help expand access to higher education. And through desegregation, the Civil Rights Act, and the Individuals with Disabilities Education Act (IDEA), we were able to create better educational opportunities for all students. These efforts did more than just help individuals improve their lives; these efforts improved the life of our nation. They helped create a more highly skilled workforce, better jobs, and a stronger economy and democracy.

For this to be the ongoing story of our nation in the 21st century, we must set a new and ambitious goal: to aggressively reach out and engage students and communities where completing a postsecondary education is out of reach.

I know from my own family’s experience what a difference this makes. My younger sister was born with learning disabilities in the time before IDEA. She was bused to the special school district in St. Louis, a pretty grim place. My mother, who was working and raising us on her own after the early death of my father left her responsible for three children age 3 and under, single-handedly arranged a work-study program for my sister at Children’s Hospital that got her out of a dysfunctional high school and into rich work-based learning where she could participate in a professional community and earn a certificate as a nurse’s aide. Yet despite the hard-won victories for which my mother and sister fought, there is still a huge disparity between the life chances that she and I have received. There is not that great a difference between my intelligence and hers, yet I am here today talking to you as a foundation “expert,” and my sister works, after 20 years in the same nursing home, for $8 an hour as a nurse’s aide. So, like many of you, I have a passion to build the kinds of systems in this country that will make better education and career progression available for all different kinds of people, no matter where they start from and no matter what their learning needs are.

My sister’s story reminds me of the powerful words of Frederick Douglas:  “Some know the value of education by having it. I know its value by not having it.” In the 21st century, the United States cannot afford to have any more of its young people come to learn the value of education by not having it. Reaching our mutual goals of dramatically improving postsecondary completion for people being left behind in our great country will require transformative change, not just incremental improvement.

We look forward to working with you on this mission, and we thank you for inviting us here today.