“The Educational Challenge to the Nation and State”

October 3, 2006


Presentation to conference sponsored by the Austin Area Research Organization & United Way Capital Area by President Denise M. Trauth

We have heard alarms sounded from various places recently. They are sobering and wake-up calls for all of us. While I believe that universities and community colleges like those in Central Texas are rising to the challenges, we can improve and we the need help of our governments and our community.

To set the stage, let’s review some of the alarms:
The Spellings Report on the Future of Higher Education came out last month. This was a report, you recall, that the Secretary of Education requested from a task force of 19 educators and business people, chaired by Charles Miller, former chair of the University of Texas Board of Regents. The Spellings Report said: “We may still have more than our share of the world’s best universities. But a lot of other countries have followed our lead, and they are now educating more of their citizens to more advanced levels than we are.”
In a day when we know that everyone needs some sort of post-secondary education, 25 percent of students nationwide are not even finishing high school, and the fraction is higher in low-income and minority groups. The percentage of drop-outs in Texas is even higher -- 36 percent overall but 43 percent for African-American students and 48 percent for Hispanics.

We see further alarms from Thomas Friedman in his book The World Is Flat: Friedman says we tend to think of the jobs we lose to overseas companies as only the low-end jobs. Not so. Many very high-end research jobs are going overseas. Companies are investing increasingly in research and development abroad; they are not following the money -- they are following the I.Q.s.

We cannot begin to counter the job loss overseas without an educated workforce. At stake is our long-term national economic health. Two-thirds of the nation’s math and science teaching force in K through 12 will retire by 2010, just when the number of jobs requiring science and engineering degrees is growing by 5 percent a year. The number of Americans 18-24 who earn science degrees has fallen to 17th in the world. Universities in Asia produce eight times as many engineering bachelor’s degrees as we do. Sixty percent of all bachelor’s degrees earned in China are in science and engineering, compared to 31 percent in the U.S.; 46 percent of all bachelor’s degrees earned in China are in engineering, compared to 4 percent in the U.S. The number of engineering undergraduates in America fell by 12 percent between the mid-80s and 1990. Sixty percent of our nation’s top science students and 65 percent of our top math students are children of recent immigrants.

While we rejoiced at last month’s announcement from Dell that it will create 500 new engineering jobs here, we have to wonder if Dell will have a problem filling them.
Colleges suffer from what the Spellings Report calls an “expectations gap,” a gap between what colleges require and what high schools produce. Underlining the importance of studying four years of math and science in high school is the fact that fewer than 22 percent of students who took the ACT in 2004 nationwide were ready for college-level work in math, science and English.

Some indicators clearly show that a four-year math curriculum increases student success. Three states in the Southern Region -- North Carolina, South Carolina and Georgia -- have instituted four-year math curricula, and their students’ SAT math scores have risen an average of 23 points, with composite SAT scores showing an average gain of over 30 points, over the last ten years. In comparison, Texas’ composite scores rose 2 points over the same period, and some other Southern states’ composite scores actually dropped.
The National Assessment of Educational Progress says that only 17 percent of high school seniors are proficient in math. In Texas, 41 percent of all new students were under-prepared for college. Texas ranks No. 49 among the states in verbal SAT scores, and No. 46 in math scores. ACT composite scores are only slightly better, where Texas is tied with Alabama for 44th. Some will say that these ranking are misleading because Texas has more students taking the SAT and ACT than most states, but Texas is actually below the national average in the percentage of students who take these tests.

Two hundred thousand undergraduates in Texas’ colleges and universities are not prepared for the rigors of college work -- 22 percent of those in four-year institutions and 50 percent of those who go to community colleges. In these percentages, minorities are over-represented. While 32 percent of whites are not prepared, the percentage for Hispanic and African-American students is 54 percent.

Statewide, students who completed a more rigorous high school curriculum were half as likely to be under-prepared for college as those who took minimum requirements. (At Texas State, our admission standards are among the five highest for public universities in Texas, and even with those requirements, more than 8 percent of our first-time students do not meet the TSI obligation. TSI is the assessment that replaced the old TASP test, you may remember.)

Nationwide, some 40 percent of all college students take at least one remedial course. And remediation is not a situation to correct quickly: Only 10 percent of all new unprepared students who took remedial courses gained college readiness in one year in Texas. Only one fifth of all new unprepared students in Texas will earn a certificate or degree within six years, compared to almost half of the prepared students earning a credential in six years. This is costly: In the last biennium, general revenue appropriations for remedial education cost Texans $173.4 million.

As college tuitions rise, more students are bound to be left behind because of costs, and most of those left-behind students are ethnic minorities. By age 25-29, about a third of whites in the United States have obtained bachelor’s degrees, while just 18 percent of African Americans and 10 percent of Hispanics have a degree. In Texas the workforce has slightly fewer college degrees than the national average -- but substantially fewer than the best-educated states, which are Massachusetts, Connecticut, Colorado, Maryland and New Jersey.

Almost one quarter [22 percent] of the Texas population has less than a high school education - the highest percentage in the country. Thirteen percent of Hispanics have an associate’s degree or higher in Texas, compared to 40 percent of whites. In our state, the education gap between whites and minorities is widening, not closing. Despite increases in educational attainment for the Texas population as a whole, educational attainment for Hispanic males has actually declined over the last 20 years.

Of course, income is a factor. Low-income students, regardless of race, who score in the top quarter of standardized college admission tests attend college at the same rate as high-income students in the lowest quarter. Texas’ median family income remains well below the U.S. average. In fact Texas ranks 37th in the country. And our lower-income student population is the fastest growing segment of our pubic schools. Texas is No. 6 in the nation in K-12 growth, increasing by 11 percent between 1999 and 2005 with the largest percentage of growth among lower-income and minority students. Yet, Texas was the only state to cut average per-pupil expenditures in fiscal year 2005, resulting in a ranking of No. 40 nationally, down from No. 25 in 1999.

Between 1995 and 2005, average tuition and fees rose 36 percent at private four-year colleges and 51 percent at public four-year colleges. In Texas between 2002 and 2006, average tuition and fees at public universities increased 61 percent and at community colleges 51 percent.

Costs have risen in large part because state funding nationwide has fallen to its lowest level in more than 20 years. In 1980 almost 10 percent of states’ budgets nationwide was spent on higher education. Today it’s 7 percent. Nationwide, the state share of per capita personal income going to higher education has dropped almost 20 percent since 1977. Educational appropriations per FTE in public higher education institutions decreased 12 percent between 1991 and 2004.

Again, Texas is below average. Across the country, an average of $9 per $1,000 of personal income is appropriated for higher education. In Texas it’s $7. From fiscal year 2002 to fiscal year 2007 (the year we are in), the Texas state budget was cut in terms of real dollar, per-student funding by 20 percent for universities and 35 percent for community colleges. It is common place on state university campuses for financial officers to say that we used to call ourselves “state supported.” Then we changed it to “state assisted,” and now we should change it to “state located.”

Lack of preparedness, narrowing access and rising costs will have profound consequences for business and for the future of our nation and state. The U.S. was once the unquestioned leader in educational attainment. Today we are ranked 12th among major industrialized nations in higher educational attainment, and another six countries are close behind us. Countries ahead of us include Canada, Japan, Ireland, Sweden and Israel. Ninety percent of the fastest growing jobs in our future economy will require postsecondary education. Jobs that require only on-the-job training will see the greatest decline.

There are also “hidden costs” to the state, if we continue on our current trajectory. Health care costs rise when citizens are uninsured, and percentages of those insured increase with educational attainment. Nationwide 8 percent of people with a bachelor’s degree are uninsured, compared to 25 percent of those with no high school diploma. In Texas costs are even higher: Texas has the highest non-insured percentage in the country -- a 24 percent average but 39 percent for those with no high school diploma.

A study by the Texas Higher Education Coordinating Board of the cohort of 7th graders in 1992 shows that only 13.8 percent graduated with a bachelor’s or associate’s degree from a public Texas college by 2004. We don’t know how many went on to private or out-of-state universities, but a good estimate is that probably only 18 percent of 7th graders ever got a degree.

In the last 20 years, 2.2 million students have dropped out of Texas public schools, costing the State of Texas an estimated $500 billion in forgone income, lost tax revenue, increased job training, welfare, unemployment and criminal justice costs. If Hispanics, African-Americans and native Americans achieved the same levels of education as whites, by the year 2020 Texas’s personal income would increase by $46.5 billion, estimated in year 2000 dollars.

Of course, we often tend to measure the need for higher education in dollars, and that is important, but it’s more than that. There are quality of life issues as well. College educated people by and large don’t go to jail; they live longer, smoke less and vote more. So higher education is important not only to our productivity and our gross national product, but also to our health and our democracy.

Let me close by telling you about a statue that we unveiled at Texas State last month. It’s a likeness of our alumnus Lyndon Johnson as he might have appeared walking down our Quad as a young man. It was a gift from our students. At the base of the statue is a quote: “This nation cannot rest while the door to knowledge remains closed to any American.” Johnson said that and passionately believed it. It’s a good thing for us to remember as well.

Thank you.