1.   Gene Merriam, former Minnesota State Senator, July 23, 2010--The state needs to get a handle on what’s driving higher education costs--“Many would say we see in higher education over the past 30 years a real decrease in productivity,” a participant observed. Third party loans have enabled tuition to rise without putting pressure on the institutions. So it seems there must be opportunity to improve productivity?

“I’d like to understand what’s contributing to these costs in higher ed,” Merriam agreed. If you look at the cost for measure in higher education it’s increased at a rate faster than inflation. “I’ve got a lot of conjecture, but don’t know myself; I’d be interested to look at that. I think it’s necessary to get a good handle on what’s driving costs in higher education.”

The need for something to change is going to become more apparent as students will not be able to continue to obtain more and more third party loans, Merriam said. The value of homes is going down affecting the capacity of parents to borrow against them. Students are getting ‘gapped’ more and more—the void between cost and money in-hand—and students are turning more to personal loans. So what we’ve got is the worst possible model in business: premium pricing, deep discounting. The amount of debt students are taking on is postponing other things they would do in life.

David Metzen, Office of Higher Education, July 9, 2010--The largest program of the Office of Higher Education is the Minnesota State Grant program - Of the office’s activities, 80-90 percent are devoted to administering state financial aid programs. State grants totaling $150 million are awarded by need, and distributed to accredited institutions across all sectors of the higher education system—including two and four-year, public, private, and for-profit institutions. “Not all states do that. I believe in choice,” Metzen said, “including for-profit.”

At one time the Higher Education Coordinating Board (HECB) performed this function, reaching across all systems. After a merger of the state technical and two-year colleges and the state universities, HECB was re-positioned as the Higher Education Services Offices (HESO), and maintained the same board. Then under the Pawlenty administration the board was removed, and the director was made a direct appointment by the governor and given the task of policy review and advisement.

            2. But it can also play an important role in surfacing information---The agency lacks power, Metzen said. The best you can do is jawbone, do things like this (speak to the Civic Caucus) to get the message out. Information is its advantage: “This is one of a few agencies in the state that has an education research function.  It is doing great higher education research, unbiased and student-centered,” he said.  “We don’t have a parochial interest.”

            3. Traditional institutions can learn from for-profit schools--Frontline did a story, Metzen said, about how for-profit colleges are “ripping off” students. But most of the for-profits in Minnesota are doing good work, and are clean operations. Competition from for-profits is good.

He commented that he used to go out to the best schools—“some call it best practices, I call it cherry picking”—and see what they are doing right.

“If you had told me two years ago that the for-profits were doing a great job, it would have surprised me.” The question is not how many students start, but how many finish. Just having students go (to college) isn’t the only goal. For-profits take non-traditional students, so it is challenging to assess their effectiveness here—but they have an incentive to keep students enrolled.

“Something the for-profits do effectively is to put the best teachers in the beginning courses to hook you, then work hard to keep you in.” And he believes they have incentive for quality control in their teaching: You don’t keep your job there if students do not give you good reviews.

            4. Change needs to come—will come—to higher education--There will be winners and losers over the coming years. With the governor leaving there is an opportunity to point out some issues that are facing higher education that ought to be identified as priorities to be worked on now.

He likened it to a bubble: Costs, spending, tuition have been rising at unsustainable levels. If resources were not a constraint this trend could continue, but they are. More students are now going back to school, reacting predictably to a down economy. This puts strain on aid programs, and results in more borrowing.

The potential for technology is dramatic, and its capacity for personalizing learning is starting to manifest. Visiting a vocational school recently Metzen observed a welding program—something that requires intensive personalized instruction—now performed 90 percent by computer with enormous savings in labor cost, and improved productivity.

Further, demographics are changing. The old model is not going to work with the new populations. Online learning and hybrid models will enable greater flexibility. The state needs to continue rethinking what higher education should be: There is a myth out there that it’s a four-year college. We should be saying you need at least two years beyond high school. The definition of a student today is different. More than 25 percent are 25 or older. The market right now for those that need to be retrained is 25-40 years old.

            5. Cash shortages will drive change in higher education--It’s very difficult to drive change when you have money, Metzen said. When you have money its hard not to have all programs, not to keep all the same things.

But with the state $6 billion in debt even the most aggressive tax-raising scheme cannot close the deficit. Higher education is not part of anyone’s stump speech, and we should expect continued cuts to state aid.

“My basic premise is that people don’t change unless they see a need for it. It is like a drinking problem: you first need to see the problem. As long as you’re flush with money you don’t see the problem.”

            6. Post-secondary schooling must become more productive--For the cost of K-12, Metzen figured, for 10 hours a day and at $12k a year students are being supervised the whole time. Look at higher education—how many hours a week is there a paid instructor in front of students? 10-12 hours per week. Yet overall higher education costs are high.

The inflationary pressures are enormous. “I don’t have the solution, he said, “but there’s no turning back now. There’s no making this up.” He told the group that he went on the University of Minnesota’s Board of Regents in 1997 to hold down tuition. Yet while he was there tuition went up 81 percent, and in his first seven years he voted for the increases. There was no stopping it. “The bubble, if it hasn’t burst, will. This can’t continue. This is unsustainable.” Old ways of doing business are over. Note the recent history of the postal service, newspaper industry, etc.

One of the participants said many people do not understand the “disconnect” between the inflating cost of the system, and the ability of people to pay. Parents used home equity loans in the recent past, but those are gone now too. There is a third party, the financial lenders, that has enabled this growth. As that funding source diminishes, the situation will change.

In an attempt to understand the nature of the problem, a member asked Metzen what accounts for the increased cost of the system? He replied that he does not know—but education is a labor-intensive industry. Labor is expensive, and labor costs have risen faster than economic growth.

Most colleges, even without salary increases, are seeing costs increase five to seven percent per year. 

The root of resolving the problem of cost is improving productivity. This does not simply mean adding students to classrooms, he said—the state needs to look at who is doing what, and how they’re doing it.

A participant asked whether anyone is looking for examples of productivity from private industry. She shared a story of a university hospital that realized it had to resolve costs that were rising too rapidly. They set up committees to pick apart the hospital’s business model and found ways to improve it, ultimately adopting some of Toyota’s lean manufacturing principles. Their cost curve flattened. For-profits are doing that in higher education, Metzen said.

            7. There is no strategy presently to manage the changes that need to occur--A participant noted that there is much talk about the ‘need for change,’ yet we do not all have answers, now. That implies the need for a change strategy—a way to get the new ideas that are needed. Is anyone doing that now?

Not particularly, Metzen said, but people are innovating. He went up to Superior and was surprised with how they’re incorporating online learning. There are many small schools and districts in northeastern Minnesota using online learning facilitated by the university. And they are doing really well with the unions there—though you can’t blame the unions for being scared, he observed. This is untried territory.

On the question of managing change, he said administrators are in a delicate position. “One of the things I’ve learned being a superintendent,” he said, “is that some of the best administrators are pains in the butt. The question is will they fight for kids or fight for new office desks for themselves.” We need to support administrators who are leading change.

Support from faculty is essential for a post-secondary administrator. “Once the faculty gives you a vote of no-confidence, you’re in trouble—if you push too hard you’ll lose their confidence.”

 College presidents need to balance the pressure.

A participant wondered if the governor were to ask Metzen if he could depend on the existing systems to handle the changes that need to occur, would he agree or is this something that needs a new approach?

“It will be tough. Institutions are geared to look after existing systems. The new leaders of the two main systems will inherit terrible budgets. You’ve got many presidents. The labor contracts are like Christmas trees—you add a new ornament each year and eventually it falls over.”

A participant mentioned a comment made by a senior professor at the U of M about the financial position of the University: “We’re going over the cliff.” So there is an awareness of the situation there. The one thing that absolutely exasperates this professor is the law school. Law school buildings are used only part time, but “you can never shut off the lights, can never turn off the heat or air conditioning, yet you cannot cut back the university law school building hours.” Incentives do matter.

Do we need solutions, a member asked, or mechanisms that produce solutions? “We have got to understand the problem first,” Metzen said.

            8. More good people must begin talking about this problem--"I have proposed to the governor that we need really good people thinking about this. I think we’re at such a tipping point in higher education (in Minnesota and the US generally); the challenges are so great—the only way this state survives is by turning out intelligent, hard-working people. That’s why Minnesota has been a leader for so many years.

“We need a partnership with K-12, higher education, and the business community. There is a window of opportunity with the governor going out, and the heads of the two systems (MNSCU and U of M) coming in. I’ve talked to the candidates for governor about that.

“Information is important,” Metzen said “because there is a myth that you get what you pay for.  We need better data so that people can make informed decisions.” People in the agency told Metzen coming in: “We’ve been told not to think, just to hand out the money.”  Metzen asserted,  “That’s changed with us.  First we’re going to develop a thoughtful research agenda.”

            9. The new leaders of MNSCU and the U of M will confront the need for major change-- “Change is coming, whether they like it or not, because of the lack of money.  Private schools are going to change because they need to change just to be competitive. These two new leaders are going to need to trust one another.”

A participant asked Metzen: Do you sense an obligation to leave at the end of the year some kind of analysis and recommendation to the incoming governor, about the challenges facing higher education in the state and recommendations for action? Answer:  “To lack power is not to lack influence.”

            10. It is not sufficient to wait until change is forced—we could still slide a long way--A participant with experience in different areas of higher education had some thoughts on the dilemma facing all of higher education, except perhaps the for-profits. “I think we’re facing two major earth-shaking events in higher education. One is the funding; the other one is the need for model change—and fundamentally different arrangements for delivery.

“I’m concerned that the public, the policy makers, and the higher education systems will in fact tolerate a significant decrease in the quality of the system in order to maintain the current form of the system. This reluctance will cause us to tolerate an eating-away of the system year after year after year.

“We’re so wedded to the current model of post-high-school learning. Those inside higher education cannot look at the world and see themselves being shaped by the world—they think entirely within their own model. This enterprise defines quality as the inverse of productivity. We define productivity as small classes. And so every discussion about productivity immediately translates in the heads of faculty as more students sitting in front of them, while all these systems sell themselves on their small class sizes.

D. Closing

We need groups like this talking about the issues, Metzen reiterated. We need people saying what is best for students—not for institutions.

Susan Heegaard, Bush Foundation, June 18, 2010--Steer more funds directly to students in higher education – The report strongly urged the state to steer more funds directly to students instead of their institutions. Heegaard said this balance may be shifting more toward the students because of all the state cuts of funds going directly to colleges and universities. She said there has been movement on a recommendation that governing boards set standards for higher ed institutions, citing the move by the Minnesota State Colleges and Universities system to bind its chancellor to a performance contract for a portion of his salary. Heegaard called a recommendation that college and university presidents be given more authority “a tough one” because many legislators have a MNSCU institution in their backyard and can “for lack of a better term, micromanage.” The U, on the other hand, is more autonomous because of its land grant status.

Susan Heegaard, Bush Foundation, June 18, 2010--Responding to competition from online institutions--In the discussion, she noted that public higher education is “slowly responding” to new competition from for-profit online institutions such as Capella and Phoenix, which are  making significant inroads – particularly with graduate programs. She singled out Lake Superior College in Duluth as an example of a small, public community college that has responded. It offers at least a third of its courses online now. A member said that even within the traditional system, glitches on transferability of courses are costing students more money.

Susan Heegaard, Bush Foundation, June 18, 2010--Prospects for greater U of M-MNSCU cooperation--A member asked about the prospects for MNSCU and the U to talk more with one another about proposals for redesign of public higher education in Minnesota. Heegaard replied that part of the problem is that the two institutions “are quite different animals” in their structure. MNSCU is heavily unionized, very local and effectively a state agency. The U is largely independent. “There’s not anybody kind of really looking out for the whole thing. The office I headed up tried to do some of that by having an accountability report and publishing outcomes information in a number of areas, so we got  to get information out there. But in terms of some kind of board that oversees the whole  -- we don’t have that in our state.” but  one member voiced skepticism that any single board could oversee both institutions given that the governance structures of the two institutions are so different.  Heegaard called “challenging” the fact that no part of the Legislature oversees both the K-12 and higher Education systems.

Susan Heegaard, Bush Foundation, June 18, 2010--Difficulty in closing higher ed institutions--Heegaard noted that “it’s really hard to close a higher-ed institution” in Minnesota.  “MNSCU serves a very important purpose in our state – the tech colleges, the community colleges, the four-year schools -- that’s where the bulk of our students are educated right now. But at many of the four-year schools, there’s pressure to feel competition with the University of Minnesota. Part of that’s good, but you don’t want duplication. You want complementary work going on, not necessarily competitive.” Noting that “there are a lot of empty rooms” on MNSCU’s campuses, Heegaard questioned whether having so many sites is sustainable. She asked if there are different ways to use the space. “Senior housing,” a member replied.

As for the U, a member noted that only three of the 15 search committee members seeking a successor to U president Robert Bruininks are not members of the University’s faculty. Thus it’s hard to imagine the committee choosing a successor who will push for major changes. Heegaard said the main way the Legislature can have an impact on the University is through the budget process.

Charles Kyte, Minnesota Association of School Administrators, June 11, 2010--Cooperation with a technical college in southwestern Minnesota on timing of classes--Some 27 school districts in southwestern Minnesota have gotten permission from the State Commissioner of Education to start fall classes this year on August 24, which is before Labor Day and is opposed by the resort industry and State Fair officials. But these school districts want to align their schedules with that of a technical college in the area which starts school on August 24.

            Some resort owners, however, are showing less opposition to pre-Labor Day school. He quoted a conversation he had with a veteran resort-owner in the Brainerd area who noted that resorts have had to change their own schedules to accommodate changing desires of vacationers. It used to be that the resorts insisted on a seven-day reservation, but now they'll happily take three-day reservations for weekends.

            There are 800,000 students in Minnesota, of which perhaps 1,000 of them are actively participating in their own state fair exhibits. That small group ought not be determining the calendar for the entire state, he said.

            Later in the meeting Kyte said that technical colleges--many of which are largely empty during the day, while serving most of their student body at night--have incentives to work more closely with school districts, which are day-oriented.

Charles Kyte, Minnesota Association of School Administrators, June 11, 2010 Closer relationship with post-secondary?--In light of his comment earlier about school districts in part of the state aligning their time for opening school with that of a technical college,  Kyte was asked whether he sees closer relationships with technical colleges in the future. He replied again that the technical colleges are filled at night but are largely looking for students during the day. Technical colleges are different from community colleges, he said, with the latter having perhaps less of an interest in the local school system.

Clyde Allen, U of M, and David Olson, MnSCU,  April 23, 2010--The strategic position of higher education is one of uncertainty--Allen: Clearly today the term is the ‘New Normal.’ Even if we want to keep functioning with the same money, it will need to come more from different sources—from private and personal sources.

There was a time when an increase in tuition of $1 was supported by $2 in state funds. Whatever the cost had to be, the state would share two-thirds of it. The stimulus money buttressed this year, but there is a cliff. While I’m committed to the U being a public institution, more and more it is having to raise its money from private sources, like a private institution; higher price, deep discount.

Olson: His term on the MnSCU board of directors is up in two months, when he hopes to be involved in the search for the new chancellor. People ask why he got involved with the MnSCU system. He tells those who ask that it is beneficial to the business community—these are our future workers.

“Change needs to happen,” he said. This change is difficult with 53 campuses, 3 IDS towers of real estate and 5 unions.

“I honestly think we have to look at the whole structure and decide who does what best. I think the overall public higher education system needs to at least be taken a look at. Should someone have all the four years? Two-year schools separate? I don’t know.”

Do you have any idea who should do that, a member asked—who should work on those questions? “If we don’t, the legislature probably will; and that’s not where the discussion should take place.”

 Clyde Allen, U of M, and David Olson, MnSCU,  April 23, 2010--G1The next leaders will confront a need for change--Both men said their boards will try to name the new leader before the start of the next legislative session, in January 2011.

“I think the presidential search we’re about to undertake is the most important in years,” Allen said. “We need a change agent. You have to change the beliefs first and then the behavior follows.”

The regents will announce the search process at their May meeting. A search advisory committee, chaired by a member of the Board of Regents, will handle the original screening  process. It will include regents and non-regents. The regents will be the search committee.

“I feel very strongly the head of the system needs to be an academic,” Allen emphasized. “We are entering a long period where higher education will need to change. The leader is going to need to have the trust of the faculty. But it's not enough to just be an academic; you’ve also got to be an administrator and a politician. It won’t be enough to have simply an academic—some groups will want you to be a scientist; some will want someone from the humanities, etc. I don’t think the particular discipline is all that important. A recognition of the role all the disciplines play in our overall mission is what counts.”

The president will need to make quick friendships. Bob Bruininks had friendships coming in. We might not have that this time, so will need someone who can develop the trust very quickly.

Olson agreed: I think it will need to be an academic because that is what people feel comfortable with. But it can’t be someone with a traditional perspective.

“The changes we’re going to go through are going to require particular skills that match the institution. At MnSCU we’re going to need skills that can manage change. Higher education is going to change whether we like it or not. It will look different than it does today.”

Both men commented that they would like the chancellor and president not to have to spend as much time at the legislature.

David Clinefelter, Walden University, April 16, 2010--Steep growth in recent years in online and for-profit universities--Kaplan Inc., which had been best known for its testing services, moved into higher education by purchasing another company called Quest Education Corporation. Quest owned a couple of schools in Iowa, including Hamilton College and the American Institute of Business, Clinefelter said. He joined Kaplan in 2002 to help turn the American Institute of Business into their online school, using the existing structure and accreditation as a platform. From this base Kaplan expanded to 60,000 students in seven years, he said.

            Walden is based here in Minneapolis and has no campus’ it’s all online. Walden began in the early 70’s, with doctorate degrees. Its niche was to tailor the PhD degree to people that needed independent study and non-traditional schedules. Walden grew quickly as well after being purchased by Laureate Learning Systems—from 5,000 to over 40,000 now. Laureate is an international corporation that owns 40+ universities around the world.

            The University of Phoenix is best known nationally. It was founded by a university professor who wanted to serve adults. Phoenix is the largest educational institution in the world, with more than 450,000 students online or on campus. 

            Capella is also based in Minneapolis and is like Walden in that it focuses on doctorate and masters degrees. Most others focus on undergraduate and professional certifications. The big programs are business, criminal justice, paralegal studies, nursing and information technology.

DeVry, Strayer, ITT and Corinthians are others. “There are about a dozen of these universities that are online, for-profit. Some have campuses and some are all online,” he said.

Nine percent of the undergraduate students in the country are attending for-profit universities. They are growing rapidly. “When I came into this industry (for-profit) it was 3 percent. In just under ten years the share of students in the country has tripled.”

A study published two years ago in 2008 by the National Center for Educational Statistics found that in the 2006-07 academic year, two-thirds of 2-year and 4-year institutions reported offering online, hybrid/blended learning, or other distance education courses. Sixty-one percent of 2-year and 4-year institutions reported offering online courses, 35 percent reported blended courses and 26 percent reported other types of college-level credit-granting distance education courses.

The most common factors cited as reasons to pursue distance education are the demand for flexible schedules, access to college for students who would otherwise not have access and more available courses.

Find the report at: http://tinyurl.com/ccbo7m.

David Clinefelter, Walden University, April 16, 2010--Role of non-profit colleges and universities in online learning--Graceland was an early leader and a traditional non-profit, he said. Today almost every public university has some form of online courses. MNSCU has programs that students can go to and take classes online and get a degree without ever entering the classroom.

The liberal arts colleges have been the slowest to get into online learning. Online doesn’t make as much sense for their business model, which is about the campus experience.

“Since I’ve come into this business there has been more and more acceptance of the idea of online learning,” he said. The environment was hostile at first. The number of students attending online classes is going up dramatically, both for-profit and non-profit. There seems to be no end in sight for this trajectory.

“There may be a student in a dorm room, on the U of M campus, taking a class online instead of going across campus. Universities have had to restrict this,” it is so popular, he said.

A member observed that “non-profit” institutions still must make money and meet costs. The thought processes are not much different between non-profits and for-profits.

 David Clinefelter, Walden University, April 16, 2010--These schools are legitimate, accredited and on equal standing--A member asked Clinefelter how traditional institutions view the course credits from online, for-profit schools.

“There used to be a very strong bias against online and for-profit. But now with so many schools offering online programs it has faded.”

The key thing for transfer of credit is not so much online or ground-based, but the accreditation. There are two forms of accreditation—regional and national. Regional is the most stringent. If you’re the student of a regionally accredited institution, your credits will travel from one to another. But even though credits may transfer they do not always count because they may not work toward a particular degree program.

This is becoming an issue, as it is common for students to piece together their education from a variety of sources. “More and more students in the country are graduating with more credits than they need.” It’s an issue because these credits are paid for, by them and by the taxpayer through federal financial aid.

New models of learning are made possible, by technology. Some online courses do require in-person interaction, so schools may run a ‘residency’ program. Walden requires 20-day residencies for their PhD’s. They rent +-hotel conference rooms for 4-6 days at a time and hold meetings.

In blended learning environments, students may come to class one day a week and online two; or classroom two and online one.

 David Clinefelter, Walden University, April 16, 2010--Facing critics and skeptics of online education--“I’ve had battles throughout my career,” Clinefelter said, “with critics that say it’s not ‘real’ education. Or that the relationships are lacking.”

Online learning has a few advantages to the student, he argued:

·   You have to be engaged. You can’t fall asleep in the back of the room.

·    You have to be active, participating in the discussion and communicating with classmates or faculty.

·      It is conducive to different learning styles: the time, format and location.

·     You can learn at your own time, on your own time.

·     A lot of your biases go away when you’re online—you deal with people based on their ideas, not their race, gender, or social or economic status. That’s a powerful idea.

The US Department of Education commissioned a lit review of studies on online learning, published in 2009 (http://tinyurl.com/yc9yd7u). It found that in terms of student engagement, “blended” classroom/online learning turned out to be the most effective, followed second by online learning and, third, the traditional classroom.

Online discussions can be measured and thought-through, or live and spontaneous. There are benefits to being measured, but it is slower too. Online schools can do live discussions and blended programs can have spontaneity in the classroom component.

“At Kaplan we had a 1 hour program each week, where students would enter a live chat room with the professor.”

 David Clinefelter, Walden University, April 16, 2010--Question of student failures--A member asked, what percentage of students at online schools fail? “This is a huge question,” Clinefelter responded, “that for-profit schools talk about daily.” The main metric they use is completion. Most for-profits do not talk about their graduation rates because there are many qualifiers.

Part of the challenge is that graduation rates have a lot to do with the type of student that enrolls and how schools filter during admissions. For-profits in general have higher-risk students: working parents, people that have not been in learning for a while.

At Kaplan they were comparable to an open enrollment, public university. That would be the 30-40 percent range.

Quality control is a common concern. “When I came to for-profit I was worried and skeptical. Would they abuse students? I found that it is precisely the opposite. The for-profit motive drives you to provide good customer service. You can take shortcuts on courses and quality, but you’ll be put out of business.”

 David Clinefelter, Walden University, April 16, 2010--Recommendations to government--For-profits are here, a member said to Clinefelter, and they are working. What should the government do? What would be your guidance to the legislature on what ought to be done to work with for-profit schools?

“It’d be fun to give a practical and impractical response…

“Practically, provide better access with an online government university.” Lay down something like the University of Maryland, University College. That school was set up by the state not as a subsidiary of an established university, but as its own entity.

“I’ve been involved with these public schools that are designed to serve adults—dealing with entire demographics that are not served well by most schools.” They fit a particular mission and they provide access and educate people that the states need; and the states do need them badly.

Clinefelter advocates that the state create something like this. “Create it new and let it run. The United States needs more people with college education. We’re slipping dramatically in the world rankings of people with a college education. We have 28 percent in the country with a four-year degree. To be competitive on the world education stage we need 45-50 percent.

“The one thing the for-profits fear is a public online competitor. The publics have a brand. If the U of M created a good online program they’d be very tough to compete against.”

In Maryland, what is the atmosphere between the online and the traditional learning systems? “They don’t feel like they’re competing, because they’re working with two different demographics.” They each have their own management.

MnSCU now delivers a very significant portion of its classes online—something approaching 25 percent. “Maybe they are the place where this component of public education will reside.”

 David Clinefelter, Walden University, April 16, 2010--Online schools can be more productive--You must cover costs, a member observed. Tell us about the differences in financing between online and bricks-and-mortar.

Infrastructure is much less expensive at online schools. Faculty work from home. The for-profit folks have been very good at holding costs down because they hire many part time faculty. “But they must have the full time support staff,” he said.

Online schools separate course preparation from the teaching of the courses. One group of professionals develops a course and its content. The teachers, then, all work from that developed material. All students take that same course and sometimes move at their own pace. “It is much more efficient,” Clinefelter said, than each professor creating his/her own course.

A typical full time faculty member at Kaplan teaches 14 courses in a year. At a liberal arts college it maxes out at 8. And online they have up to 30 students in a course. Yet through the course structure the students communicate more with each other and with the professor than is often the case in the traditional setting.

There is a movement around the United States and around the world to create free material—called open source. There is a video on You Tube that shows a person explaining algebra in a way that is clear and makes sense. It has been viewed millions of times. Materials like this are beginning to replace expensive textbooks and free individual faculty members from designing their own learning materials.

Blended learning opens the proposition of productivity. “This question comes up in the defense industry” a member observed. “How are we going to train our engineers? The answer to which many are arriving is cooperative relationships with business.”

Lab courses may be taught virtually and are very impressive. There are programs that do chemistry experiments online that are too dangerous or too expensive to do in person; like landings in a flight simulator. You’re absolutely right there are some things that can’t be done online, but the technology is getting better and better. Who knows what will be possible?

“This costs much less to the state. The cost is shouldered by the consumer, not the taxpayer.”

 David Clinefelter, Walden University, April 16, 2010--Change is inevitable--“We’re just seeing the start of a revolution,” Clinefelter said in closing. The technology is moving in such a way that it is going to dramatically remake learning whether the legislature “lets” it or not.

This is called the long-tail phenomena. It’s happened to news media and books, retailers and will happen to education. More and more quality educational material is going to be available for free. Wikipedia is creating a Wiki-University, where people can go and learn things from experts, for free. There is a company called Live Mocha that provides free foreign language instruction in part by linking two speakers in different parts of the world.

In this new context, the role of the university changes from providing to also validating the credit. “This is going back to when you just needed to be learned in the law, and pass the bar, to be a lawyer.”

Elizabeth Kautz, president, U.S. Conf. of Mayors, April 2, 2010--Make post-secondary education more responsive to the economy--A member commented on Kautz’s interest and ability in working beyond her own boundaries to get stakeholders involved. The member asked about education: in Austin, TX, there is a partnership that seeks certificate programs to match workers with new projects that come along. Does this sound right?

“Absolutely. (UM President) Bruininks is part of our group because we are losing parts of our intellectual capital. I came to understand this by talking with our CEO’s. They do not have the work force they need. So I’ve been working to bring higher education to Burnsville. Not building more bricks and mortar, but using existing assets We’ve got St. Thomas, St. Mary’s , Concordia, Dakota Technical College and Inver Hills Community College utilizing an existing public school building and  holding classes there.

“We are looking at a new way of delivering education and for the education system to be proactive in meeting the needs of business. These programs are housed at a senior high school/senior citizen complex. The complex is used for higher education from 4-8pm.”

Paul Mattessich, executive director, Wilder Research, April 9, 2010--Education--On education: “I don’t think we’ve done enough work looking at what needs to be done after high school—what is needed as far as advanced degrees. We don’t have enough data on what happens to young people after they leave high school. We don’t really know what proportion of kids go on to college after high school, how that differs by race and income. We need more data to know what will help students get through high school; into and through college. We should know from birth through young adulthood who drops off, why and when.”

Paul Mattessich, executive director, Wilder Research, April 9, 2010--Higher education--On higher education: We’ve got a cost-increase at a time when real incomes are dropping. Have you looked at all about the affordability of higher ed? “I was talking with an administration official at the U of M about the debt load students are having to take on. He pointed out that there are people who are making their own cost-benefit decision and deciding not to go to college. Not seeing that investing that money will have a payoff, they take time off.”

Dan Lindh, Presbyterian Homes & Services, March 5, 2010--Online and e-learning are going to become core components to higher education--

As the group gathered a member remarked that in addition to his role with Presbyterian Homes, Lindh chairs the board of trustees at Bethel University. He asked Mr. Lindh about conversations the Caucus has had recently about online education, and its role in colleges and universities.

“Within a time of 10 years or so,” Lindh said, with firmness, “if you’re not proficient with online learning it will no longer be a matter of foregoing a tactical advantage—but instead you will be behind, missing a core offering.”

The university world is still in the early stages of the uptake of what’s now being called e-learning—a term that accounts for IT-enabled learning that is not exclusively online. Soon its quick pace of adoption will become more apparent, “flipping upward.” This will be driven as much by changes in culture as by new technologies. “The flip will be when the young people start taking over.”

Robert Bruininks, president, U of M, Feb 26, 2010--The state’s higher education system is not sustainable--“I do not think we are on a sustainable path,” Bruininks said. Costs are rising and government support is decreasing. Demographic changes are altering the capabilities and needs of students coming to the University of Minnesota. These changes are weighting what he considers a disproportionate share of state funds toward the MnSCU system. Meanwhile, higher education is being squeezed out of the state budget in general.

 Robert Bruininks, president, U of M, Feb 26, 2010--Proposals for changes in structure need to come from the outside--Options for response? “The main pressure for change and reform needs to come from the outside on this one. We’re in a long-term structural ditch, but we are not getting out of it on our own—we need to look at the entire collection of state services. We need something like the Greenspan Social Security Commission,” which provided cover to politicians on a sensitive topic. “We’ll need broad public authority and awareness,” in order to change.

Robert Bruininks, president, U of M, Feb 26, 2010--Elements of the problem facing higher education--There is a “new normal” for public universities, Bruininks argued, with new trends. Times have changed for public universities. The concept of a new normal “is usually discussed in terms of economics. The new normal describes more than just money; there are trends that are difficult to confront, as well--and there are also some positives.

                        a.  Changing state support for higher education. “Higher education used to account for 9 percent of the state’s biannual budget; now it is around 4 percent and falling.” Meanwhile costs are rising. “Believe me,” Bruininks said, “the cost pressures in a global labor market are different than those in a local market” for top faculty and for top researchers.

                        b.  Support shifting from the institution to the individual--Not only is funding decreasing, but it is shifting from the institution to the individual. “The federal approach to funding is turning from an innovation-approach”—say, a partnership between universities and government for R&D—“to student need.” This is taking the form of increased allocation to Pell grants and subsidized loans.

The shift to the individual reflects rising concern over the accessibility of higher education. “Tuition is becoming a major factor,” a member observed. Bruininks responded: “Don’t just keep your eye on the sticker price; keep your eye on the net price. The sticker has gone up 100 percent over the last 10 years, but the net has risen 27 percent (roughly 3 percent annually)”—and some years the net price has actually gone down for many students. The University is working hard to provide tuition aid.

He recalled a visit with Father Dennis Dease of St. Thomas, where he asked how much tuition was at that school. “$26,000,” Dease said. Who’s paying it? “Nobody.” The point, President Bruininks said, is that “the economy is complex,” and there are entrepreneurial ways to deal with the problems it presents.

                        c.  Concern over low graduation rates--A member asked whether President Bruininks believes concerns about graduation rates are affecting the process of awarding individual aid, i.e., is there concern that aid does not result in a completed degree? Yes, the concern is more basically about getting people to graduation. “We are in the back of the Big 10 in our graduation rate,” he admitted, “partly because urban universities have more people coming in and out”—but the University of Minnesota Twin Cities has doubled its four-year graduation in recent years. The best thing a person can do to cut down on cost, he said, is to graduate in four years. 

                        d.  Changing, less favorable demographics--Now, it is well documented that the growth of college-aged students will slow, affecting the supply of high school graduates, he said.  Increasingly the demographics of the younger generations in Minnesota are trending toward racial, ethnic and socio-economic groups that have not done well--and are not doing well--in school. These groups have been least likely to go to college. The state is growing older, with more retirees contributing less in taxes. 

                        e.  Increased competition from for-profit online education--“The fastest growth in higher education is in proprietary, for-profit online education. The reach and advances of technology are changing the accountability” for the University and increasing demands for technology-rich curriculum. Even so, the University continues to see a rise in applicants and better qualified applicants, making admission much more competitive. While enrollment has grown in recent years, demand has grown much more quickly. “I get calls at all hours of the day, and night, from people I never used to, asking why their child or grandchild didn’t get in.”

 Robert Bruininks, president, U of M, Feb 26, 2010--Elements of the strategy to deal with the problems facing higher education--“How does the state move,” a member asked, “on the response side?” Through “macro design,” Bruininks replied. It is the state’s job to do the design of public systems—not to run them.

There are clearly two dimensions to this problem, a member observed. One exists within the higher ed. system, involving its design, function and outlook. The other is at the level of the state and involves how it legislates and funds public services.

The member continued, “You have been listing elements of the strategic problem. If you go over to the other side, what are the strategic actions to deal with them? How does the University of Minnesota internally move to address the things it needs to do, to respond?”

“We need to do a good job delivering on our mission,” Bruininks began. “Be entrepreneurial. Manage the economy internally. Revisit our organizational character and ask, what is our primary role and what are our responsibilities?” He outlined some ideas: 

                        a.  Improve college readiness, so students come to college without needing remedial courses. “I believe the top priority in K-12 needs to be college readiness” he said, citing his experience serving with a group called the Minnesota P-20 Education Partnership. They brought in experts to work on content for elementary and secondary schooling (they issued a 2007 report that may be found here: http://tinyurl.com/ybj5apm). “Students must come to college knowing how to do college work and able to succeed.” 

                        b.  Better align early childhood, K-12, and higher education—“We need to have greater cooperation between K-12 and higher education institutions,” Bruininks asserted. This will streamline the transition and find efficiencies (see next). The College Readiness Consortium with Kent Pekel works on the question of how to better bridge K-12 and the University. Further, as a society, “We have got to redesign K-12 schools to get higher results.”

                        c. Invest more in early childhood--He believes firmly that more money should be spent on early childhood, and that there needs to be more attention paid to it.  “If I had to choose a dollar over there (in early-childhood) or a dollar for higher ed, I’d choose early childhood.” But the way money would be spent is different than the institutional subsidy for colleges and universities. “It is not a system—it is a collection of independent people. It is consumer-driven.” 

                        d.  Design systems that are highly responsive and sensitive to cost. “Deal with internal design of schools and system design” of both MnSCU and the University of Minnesota. “We cannot keep taking out $200 million, year after year and sustain a model of so many institutions.” He didn’t know how to change this, but said that groups outside of the system need to provide the vision and pressure to scale down. 

                        e.  Get at the cost for families by enabling students to earn a degree more quickly--“We should get very real about alignment of K-12 and higher ed,” Bruininks said, including more use of Post Secondary Enrollment Options (PSEO), college in the schools, and Advance Placement courses. “The average student is already coming to the U with 15 credits,” he said. Even so, families are not now using this as a way to save money. “They’re not saving the tuition, instead they’re maxing out their credits and double majoring or taking on multiple minors.”

                        f.  End high school at grade 10?--“You said many years ago,” a member observed, “that students should be able to end high school at grade 10. Do you still feel that way?” “If we are going to cope with the new normal,” Bruininks replied, “we are going to need to create more interconnections between these systems.”  But simply shortening high school isn’t the answer, since students graduating from high school today are often underprepared Again, he emphasized the need for college readiness and the opportunity for students to take courses in those latter years of high school that would prepare them for the rigors of postsecondary education, earn them college credit, and apply to their liberal education requirements or directly to their degree.

                        g.  Pare down the number of institutions--“We need to revisit the charter we have for higher education in the state,” Bruininks said. “We have many cost centers with marginal results.” Over 300 school districts and public post-secondary institutions based on geography; not need. 

“In 1972 the legislature decided to place an institution within 35 miles of every homestead in the state. This is not sustainable.”

“The University of Minnesota is the research/land-grant institution of the state. We need to protect this to thrive as a state. This is indispensable in the global economy—its centrality and interdependence with the state. I’m concerned we won’t stay in this position” nationally/internationally the way resources are eroding now.

Bruininks points to the state’s capital projects to make his point. “Historically the university would receive 15 percent of funding in the state’s bill for capital projects. The investments are supposed to be for projects of ‘significant public importance.’ The House bill just drafted gives us 7.5 percent.” He mentioned projects that, while legitimate, seemed of less pressing importance compared to the University. “You put a dollar in the University, we’ll give you four. We leverage it.”

            5.  Minnesota’s edge will be brainpower and a culture of innovation--There are two driving forces in the global economy, Bruininks said, that the state and the university need to keep their eyes on: brainpower and a culture of innovation. “A culture of innovation is necessary breed homegrown successes. The best businesses in Minnesota are started here. Rarely do they locate here from somewhere else.

“We can’t cut our way to a more creative future. Reform and redesign of systems must be our top priority. That is a hard thing for public systems—it’s hard enough for the private sector, which must do it every day.”

The political environment is a challenge, he argued. “If we could turn back to the age of Elmer Andersen, when it was less polarized, with groups that came up with ideas,” it would aid the process.

 Robert Bruininks, president, U of M, Feb 26, 2010--Higher education is resistant to change--He acknowledged that higher education is one of those systems that does not want to change. He paraphrased James O’Toole: “‘Academia is the one place on Earth where change is resisted as a matter of great principle.’”

 Robert Bruininks, president, U of M, Feb 26, 2010--Federal earmarking makes for unwise spending--“Look at the capital expenditure bill that was passed recently only to be pulled back—there was one project (for higher ed. institutions) in every congressional district. That is not a strategic way to go about funding higher ed. Each one of these projects has a 25-year debt tail. The demographics driving these projects today will be decreasing during these years.”

 Robert Bruininks, president, U of M, Feb 26, 2010--Public systems should assess themselves against what they value with great discipline-- The University pegs itself to the top schools in the country and pursues goals. “We benchmark with discipline to top public research universities,” Bruininks said, “and private universities, too. Great institutions measure what they value.”

State Sen. Larry Pogemiller, Feb. 19, 2010--The ground is shifting below the entire industry of higher education--A member asked Pogemiller if he sees any major changes coming for higher education.

“Yes,” he said. “Not by policy, but by the market.” The question is being called now whether “the classroom model is as efficient as it could be.” Online schools will be serious competition. “Capella is here,” he said, matter-of-factly.

Things are going to change. “We’ve already gone to a high-tuition model, and we will see if people keep going.” The Senator said that he is less concerned with what type of education is provided—public/private, online/physical, private/non-profit—than he is about the ability for people to go to school. Echoing his comments on E-12, he argued we should let things play out. “As long as we are able to assure access, it will settle itself.”

Curt Johnson, managing partner, Education|Evolving, Jan. 8, 2010--Rapid disruption in higher education--The pace of disruption has happened faster in higher education, and its effects may be seen clearly. Most colleges now offer some online components. Capella University, based downtown Minneapolis in the Capella Tower, enrolls 31,000, with expectations for growth to 50,000 enrollment (http://www.capellaeducation.com/news/assets/Media_Fact_Sheet.pdf). “And they don’t have a football team,” came a comment.

“The online growth in higher education is stunning,” Johnson said. “Change will happen quicker in the public university system than private.  We heard one high-ranking officer at the University of Minnesota say recently:  ‘I don’t know what the University will look like in 2-3 years, but it won’t look like it does now.’ Things are changing, and the faculty isn’t even aware. Their attitude is that these are problems for management.”

“It is possible that only the elite colleges that are selling atmosphere or prestige and those that offer a really unique campus experience will survive even the next decade,” Johnson said.

Tim Penny, former member of Congress, July 17, 2009--Tie two-year post-high school institutions to economic development?--Penny is deeply concerned that the state is over-emphasizing the importance of college degrees as against more technical, job-related education.   He said the state's two year colleges seem to be over emphasizing the preparation for an eventual four-year liberal arts degree.  Instead, he said, the two-year institutions should be more closely tied to an economic development strategy for all Minnesotans, which means more job-related training in the two-year institutions including short courses and certificates (as opposed to degrees) and more on-site training partnerships with businesses.

State Rep. Mindy Greiling, April 24, 2009--Possible changes in schools of education--It was noted that some previous Civic Caucus interviews have included questions about whether schools of education are adequately preparing teachers for emerging roles.  Greiling said she'd be happy to have such issues part of the discussion.

Curt Johnson, Education|Evolving, April 10, 2009--Contribution by schools of education--Schools of education generally are not in a leadership role when it comes to training future teachers who might have an opportunity to run their own schools, Johnson said.  Why don’t they change?  In the first place, schools of education are largely the "cash cows" for universities.   The universities need large numbers of enrollees in their schools of education because the expense of providing education for future teachers is relatively less than the expense of education in many other fields.

A few schools of education, however, are exploring a sort of second track, which teachers interested in running their own schools could follow.   Hamline University and Minnesota State University Mankato are in the forefront of change among Minnesota schools of education, he said.

Fred Zimmerman, University of St. Thomas, March 20, 2009--Lack of practical experience on business school faculties--A Civic Caucus member asked Zimmerman about colleges and university business schools serving as incubators for new technology.   Such institutions are handicapped, he replied, because their faculties have too few professors with personal practical experience in manufacturing firms.   It was the private experience of its faculty that built the engineering school at St. Thomas, he said.  

            On a related matter Zimmerman is critical of how college faculty members spend their time.  He distributed an option piece he wrote for the Star Tribune, June 16, 2002, in which he commented as follows:  "Professors at teaching institutions usually teach classes for about 330 hours per year; at research institutions, about 165.  An ordinary work year in industry is around 1,925 hours...In reality, many of us neither teach nor do research - very much.  Instead, we meet.  We have search committees and curriculum meetings and policy meetings and innumerable other meetings but very few decisions."

Joe Nathan, HHH Institute, University of Minnesota, Dec. 12, 2008--Re-thinking the need for college--Every high school graduate doesn't need to go to a four-year college, according to research that Nathan cited.  He said the Anoka-Hennepin School District is working with Anoka Technical College on the STEP, a great example of helping high school students take applied courses in areas like engineering or nursing that will lead to good jobs without four year college degree.

Joe Graba, senior policy fellow, Education Evolving, July 25, 2008--Higher education might even be more vulnerable--Moving from standardization to customization might be having even more impact on traditional colleges and universities, Graba said.  Expenses are rising very fast.   It's increasingly difficult for students holding down regular jobs to devote a specific amount of time every day to go to a specific location for higher education classes, he said.   Self-directed computer-based classes provide a very attractive option for such individuals because they can go to "class" at whatever time and location is most convenient for them.  He cited the popularity of such computer-based learning institutions as Capella University, Walden, and University of Phoenix.  Many traditional colleges and universities have no idea of how to cope with the new reality.