An AGB Analysis:

What the Recommendations of the Spellings Commission Mean for Governing Boards

After a year of investigation, deliberation, and negotiation, a national commission of business and higher education leaders has submitted a report of its findings and recommendations to Education Secretary Margaret Spellings. Titled "A Test of Leadership: Charting the Future of U.S. Higher Education," the report warns that despite our system's formidable achievements we must not become complacent. "This commission believes that America must embrace a new agenda and engage in a new dialogue that places the needs of students and the nation at its center."

Some in the higher education community were skeptical during the commission's series of meetings, and their apprehension increased when early drafts of the report denigrated the efforts and accomplishments of colleges and universities. Now that the report has been published, discussion has begun on the challenges it poses. As debate unfolds in the coming year, trustees and campus leaders can expect to engage in conversations about the public's investment in higher education, the flow of student financial aid, a suggestion to establish a national database to track institutional performance, and ways to assess students' academic achievement.

AGB encourages presidents and boards to review the report and discuss how it affects their institutions specifically and higher education in general. Its recommendations merit attention and careful consideration by all stakeholders in the higher education community.

This document analyzes how the commission's six major recommendations intersect with the work and responsibilities of presidents and governing boards and offers questions for boards to consider. The full text of the Spellings Commission's report is available at www.ed.gov/about/bdscomm/list/hiedfuture/reports/pre-pub-report.pdf.

Following is a summary of the report's recommendations:

  1. Every student in the nation should have the opportunity to pursue postsecondary education. We recommend, therefore, that the U.S. commit to an unprecedented effort to expand higher education access and success by improving student preparation and persistence, addressing nonacademic barriers and providing significant increases in aid to low-income students.

    Preparing high school students for college is our education system's continuing challenge. As the president and board review the institution's student attrition and graduation rates, they also should ask whether the institution is successfully providing the academic services appropriate to the students they admit. This means greater communication and coordination with local K-12 schools not only to help strengthen teacher education but also to raise academic standards and align them with expectations for college-level work. It also means reaching out to disadvantaged high school students to inspire them to set their sights on college. And it means using institutional resources to target as much financial aid and academic support as possible to the qualified students who need it most—not just to attract them to campus but to enable them to complete their education.

    The board's finance committee can discuss whether the institution is providing sufficient need-based financial aid to students from low-income families, particularly underserved minorities.

    Questions for boards to consider:

    • What are our institution's goals for enrollment and retention of low-income and minority students, and how much progress have we made toward achieving them?
    • Are there sufficient campus counseling and orientation programs—particularly for first-year students—to help minimize the drop-out or transfer rates?
    • What does our institution do to coordinate educationally with state and local K-12 school officials and policymakers?
    • Do we know why students who leave our institution without a degree do so?
    • What is the impact of our allocation of need-based versus merit-based financial aid?

  2. To address the escalating cost of a college education and the fiscal realities affecting government's ability to finance higher education in the long run, we recommend that the entire student financial-aid system be restructured and new incentives put in place to improve the measurement and management of costs and institutional productivity.

    Public providers of student financial aid should commit to meeting the needs of students from low-income families. Policymakers and higher education leaders should develop, at the institutional level, new and innovative means to control costs, improve productivity, and increase the supply of higher education.

    There is a widespread feeling that Pell Grants (federal aid to low-income students) are insufficient in today's market, and that other subsidies, including institutional aid, too often go to students from high-income families. A revamping of financial-aid programs across the board might well mean encouraging new curbs on merit aid or tuition discounts, which many colleges and universities use to attract high-achieving students. Although Secretary Spellings is a forceful advocate of expanding need-based financial aid, the federal commitment to actually providing additional funds is uncertain.

    Regardless, the commission calls for substantive and visible efforts to achieve better stewardship of campus resources and track costs. To help presidents and boards examine the many issues concerning cost of providing a college education, AGB has begun a project on college costs that is convening higher education finance experts and other campus specialists with the intent of identifying major cost drivers, strategies to control costs, and ways for boards to engage in meaningful discussions on these topics. "With the funding and demographic challenges ahead, institutions will be challenged to show that they are doing everything they can to use scarce resources to increase access and degree production, while keeping tuition increases in hand," says a coming AGB paper.

    Questions for boards to consider:

    • Have all programs on our campus made sufficient efforts to identify the main cost drivers in their budgets and propose ways to maximize our resources?
    • How does the institution control costs without reducing quality?
    • How much of our cost structure is beyond our control?
    • How can we explain our costs to our stakeholders and the public?
    • Is our board meeting its responsibilities to be accountable as legal fiduciaries?

  3. To meet the challenges of the 21st century, higher education must change from a system primarily based on reputation to one based on performance. We urge the creation of a robust culture of accountability and transparency throughout higher education. Every one of our goals, from improving access and affordability to enhancing quality and innovation, will be more easily achieved if higher education institutions embrace and implement serious accountability measures.

    We recommend the creation of a consumer-friendly information database on higher education with useful, reliable information on institutions, coupled with a search engine to enable students, parents, policymakers, and others to weigh and rank comparative institutional performance. In addition to this consumer-oriented database, more and better information on the quality and cost of higher education is needed by policymakers, researchers, and the general public. Postsecondary education institutions should measure and report meaningful student-learning outcomes.

    This is one of the commission's most challenging recommendations, in part because consensus does not exist within higher education either on how best to measure educational quality and student progress or on how to communicate the subtleties of that information effectively to the public. Though the commission's suggestion that the federal government create a national database to track student achievement has drawn objections on privacy grounds—and these will need to be addressed—such programs already have shown promise in some states. Moreover, though there is no shortage of commercially published college-hunting guides and rankings, few agree on whether these actually spawn improvements, help consumers, or simply create more competitive stress.

    Some of the approaches to measuring student-learning outcomes that are less dependent on standardized tests and that respect higher education's long-standing accreditation system hold some promise. Secretary Spellings intends to convene the accreditation community to examine ways to measure student learning while respecting the diversity of our higher education system.

    Boards have a clear interest in this area. "As in other realms of institutional operations, it is up to the faculty and administration to uphold and improve academic quality," notes assessment expert Peter T. Ewell in a forthcoming AGB book Making the Grade: How Boards Can Ensure Academic Quality. "But it is up to the board to understand it and to see that it gets done. Ensuring academic quality is a fiduciary responsibility; it is as much part of our role as board members as ensuring that the institution has sufficient resources and is spending them wisely."

    Questions for boards to consider:

    • What do our assessment efforts tell us about student achievement on an institutionwide basis?
    • What have recent accrediting reviews said about our assessment strategies?
    • How can we demonstrate to the public our accountability for the academic progress of our students?
    • To what extent is our institution's success in preparing students for the workforce an indicator of our academic success?

  4. With too few exceptions, higher education has yet to address the fundamental issues of how academic programs and institutions must be transformed to serve the changing needs of a knowledge economy. We recommend that America's colleges and universities embrace a culture of continuous innovation and quality improvement by developing new pedagogies, curricula, and technologies to improve learning, particularly in the area of science and mathematical literacy.

    Federal funding for educational innovation and pedagogical research has dropped substantially in recent years, and the corporate sector and nonprofit consortia are attempting to fill the void. Online degree programs now are easily accessible from various providers across the educational spectrum, for example, and many institutions are exploring their own academic innovations. Boards can encourage their institutions to conduct research in areas such as pedagogy and learning in information technology, science, and mathematics. These have the potential for payoffs both in terms of student career success and for technology transfer that benefits society as well as individuals on campus.

    Questions for boards to consider:

    • How is information from student-learning assessments used to improve teaching and learning on our campus?
    • Are financial and professional support and incentives available for faculty to explore and use new teaching methods?
    • Has our institution conducted an evaluation of our curricula and pedagogies in science, technology, engineering, and mathematics?
    • Have we explored the implications for accreditation, quality control, and revenue enhancement in the area of online education?
    • Do students receive appropriate and rigorous general education and academic support to prepare them well for the modern job market?

  5. America must ensure that our citizens have access to high-quality and affordable educational, learning, and training opportunities throughout their lives. We recommend the development of a national strategy for lifelong learning that helps all citizens understand the importance of preparing for and participating in higher education throughout their lives.

    Some observers believe that this recommendation has the potential to reach as far into American life as the Morrill Act, the G.I. Bill, or the education initiatives of Lyndon Johnson's Great Society. While this is by no means certain, following through on this recommendation would dramatically alter the current "generation-by-generation" approach to higher education by greatly expanding access to workforce development and training programs for Americans of all ages and socioeconomic levels.

    With higher education enrollments skewing older, and workers changing jobs and careers more often than in previous eras, Americans will need to refresh their skills periodically throughout their lives. Campus leaders should explore whether the institution's existing mission and curriculum will stand the test of time as student needs and the educational and economic marketplaces evolve. Competition from new and existing education providers will challenge every college and university.

    Questions for boards to consider:

    • Where does our institution's unique approach to higher education fit in America's diverse system of higher education?
    • How would we generate or redeploy the resources needed to meet new competition or markets?
    • Is there an untapped market of adult learners and mid-career students to whom our institution should consider reaching out?
    • What are the demographic characteristics of our existing and anticipated student bodies? What percentage enroll without expecting to receive a degree? Will this continue in the future?

  6. The United States must ensure the capacity of its universities to achieve global leadership in key strategic areas such as science, engineering, medicine, and other knowledge-intensive professions. We recommend increased federal investment in areas critical to our nation's global competitiveness and a renewed commitment to attract the best and brightest minds from across the nation and around the world to lead the next wave of American innovation.

    This recommendation recognizes the critical role of the federal government in supporting research and science education. It is a call to increase such investments at all levels of government. It also raises some controversial federal policy issues involving visas for foreign-born scholars seeking to fill vacancies in American graduate programs and among high-tech employers. In addition, calls for new investment in knowledge-intensive professions will require increased cooperation among normally competitive colleges and universities in the form of partnerships and federally funded research consortia. Boards and campus leaders may discuss how best to promote international student and faculty exchanges both to enrich campus diversity and to inculcate students with an awareness of cultural and political differences among the world's nations.

    Questions for boards to consider:

    • How do we prepare our students for life and work in a global economy?
    • What percentage of our students enroll in foreign language courses or study abroad? How do we encourage them to do so?
    • Have our faculty and administrators maximized opportunities for winning federal research grants?

Campus leaders and national higher education associations already have begun to address the fundamental challenges the report raises. AGB encourages presidents to engage their boards in discussions of the recommendations of the Spellings Commission. As these discussions take place, a useful resource is the "The Leadership Imperative," the new report of the AGB Task Force on the State of the Presidency in American Higher Education. The full text is available at www.agb.org/leadership.