Indiana’s Higher Education Plan to Save the World

By Watson Scott Swail, President & CEO, Educational Policy Institute/EPI International

This morning, reported on Indiana’s plan to double the number of college degrees by 2025, from 60,000 to 120,000. Indiana, led by Governor Mitch Daniels (George W. Bush’s former Director of the OMB), uses a performance funding approach to higher education. In 2009, Daniels signed a 6 percent budget across-the-board cut, and most of higher education was hit with that same 6 percent. However, because of the performance-funding model, institutions were hit in a disproportionate fashion based on student success indicators as a shift away from FTE funding to completion-based funding. Most certainly, many states will be moving to a similar model, because, at least on the surface, it seems viable. Why pay institutions for how many “seats” they have compared to their success in getting students graduated? The challenge, of course, is that not all colleges are equal, as not all students are equal. How do we do this with our open admissions institutions?

I’m not necessarily saying performance funding is a bad idea. It isn’t. But how it is done certainly poses a challenge. Akin to President Obama’s recent suggestion that federal and state governments need to hold institutions accountable for their actions, things bog down when specifics are thrown into the mix. These policy widgets sound good, but how do you operationalize them in a fair and equitable manner for all institutions?


After reading the IHE story this morning, I came to wondering whether Indiana can do it. I am a self-professed cynic of degree rhetoric in America. I strongly believe that the discussion is less about how many and more about how “good” we educate students. We need to focus on quality, not quantity. If we can have lots of quality graduates, fab. But focusing on “lots” of mediocre seems inconsequential.

So I took off today, spending too much time looking at historical data on the issue. The table below brings data from two different NCES Digest of Education Statistics (1992 and 2010). For this comparison, I compare Indiana vs. the United States for the years 1988-89 and 2008-09. Using those data, I extrapolated to 2025-26, the year that Indiana says it will double the number of degrees conferred.

At first, I didn’t think they had a chance. How could they possibly increase two-fold in 17 years? Here’s what I found.

From 1988-89 to 2008-09, the number of degrees conferred in Indiana increased from 45,694 to 70,909. That’s an increase of 55 percent. As Adam Sandler would say, “Not too shabby.” The largest increases were in AAs, Masters, and doctoral degrees. In comparison, the number of degrees conferred in the United States only increased by 7 percent during that time period, buoyed prominently by a flat-line in the production of BAs.

Using these data, my calculations (back-of-envelope-type) suggest that Indiana COULD hit 104,818 degrees by 2025-26. That’s well under the 120,000 set by Daniels et al., but not inconsequential.

Of course, the ability of Indiana to hit its target depends largely on (a) demographic shifts; (b) public policy (e.g., increase in K-12 quality); (c) supply (e.g., how many seats?); and (d) demand. Who knows what will happen during the next 17 years? One thing for sure: college will be way more expensive (see my November 4, 2011 post), which will most definitely tamp down the demand curve.

Given these numbers and the impact of a higher and higher education, I don’t think Indiana has a shot at this. Of course, the public policy piece matters greatly: does Indiana build a vocational infrastructure to create most of these degrees in a cost-effective manner? That would make sense, because the greatest need for future jobs WILL NOT BE A BA OR HIGHER. It will be blue collar, mostly. Technicians, nurses, and people in service sectors. Contrary to recent reports, the future is not chock full of BAs and professionals. In this aging society, it is about service, health care, and food. Look at the BLS data. That’s what it says? Computers? We’ve already had that hump, but just like health care, we will always need computer programmers and ancillary workers. But BAs? Don’t drink the Kool-Aid. It isn’t there.

My biggest worry in this is that politicians, like Daniels, are pushing for more, but don’t really know why other than it polls well. Clinton did it (see TRA97; tuition tax credits). They all do it. But it doesn’t make it right. It just makes them electable.

If they really want to deal with this, let’s make sure all children can read at a high level. All of them, with minor exception for some cognitive disabilities. Then let’s give our children a world-class public education. If we do that, trust me, the “higher education” will take care of itself. That’s not really true, but it sounds good. We obviously have to dual track this issue on a policy level, but we need to start early in order to make the end game happen.

Bonne chance, Mr. Daniels.

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