US loses out to rivals as graduate numbers fall

April 13, 2007

The US higher education system has long been viewed as one of the best in the world, but is the American dream turning sour? Jon Marcus reports.

It's spring, when hopeful young applicants all over America wait by their letter boxes to learn if they have been accepted to the university of their choice.

But academics and policymakers have something even more nerve-racking on their minds: persuasive evidence that the supply of students is falling far short of what is needed to keep the US competitive with its international rivals.

The evidence is hard to swallow for a nation that for decades led the world in higher education provision. But the unpalatable truth is that prohibitively high university tuition fees and other long-festering bars to access have conspired to push the US from first to eighth place among industrialised nations in degree attainment, according to a major report.

It says the without drastic action the country will face a "degree gap" - the shortfall in the number of Americans with university degrees required for the country to remain competitive with its principal rivals - of 16 million by 2025, threatening the nation's pre-eminence in the global information economy.

Findings such as this "challenge the notion that the American higher education system is still the best in the world", said James Hunt Jr, chairman of the National Center for Public Policy and Higher Education and the former governor of North Carolina.

"In key areas such as college access and completion, the US has made little or no progress, while other countries have made substantial gains."

American universities would have to graduate 37 per cent more students a year by 2025 to keep up with the degree attainment of other Organisation for Economic Co-operation and Development nations, according to calculations by the National Center for Higher Education Management Systems.

To do this, they would have to tap into the fastest growing but most neglected groups of Americans: poor, nonwhite and immigrant students, whose representation on campus has remained small even as their proportion of the population soars.

"We can keep dancing around the access issue and say, yes, we absolutely need to expand access, but we're reaching a point where we don't have a choice any more," said Travis Reindl, director of the Making Opportunity Affordable project, a collaboration of several organisations and foundations that produced the study.

"All the growth in population is in the groups that have had the least successful time. If we don't fix that, we're going to fall farther and farther behind as a country."

By many measures, the US already has dropped back. About 40 per cent of Americans aged 25 to 34 have at least an associate's degree, compared with more than half in Canada and Japan. Belgium, Ireland, Norway, South Korea and Sweden already have higher rates of degree attainment.

By 2025, the proportion of residents in competing nations who have university degrees will reach an estimated 55 per cent, the report says. In some parts of the US, if current trends continue, the proportion will be less than half that.

Although the US is still in the top five for the percentage of young people who attend university, it ranks 16th in the proportion who graduate, awarding 18 degrees for every 100 full-time students enrolled, compared with 25 in Japan and the UK.

"Other nations have approached the need for higher rates of college participation and completion with a real sense of urgency we haven't yet seen in the US," said Patrick Callan, president of the Higher Education Public Policy Center.

The report challenges universities' mantra that they are doing everything they can to hold down costs. "Institutions can control costs and maintain access and quality if they do a better job of targeting resources to programmes that benefit students," it says.

Tuition fees and other costs have risen by 25 per cent at US universities, even when adjusted for inflation, squeezing not only low-income, but also middle-class students. The typical student borrows $17,500 (nearly Pounds 9,000) to pay for their tuition fees, more than twice the figure of ten years ago, even after adjusting for inflation.

And even after accounting for what financial aid is still available, American families with children in university pay as much as 42 per cent of their income towards tuition fees.

"Financial barriers keep hundreds of thousands of college-qualified high-school students out of colleges," said Juliet Garc!a, president of the University of Texas at Brownsville and chair of an advisory committee to Congress on student assistance.

That committee's report, Empty Promises: the Myth of College Access in America , found that nearly 50 per cent of low-income and more than 40 per cent or moderate-income high-school graduates who were qualified to go to university could not afford to do so, a total of 400,000 young people per year.

In some areas, 14 per cent of university-age adults from low-income families, many of them nonwhite, are enrolled on campus, compared with about 61 per cent from high-income families, many of them white. In some areas, 17 per cent of nonwhites enrol versus 47 per cent of whites.

Yet, rather than provide increased financial aid based on economic need, many schools are increasing so-called merit aid for high-achieving students, which helps improve their rankings in league tables even when those students do not need the help.

The amount of assistance universities dole out to lure these applicants has increased from 6 per cent of all financial aid to 16 per cent in the past ten years. "One of the issues that we're going to be focused on is how much university spending has been driven by that race for merit aid and what consequences that has had," Mr Reindl said.

"We've got a lot of companies in the US that have operations all over the world," he said. "If they can't get the talent they need in the US, what's to stop them expanding in Dublin as opposed to San Jose? That really underlines why we have to get busy in this country."

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