February 8, 2012 — The Obama administration has set an ambitious goal for American higher education to recapture the top place worldwide in share of population with postsecondary degrees and credentials by 2020. More than 30 states, including Virginia, have set statewide goals that are consistent with this aspiration.

At the same time, the state share of higher education support has been dropping for many years, throwing the feasibility of these goals into doubt.

A new book, "Financing American Higher Education in the Era of Globalization," by University of Virginia professor David W. Breneman and three co-authors, addresses these issues head-on, and presents possible solutions.

Apart from finance, demographic changes occurring in the youth population poses an additional challenge, as the next generation of potential college students is increasingly diverse, with more minorities, low-income and first-generation college-goers. Increasing participation and completion rates for these groups will stretch the performance capacity of the system, according to Breneman, Newton and Rita Meyers Professor in Economics of Education at U.Va.'s Curry School of Education, and the three co-authors, William Zumeta, professor in the Daniel J. Evans School of Public Affairs and the College of Education at the University of Washington; Patrick M. Callan, president of the Higher Education Policy Institute; and Joni E. Finney, professor in the Graduate School of Education at the University of Pennsylvania.

In their book, published this month by Harvard Education Press, they examine claims that the U.S. needs to produce many more citizens with postsecondary credentials, and while not endorsing any set number, they conclude that the changing nature of the economy will require more graduates with credentials beyond high school. The book does not present a federal government solution, beyond incentive grants to the states and a reformed student loan system, Breneman noted.

States will be the key players in any solution likely to meet this challenge, and the book presents an array of state policy options, customized to the type of higher education institutions found in each state, Breneman said. Greater productivity will be an essential part of any serious solution, in addition to efficient allocation of new resources, he and his co-authors contend.

One chapter examines the potential institutional capacity of colleges and universities to meet increased degree production, on the assumption that the nation will not embark on the creation of many new educational institutions. Breneman and the other authors conclude that the "workhorse" institutions in this effort will have to be the community colleges, regional public universities and for-profit institutions, not the research universities and selective private colleges, which have little interest in expanding undergraduate enrollments.

As a result, public policy efforts must focus on these non-selective institutions, which have not typically been the object of much attention, Breneman said. The book also examines and evaluates the prospects for meeting the goal with increased distance learning and online instruction.

Breneman used drafts of the manuscript in Curry School courses on higher education finance, and the verdict is that the book is valuable both for students of this topic, as well as for state, federal and institutional policymakers. Its comprehensive approach to the topic is not readily available elsewhere in a single volume, he said.