Chancellor's Recent Speeches

Remarks by Charles B. Reed
Chancellor, California State University
OECD/IMHE General Conference
Paris, France
September 13, 2010

Thank you, Dr. (Jamil) Salmi (Tertiary Education Coordinator, World Bank).

Today’s meeting comes at a critical time for universities. We are steeped in a global financial crisis. We’re also in the midst of a technological revolution that has created a demand for a knowledge-based workforce. Universities are at a critical juncture where we will need to figure out how to serve many more students with the same amount of resources – or in some cases even less.

To get a good picture of what we are facing, try to imagine a train that’s ready to leave the station. There’s a large group of 500 people who all want to get on the train. The train can seat about 100 people. If passengers are willing to stand, they can fit 200 people on the train.

But that still leaves another 300 people waiting at the station. How will we serve them? Should the engineers and porters keep working through the night? Should they ask people to wait several days until more trains can be re-routed? Or should they just turn those people away? It’s a simplistic comparison at best, but it speaks to a larger issue with higher education in our global community.

Right now there is an incredible demand for higher education. The job market is depressed, and people know that increasingly they will need high-level degrees to succeed in our highly technological, information-driven workforce.

But at the moment, the demand is outpacing the supply. There are simply too many people trying to get into the door. That forces us to make some difficult strategic decisions. How do we find the resources to serve more students? Do we cut back on what we offer? Do we raise tuition? Is there a way to package what we offer that is less resource-intensive? Do we offer shorter programs?

Of course, we want to avoid the “standing-room-only” solution in which we deliver a lower-quality experience to our students. And we want to avoid – at all costs – turning away students who need and want the opportunity to learn.

Global Picture
Nations across the world are experiencing some variation on this issue, as a global economic slowdown is driving more students toward universities.

In some countries like Brazil, South Korea, or France, which is in the process of a higher education overhaul, the government has preserved or even increased funding for higher education. The reasoning is that an investment in human capital can help retrain workers and hold down unemployment rates.

Some other countries like England have managed to avoid major cuts in higher education, but this year is shaping up to be a different story.

In the United States, the situation is complicated. President Obama has set a goal for the United States to have the highest proportion of college graduates in the world by 2020. However, in the U.S. the funding for universities is largely appropriated and managed at the state level. And the budget situation is dire in many states, especially the most populous state, California.

  • California’s student population is growing fastest among traditionally underserved groups, such as people from ethnic minorities, those for whom English is a second language, or those who are the first in their families to attend college. Many of you are experiencing a situation with similar students.

  • California’s depressed job market is leading more students to turn to higher education for job retraining or new opportunities.

  • California is undergoing a budget meltdown that has resulted in major cuts to its college and university funding. This means that we are called upon to serve more hard-to-reach students with fewer resources.

Put together, all of these factors add up to a very difficult situation for helping more young people earn college degrees.

At the 23-campus California State University, the largest four-year university system in the U.S., we are confronting these issues head-on, day after day. With nearly 450,000 students, we are the largest and one of the most diverse and most affordable university systems in the country. As the primary source for baccalaureate degrees for California students, we will need to serve the state’s rapidly expanding populations of underserved and minority students.

Yet our state’s budgetary crisis has made things extremely difficult. Last fall, with almost $600 million in cuts from our budget, we had to make plans to cut student enrollment by more than 20,000 students in order to match our enrollment with our state funding.

Denying students access to higher education is just about one of the worst things a university can do in a recession. But with such a dire fiscal situation, we were left with little choice.

While some of our funding has been restored for the coming year, we are still in a precarious position. That is why we have been driven to tackle this challenge with a multi-faceted approach. We are trying to focus on managing our limited resources with the most efficiency, and on helping our communities understand the critical importance of higher education.

Managing Difficult Budget Times

It helps to understand that at the California State University, we are not generally serving the traditional 18-to-22-year-old students. The average age of our students is 24, and almost all have jobs and some family to support.

To meet these students’ needs, we are offering more classes on evenings and weekends. This helps us reach more students who have full- or part-time work responsibilities, and makes better use of our facilities. Additionally, we have begun to offer more courses with an online component that would allow students to “attend” class remotely, from their home or place of work.

But we also have been brainstorming about how to make important changes that will allow us to serve more students and operate with greater efficiencies. Some ideas include:

  • Rethinking the 120-credit standard for graduation and reducing it where appropriate;

  • Using more of the “learning by doing” approach;

  • Moving the baccalaureate degree to three years when feasible;

  • Improving the community college transfer process to avoid duplication for students;

  • Offering more university-level courses at community colleges that are closer to where students live and work;

  • Charging more for certain disciplines to reflect expected income (so business would cost more than teacher education);

  • Adding administrative efficiencies.

Managing Public Perception
Another approach is to increase public awareness of the importance of higher education – and to increase public support for its needs. One important way to help the public understand the importance of what we do is by quantifying our institutions’ productivity and importance to the economy.

We recently showcased a study that credits the CSU and its graduates with producing $70 billion in economic activity and supporting more than 485,000 jobs – or one in every 32 jobs in California today. The study found that every dollar that the state invests in the CSU generates $5.43 for the state economy in total spending impact alone. When you include the enhanced earnings of CSU graduates, the ratio rises to $23 in total economic impact per dollar invested.

While our results are large given the size and scope of our university system, every college and university will by definition have some economic impact on its community – an impact that the institution should attempt to quantify and share.

With this information in hand, we are better able to speak with policymakers in our state capitol, Sacramento, and in Washington D.C. – as well as the general public – about the critical impact that higher education has on our workforce and economy. We use it to remind our public supporters that the responsibility for funding has to be shared by those who benefit: the individual and the society at large.

A second point to remember is that tuition increases are extremely unpopular with the public. To the outside observer, these price increases reflect careless spending rather than need. We need to help the public understand how we are improving efficiencies and becoming more productive. We also have to be more sensitive to costs. For example, we don’t have room to splurge on exorbitant salaries, facilities, or equipment.

Additionally, we must reprioritize our aid money to ensure that it goes to the neediest students. When tuition increases are reasonable, incremental, and justified in terms of the additional help they provide for needy students, they will be better understood and accepted by the public.

The third point is that we need to emphasize accountability – whether it be through national measurements, our own measurements, or both. The CSU has taken leadership on accountability measures in a number of areas such as teacher education and graduation rates – especially for poor students. We’ve agreed to tie our accountability reporting to state funding increases. And we created a “public good” page on our web site to demonstrate and quantify the ways that our universities and graduates are serving the state. That gives our policymakers and the public the satisfaction that we are performing our jobs as expected.

Expanding Partnerships
Last but not least, we need to seek out partnerships outside of higher education. The model of a university operating high up in an “ivory tower” is increasingly archaic. We need business and community partners who understand our challenges. And likewise, we want to understand what employers need from our graduates so that we can prepare our students to be successful in the workforce. By keeping these connections strong, we remain relevant in the “outside” world.

The good news is that in the last three or four decades, the walls have truly come down between academia and the world “outside.” Businesses are now supporting programs, internships, clinic and lab experiences. They can also offer staff members with valuable real-life experience to teach courses. The more they have to share with us, the richer the experience we have to offer our students.

In closing, our universities are at a critical juncture. We may suffer from funding shortfalls, especially if the majority of our funding is tied to a budget that is in freefall – but that does not mean we are powerless to effect change.

We should be confident in knowing that an investment in higher education will reap long-term dividends for any economy – and we need to make sure that the rest of society understands that and believes in us. That’s why we must continue to serve students with quality and accountability.

We also need to demonstrate that we have the flexibility and resiliency to deal with whatever challenges we come across. In the end our institutions will be stronger and our students will be better equipped to succeed in a dynamic, ever-changing world. And of course, we will get more students on the “train” to success.

Thank you very much.