F RO M L AG G I N G TO L E A D I N G

Making Minnesota postsecondar y education a national model

October 2012

ABOUT THIS REPORT

This report is an outgrowth of a small group of policy leaders and education stakeholders convened by the Center for Policy Studies in the winter of 2011. After several conversations, the group urged The Center to dig deeper into the challenges now threatening Minnesotas historic dependence on a highly educated population. Participants in the 2011 conversations echoed a broader sense among many Minnesotans that the state is slipping in its capacity to prepare an increasingly diverse population for both the challenges and opportunities of the 21st century. With that sobering charge, The Center convened a working group that met a dozen times over the last year, ultimately producing this report. Early on, the working group realized it couldnt possibly do justice to all the challenges facing the states postsecondary institutions and the students and families they serve. Instead, its report focuses on the need to: Define and measure what students need to know and be able to do; Demonstrate the competencies students actually acquire; and Ensure the knowledge and skills students acquire match the constantly changing demands they are already facing as 21st century workers, engaged citizens, and lifelong learners. Thank you to Jon Schroeder, who assisted in developing this report. Schroeder has an extensive background in public policy and journalism, including 10 years as a senior staff assistant to former U.S. Senator Dave Durenberger and work over the last 25 years on education policy and redesign nationally, in other states, and in Minnesota. Other active members of the working group included a number of individuals with past and current leadership roles in postsecondary education: John Adams, Lindsey Alexander, David Clinefelter, Angie Eilers, Laura Gilbert, Joe Graba, Jim Horan, Lars Johnson, David Laird, Larry Litecky, Dan Loritz, Tim McDonald, David Metzen, Mark Misukanis, Michael OKeefe, and David Shupe. At about half its meetings, the working group was joined by other experts in the field, including: Bill Blazar, senior VP of the Minnesota Chamber of Commerce; Larry Pogemiller, director of the Minnesota Office of Higher Education; Peter Ewell, VP of the National Center for Higher Education Management Systems; Patrick Hunt, a Twin Cities-based technology and international marketing entrepreneur; and Terry Rhodes and Dan Sullivan, who are leading several accountability initiatives being undertaken by the Association of American Colleges and Universities (AAC&U). The group was fortunate to have the participation of David Shupe, founder of Minneapolis-based eLumen, who has national leadership experience in introducing student learning outcomes as the principal metric for the next generation of higher education performance. Separate meetings were held with Steven Rosenstone, chancellor of Minnesota State Colleges and Universities; Minnesota Education Commissioner Brenda Casselius; and Jim Bensen, former president of Dunwoody College of Technology and Bemidji State University. Regular communication was also maintained with the Itasca Project, the Citizens League, and the Minnesota Chamber of Commerce about their work to address the challenges facing the states consumers and providers of postsecondary education. All three organizations shared various work products, including a short paper on the origins and growth of Minnesota postsecondary institutions, produced for the League by working group member John Adams (see pages 10-12). This report is available online in PDF form at www.centerforpolicy.org/postsecondary. By Curt Johnson, senior fellow at the Center for Policy Studies and principal report author and convener. Johnson is a former chair of the Metropolitan Council, chief of staff to Governor Arne Carlson, and executive director of the Citizens League. He began his career in Minnesota as president of three of the states community colleges.

F RO M L AG G I N G TO L E A D I N G
Making Minnesota postsecondar y education a national model

y now the problems are all too familiar. In Minnesota, as elsewhere in the United States, most jobs that pay well require more education than high school. Graduation rates, even for high school, are stuck at levels too low. Completion rates for college certificates or degrees are not keeping up with occupational demand; and the skills and knowledge employers say they value are missing in too many graduates preparation. Too much of higher education is supply-side driven; whats offered is what educators want to provide. Costs of providing postsecondary education have risen relentlessly. A de facto policy of higher tuition, evolved over the past decade, lacks a proportionate response in financial aid. Most troubling is the sense that students value only the credential, the presumed ticket to the marketplace, not the education itself. Employers, though, often use those credentials as filters in hiring, even though credentials reveal nearly nothing about what the applicants actually know and can do.

solve problems, and work in teams. Even for manufacturing or technical jobs, serious training is already a must. Incremental system improvement, while needed, is a losing bet in a high-stakes game. What Minnesota needs for its system of postsecondary institutions is a real game-changer, a bold move. So what is the change that would make such a powerful difference and clear the clouds in this storm of problems? In this report, we make the case that shifting to a system of documented proficiency is exactly that kind of catalyst. A proficiency platform delineating and documenting what learners know and are able to do will restore faculty focus on education results, induce students to concentrate on what they are learning, and make the long-elusive connection between what happens in college and what is needed in the workplace. This model has the capacity to mitigate, if not eliminate, the game of collecting credits and capturing credentials for mostly utilitarian purposes.

Minnesotas modern comparative advantage has long been directly tied to its investments in education, aimed Minnesota has a rich array of colleges and universities at assuring that people in its regional economies are better public, private, nonprofit and for- profit. No one can prepared than the employees in most markets. Looking effectively order them to undertake bold change. Nor is ahead, the only growth in Minnesotas workforce appears there enough money to induce change with higher to be coming from population groups whose history with support levels. education is bleak at best. Even with higher-than-average unemployment, there is serious talk about future labor But policy makers, along with system and institutional shortages (see Figure 1 below). The middle class, as it leaders, can and should create the conditions under which has been defined, is shrinking. Those with sophisticated faculties and institutions can make this shift toward a education and a creative bent have soaring work and life system driven by documented proficiency. prospects. People who might formerly have gone to work in the manufacturing Unsustainable plant across town are Figure 1 Labor Force Growth Is About to Slow Sharply Conditions looking at making 1.52% 1.6% do with less and less. Minnesotans may 1.4% These are not think they have seen 1.12% 1.2% sustainable conditions. this movie before. 1.0% Sometime in nearly 0.75% 0.8% If future Minnesotans every recent decade, are to be prosperous, 0.6% 0.43% political, business and they will need 0.4% 0.27% civic leaders arouse higher-order 0.10% 0.13% 0.2% themselves to study intellectual and 0.0% 1900-2000 2005-10 2010-15 2015-20 2020-25 2025-30 2030-35 the problem and analytic skills; theyll suggest how to go Data courtesy of state economist Tom Stinson and recently retired state need to be able to forward. Up to now, demographer Tom Gillaspy. communicate clearly,
Average Annual Change

however, these blue-ribbon efforts have precipitated little change; usually they lament a lack of adequate resources but then reaffirm most of the elements of the systems that raise costs. Costs rise partly from more and more demands, but also from an inability to stop doing things and an unwillingness to think about redesigning the system to fit new realities. But this time entering the fall of 2012 may really be different. The sense is settling in that a macro-shift has occurred in recent years. Pick any troubling title you wish That Used to Be Us, The Great Reset, Time to Start Thinking its all about redefining assumptions and expectations. The goalposts have indeed moved. The long string of post-World War II decades that saw America enjoy seemingly effortless superiority have come to an end. The nations standing in preparing emerging generations of citizens and workers is troubling. Americans used to be first in the world in the proportion of adults with a college education. Now were down to 12th. As technology transforms the economy at speeds never known before, the proportion of young people even showing interest in the core disciplines required for good jobs has dropped. Achievement by U.S. students now ranks 31st and 15th internationally in the key foundation disciplines of math and science.

workers and the kinds of job preparation the states institutions offer. Theres a palpable sense that the state needs a strategy to get this done. It has new leadership in each of its major systems; their public statements suggest they understand the challenge. This is, of course, not just a Minnesota challenge. Nearly everywhere in the U.S., the system of postsecondary education is under attack. From the right of political center, the American Enterprise Institute points out how weekly studying by college students has dropped from 24 to 14 hours per week, and that the proportion of students graduating within four years has dropped to 40 percent. The even more rightist Goldwater Institute pins the resource problem on administrative bloat, citing how much administrative spending outpaced academic investment between 1993 and 2007. To press the point, the institute says that half the full-time employees at Arizona State University are administrators, a trend explained by Benjamin Ginzberg in The Fall of the Faculty and the Rise of the All-Administrative University and Why it Matters. From the left comes a spate of books such as Higher Education? How Colleges are Wasting Our Money and Failing Our Kids and What We Can Do About It by Andrew Hacker and Claudia Dreifus. Indeed, time was when the socialeconomic value proposition was a good guide you stayed in school, went to college, finished, and took a good job, reasonably secure in the expectation of continuous employment and excellent social standing. Todays trillion dollar-and-growing student debt (by 2010 an average of $26,682 per student, according to federal data) suggests students and their families still believe the proposition. Still, beyond the obvious burden this debt poses, whats the effect on college graduates propensity to take the creative route as opposed to sticking with whatever job will pay the bills? Is student debt stifling innovation? Student debt at least provokes some soul-searching. Some students may wonder if they fell for the Chivas Regal effect believing that a prestigious institution assures career success and is worth it regardless of cost. In the news and around kitchen tables, the conversation about affordability and value is heating up. Policy makers seem unaware of the dangers to both the economy and the American democratic experiment; or, if they are aware, they show few signs of urgency. Consider how few policy makers even those who are insiders have much insight into how schools and systems actually work. They have scant understanding about what the money is used for or what the systems produce for the money paid. And is the situation much better inside the

Americans used to be first in the world in the proportion of adults with a college education. Now were down to 12th.

The price of college has gone up over the past 30 years faster even than health care costs, with public institution costs rising even faster than at private institutions. Few insiders want to discuss means of achieving more productivity. Meanwhile, though college graduates continue to earn twice what a high school dropout earns and have only half the average exposure to unemployment, theres a not-so-vague sense that the content and value of degrees have slipped. Over time Minnesota has a considerably better-than-average record of sizing up threats and seeing opportunities, though not necessarily in higher education. But there are stirrings. The Citizens League, taking the perspective of consumers, has a multi-year inquiry underway, looking for ways to precipitate needed change. The Itasca Project, a coalition of CEOs in the Minneapolis-Saint Paul region, recently issued a preliminary report calling for more emphasis on research and innovation and more completions of degrees, but also for better alignment between what employers need in

academy? Wheres the evidence that those in charge have any leadership and management training themselves? In America, with no central ministry to articulate whats expected and to make sure it happens, we have to manage with a potpourri of purposes and institutional capacities. And what about parents, who surely still have those traditional high hopes for the success of their children? It sometimes seems like parents are also among the unplugged, clueless as to the educational and economic challenges facing the emerging generation. Nonetheless, the pressure rests squarely on Americas colleges and universities. In its annual rankings of colleges and universities, U.S. News and World Report writers said, If colleges were businesses, they would be ripe for hostile takeovers, complete with serious cost-cutting and painful reorganizations. But colleges and universities tend to endure. Charles Dow in 1912 created an index of the leading corporations of that time. Nearly none of those exist today. But all the universities that comprised the founding of the Association of American Colleges and Universities are still operating. Robert Archibald and David Feldman argue in Why Does College Cost So Much? that price increases generally track economic growth and are the same for any industry that relies chiefly on highly educated staff. Others charge that costs rise as subsidies grow; hence, the festering debate over the eligibility for and size of federal Pell grants to students. And even as colleges and universities produce more and more graduates, national studies (such as a 2011 report from Deloitte and the Manufacturing Institute) suggest as many as 600,000 jobs went unfilled in 2011 because prospective employees lacked adequate educational preparation. A more recent survey, conducted by the Wall Street Journal and Vistage International, found 41 percent of manufacturing firms, 30 percent of service businesses, and 29 percent of retail businesses citing frustration in finding qualified workers to fill openings. Wages could be a piece of this puzzle. For some jobs, another factor often cited in surveys is that many of the jobs going begging are jobs most people dont want. Surveys also confirm that most enterprises in the U.S. are too small to sponsor their own training. The notion, though, that the nation simply needs a big push toward technical training that fits the unfilled jobs ignores the central reality that young people need the kind

of education that fosters continuous learning and equips them to be adaptive in the face of rapid change and uncertainty. We wont restore our competitive edge merely by turning out a crop of welders to satisfy the needs of precision manufacturing. Adding to the spate of books and columns on the subject, College What it Was, Is, and Should Be by Andrew Delbanco hit the shelves in the late spring of 2008, reminding all who still care that college is about more than training for employment. It should nurture a reasoned skepticism about the status quo, arouse curiosity about the natural world, help young minds make connections among seemingly disparate phenomena. Most surely, part of the contemporary paralysis in policy-making is a fundamental absence of a working consensus as to what college is about and what its for.

The notion that the nation simply needs a big push toward technical training that fits the unfilled jobs ignores the central reality that young people need the kind of education that fosters continuous learning and equips them to be adaptive in the face of rapid change and uncertainty.

In the 20th century, a cultural assumption took root about the value of a college education. Taking college seriously and getting a degree translated into an assured economic and social advantage, because you were a better-educated person. Today, even as degrees have vaguely slipped in importance, students seem more intent on acquiring a degree purely for its utilitarian purposes. Survey after survey show this trend. If thats the purpose, then why take difficult courses? Why slow down by selecting the most challenging curricula or classes? Young people quickly figure out how to get degrees without the burden of subject mastery. This trend peels back most mysteries around why by 2008 41 percent of the workforce was classified as financial services workers and enrollment in STEM fields continued its ominous slide.

Minnesota Slip-sliding
Minnesota has a long tradition of anticipating the curve of change and innovation and staying ahead of it. The second half of the 20th century saw the state investing aggressively in education at all levels. We led the nation in getting to full participation by women in the workforce. We built great institutions, not just for formal learning, but also for arts, culture, and lifelong learning, outside of school. Were

near or at the top of the charts for many things still from the number of professional theater companies to Fortune 500 company headquarters. But theres a growing sense that we are not as aspirational as we once were, that we are reluctant to make patient long-term investments, and that were content to let some other place invent the future. Then well make a visit and see whats worth bringing home. People used to travel to Minnesota to see the leading edge. Some say we were never that aspirational, that we were just enjoying the relative advantages of homogeneity. From the mid-19th century up until the last 30 years, the state was dominated by a culture of implicit agreement. The demographic changes in the last quarter-century stand in marked contrast to the original settlement pattern. For a long time, decisions could be made without the strife and rancor of other places. Whichever is the most accurate historical analysis, those conditions are gone, replaced by greater diversity of people and perspectives.

But the baby boom generation is retiring (or trying to); the only population growth is coming from demographic groups with the bleakest record for schooling. And that is where the 70 percent estimate of threshold education becomes a red-light warning for the state. Two-thirds of Minnesota employers already report serious difficulty finding people with the skills and education needed. Larry Pogemiller of the Office of Higher Education reports that barely half of white students leave high school college-ready. But the figure for African Americans is 8 percent. Recently retired state demographer Tom Gillaspy made hundreds of speeches in recent years, forecasting looming labor shortages. Some analysts suggest this is a market problem that wages are not high enough. Or, seeing too many employees leave for other jobs, even large employers will no longer shoulder the risks of training. The Governors Council also cites comments of Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank, suggesting that upwards of 4 million adults could find jobs right away if they had the right education. If thats true, Minnesotas share of that gain would lower the unemployment rate by two points overnight if people felt geographically free to move to find jobs. We note that unemployment rates are low in Iowa and near zero in North Dakota. So is Minnesota working on this problem? Studying it, yes. But from 1999-2011, Minnesota racked up a truly dubious distinction leading the nation in disinvestment in higher education (a decline of 48 percent). Public institutions in Minnesota reduced costs per student by about $1,000 a year, which was nowhere near to matching the decline in state support. As public support dropped, tuition went up. Completion rates sagged. Now, almost suddenly, changes in tuition get lots of attention; customers are pushing back. And while its natural to sympathize with institutions absorbing declining levels of support, what Minnesotans should actually care about is the cost per degree completed. And whether that degree represents a high-quality general education and adequate preparation for employment. Whos keeping track of that? (Actually, the University of Minnesota has undertaken a serious cost allocation analysis in order to understand the differential costs of a wide range of degrees.) And lest we forget, Minnesota has a sterling collection of private nonprofit colleges and universities, which together produce more baccalaureate graduates than the University of Minnesota every year and more bachelor of science degrees than the public systems combined.
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The level of education people are getting dangerously lags the requirements for effective employment.

But getting down to specifics, lets take the misalignment between qualified workers and ready jobs cited above. Where does Minnesota stand? The Governors Workforce Development Council, citing a McKinsey Global Institute study, told the Civic Caucus group in April 2008 that this is the core problem. Nationally, 71 percent of current workers are in low-demand jobs for which there is an oversupply of labor; most do not have the skills and education for the emerging jobs that pay well. We acknowledge that lack of education is not the only employment challenge. The nation as a whole has drifted toward limiting entry to occupations with standards and licensure that may serve mostly as barriers to entry, allowing those already inside the tent to engage in what economists call rent-seeking at the expense of the public. Even college professors, if driven by expectations of market compensation and total job security, become rent-seekers. Nonetheless, the level of education people are getting dangerously lags behind the requirements for effective employment. The Governors Council says that 70 percent of Minnesota jobs by 2018 will require some postsecondary education. Today 40 percent of workers in the region have a baccalaureate or higher degree; and according to the Office of Higher Education about 67 percent have some postsecondary education. To be fair, both proportions are somewhat higher than the national average.

Meanwhile Minnesota manufacturers say 5,000 jobs are going begging for lack of qualified workers. Business majors abound, but technicians to undergird a resurgent manufacturing sector are scarce. The challenge seems clear enough. Minnesota cannot continue to be a place where prosperity is within the reach of most people and where an educated citizenry sustains sensible politics unless every willing person is motivated and able to get the kind of education they want and that the economy demands. More reports confirming this reality are welcome enough. Conferences that reconfirm the urgency of action are worthwhile. But whats needed is strategy, backed up by targeted spending. Despite the decade of disinvestment, the state should simply refuse to spend another dollar on postsecondary education that is not part of a strategy to get better results. What would that strategy look like?

organizations to be really different and see if those differences catch on. They play by entrepreneurial rules: fail fast and learn from every mistake; get better as you go.

There are many students who are energized by learning, but most indicators suggest that most students learn to game the system, endure the process, and get the degree.

Theory of Change
A quiet movement is already underway in the U.S., with individual institutions, some departments within institutions, accreditation agencies, and at least one national association aiming at redesigning the college experience. They seek to clearly outline expectations for what students know and can demonstrate and a system of record-keeping that is convenient and transparent for educators and learners. If this system is to grow more rapidly, to emerge from the shadows of quiet innovation and become a major system change, it must follow the path of change and innovation in other systems. This change disrupting fundamental practices cannot be ordered from the top. Educational leaders can open doors, facilitate planning, and provide resources and conditions under which the work proceeds, but little else. Nor is it reasonable to expect that change to a proficiency platform would happen en masse. Some might enthusiastically proclaim: Do all of this, do it everywhere, do it now. That sort of sweeping rhetoric makes for dramatic and controversial reports but is completely unrealistic. And that is not how systems designed to be innovative actually change. They change by being open to trying new and different things, by acknowledging constraints and opportunities popping up all around, and by committing to adaptive responses. They change by consciously creating space where willing people can demonstrate different approaches. They allow some
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As this report is emerging, the Minnesota State Colleges and Universities (MnSCU) system leadership declares its interest in moving toward a proficiency model, even suggesting that the entire system can make this shift. As a goal, this is laudable, but set against the record of organizations dealing with system change, it appears like a long shot. However, Minnesota postsecondary leaders, both public and private, are poised to be involved in both the new AAC&U assessment project as well as the State Higher Education Officials (SHEO)/Lumina Foundation project on assessment. MnSCU officials, for example, tell us that interest in a proficiency model is growing among faculty at several institutions, that work is under way to define learning outcomes for programs and courses and build the information analytics infrastructure to support the model. We suggest that, as soon as possible, institutions where interest and capacity are evident be given a green light to move to this model. Thats the pattern of innovation and change in every industry. Why would it not be true of postsecondary education? Past efforts to improve postsecondary systems in Minnesota have focused almost entirely on the supply side, improving capacity and counting on institutions and systems to change. Given how thats worked out, perhaps its time for a concerted focus on demand-side strategies, realigning the incentives around the results needed.

Move to a Proficiency and Outcomes Model

Even people who agree that this shift is both desirable and overdue wonder how to make it happen. What forces might persuade institutions to undertake such fundamental change? We nominate here the employer community, for starters. Major employers already use sophisticated assessment instruments to screen people for, if not every entry-level job, any position carrying significant responsibility. These tests are a kind of facsimile of what employers believe people just show up knowing how to do. A meta-analysis of these assessments would almost surely yield a composite set of expectations from employers, as well as specialized sets of expectations differentiated by industry and type of job.

Why not use these? Meeting these expectations could become a condition of employment in Minnesota. Sharing these standards could go a long way toward building a common understanding of what we expect from students and from postsecondary institutions. Getting there from here likely requires the combined clout of the Itasca Project, the Minnesota Business Partnership, and the Minnesota Chamber of Commerce. The Itasca Projects mid-summer release of a report calling for higher education curricula to be better shaped around meeting employer needs drew an immediate affirmation from MnSCU. MnSCU, fresh from a round of listening sessions conducted with the Minnesota Chamber of Commerce, said its embarking on an initiative to do that. The Itasca report also hammered hard on the need for more completions of degrees and certificates, not merely more starts. If Minnesota were to move in this direction, the results would be the long-desired but chronically elusive clarity about expectations, likely lower increases in cost, and higher rates of program or degree completion. In time, the terms two-year degree and four-year degree might slip from the common lexicon, as students move through at their own paces.
Specific Action Steps to Get to a Proficiency Model

Organizations and whole institutional systems, even while steeped in traditions and wrapped in their evolved cultures, still respond to incentives. Indeed, organizations and people working in them respond to the way work is structured and the incentives that encourage one thing over another. So one canard to dismiss is the notion that colleges and universities are too resistant to change to adapt to fast-changing conditions. It is a matter of aligning incentives with the results the state wants. If the state wants better alignment between postsecondary education and the economy, someone has to design a new architecture of incentives. Besides, to put the matter bluntly, much of postsecondary education has become a system by which students learn to collect credits to get a credential. The Governors Workforce Development Council, as it lays out what should be done, highlights goals of postsecondary credentials. These goals are well-intentioned, but rooted in an obsolete way of looking at the workforce and postsecondary education. There are many students who are energized by learning, but most indicators suggest that most students learn to game the system, endure the process, and get the degree. The evidence shows up in how little so many college graduates know and how inadequately they speak and write. The system of credits is only a century old, devised by college administrators as a way to keep score and to rationalize the value of professorial labor. (It was also decisively promoted by Andrew Carnegie as a quid pro quo for instituting a regime of pensions for faculty.) What concerns every employer and ought to concern every student is what is learned. What do graduates from postsecondary institutions now know, and what are they able to do? But apart from the close interaction among some community and technical colleges with the employer community, theres been scant evidence of systematic institutional interest in tracking whether postsecondary programs produce good preparation. As one member of this group quipped in an early meeting, My daughter just graduated from a highly selective liberal arts college. They made sure they knew a lot about her before admitting her. But they know less about her on graduation day than they did her first day in college. This should not be the case. Until recently, it was technologically difficult and unaffordable to track student proficiency. No longer. An academic institution can now define the expected knowledge and skills that each student in a degree or certificate program should demonstrate; and each institution can know, in real time, where any student stands relative to the expectations. It is not necessary to

1. Capitalize upon the apparent growing interest among colleges and universities in Minnesota to move toward a proficiency model. While in this report we do not feel free to name institutions, it seems clear that institutions in the public, private and for-profit sectors are actively moving in this direction. The AAC&U is emerging as a national leader on this front, and they have identified Minnesota as a major laboratory. If institutions in Minnesota respond, the prospects for national leadership are significant. 2. Challenge the employer community to publish and systemically share its standard expectations. We see increasing interest from higher education institutions in digesting these expectations and calibrating curricula to align with them. 3. Put Minnesota at the lead among states liberating students (and institutions) from the fragmentation of higher education into course completions, substituting a useable record of what learners know and can do. 4. Design a regime of new incentives to accelerate institutional and system change.

change the way students enroll or pay tuition. It is at least ironic that even for those students who are energized by learning, most academic institutions have little or no idea about their graduates individual abilities, and collective strengths and weaknesses. The system was never designed to pay attention to these questions and seems incapable of responding to them. On the other hand, accreditation agencies are now asking institutions to produce outcomes assessments as they approach re-accreditation. Obviously, its feasible for a college or university, while it continues to run on credits for accounting purposes, to use expected and actual student-demonstrated capabilities (the accreditors phrase is student learning outcomes) as the new system for measuring student achievement. And contrary to what many in higher education believe, the federal government allows institutions to award credits based on factors other than time spent in class and to award degrees based on direct assessment. So there is no real jeopardy on financial aid awaiting proficiency pioneers. Once some institutions move entirely to proficiency as the standard and employers can easily read transcripts to ascertain what graduates know and what and how well they can perform, the credit-collecting, credential-seeking, co-dependent system will be undermined. Incentives would speed up this migration, but no one should expect change to come easily. The Bush Foundation has a major program assisting 11 Minnesota schools of education to raise the quality of teacher preparation. Deans and faculty see the logic in curricular changes and recruitment standards, but the notion of facilitating placement in jobs and actually tracking the performance of teachers over a three-year period is not an easy sell even in the presence of financial incentives. So how might some Minnesota institutions move to this model? Might the MnSCU system put some incentives and supports in place so that the state can see models of how this would work? The key incentive: link budget allocations to outcomes. Not all at once, but slowly provide increased funding only for institutions willing to commit to a proficiency platform. Target any new state dollars for higher education to this goal. One state, Oregon, has announced its moving toward a proficiency-outcomes model, commitments that await the arduous challenges of implementation. And the AAC&U is in its sixth year of developing and testing a 21st century learning outcomes model; a growing number of states are registering interest.

Also, the National Association of State Directors of Career Technical Education recently released a set of designed standards for 16 career clusters, capped by a dozen overarching career-ready practices.

A Learner-Centered System
The system could and should be reconstructed around learning, not attending. Dozens of colleges and universities around the nation are already demonstrating the feasibility of specifying the proficiencies (skills, knowledge, and what students demonstrate they know and can apply) needed for citizenship and good employment. Beyond a foundation level, these proficiencies can easily be differentiated by employment sector, even particular kinds of jobs. Students should have information about where they can seek their education and be empowered with robust student grants to choose whatever institution or combination will deliver the best results.
Creating a Learner-Centered System

1. Get more students to take postsecondary courses while they are in high school. Reward institutions that promote a blurring of the well-known bright lines between high school and college. 2. Recognize that the technology platform is the new arena for learning. Education from start to finish cannot ignore how technology has already changed learning. Welcome institutions eager to embrace this platform. Give them space for finding the blend of online and face-to-face learning that works best.

Improving PSEO as State Policy

The state is currently working on making its Postsecondary Education Options (PSEO) more flexible, offering participation in college courses as early as 10th grade and assuring students that they will earn both college and high school credit for their work. In addition, there is now a scholarship incentive for those finishing high school early. A few school districts are active in blending the high school and postsecondary experience Anoka for several years now and more recently Staples-Motley. Irondale High School in the Mounds View district in the northern Twin Cities suburbs has produced blended programs that attracted a visit from the U.S. Secretary of Education. A group of larger employers in Mankato and other cities in the southern part of the state are proposing to charter a regional high school (Waldorf Technical Academy) combined with a corporate

university, aimed at attracting disengaged youth who could find success in southern Minnesotas manufacturing sector. Blurring the lines and blending the model of schooling for these students offer significant savings to families (and to the state), but more importantly, raise the likelihood that students will get the postsecondary education they need to participate in the economy. Even more significant is the apparent effect among minority students. One recent study by the Center for School Change showed that taking a postsecondary-level career-tech course while in high school dramatically affected the high school graduation rate among African American students.

Why not then turn to the states remaining capacity for higher education leadership the Office of Higher Education? This agency, now entrusted with a complex program of financial aid, could also take on the role of promoting responsible use of the PSEO policy. The office could become the go-to source for information about PSEO. In addition to keeping utilization records, the office could pursue relevant research about the effects of the program, and advocate for needed improvements in the law.

Online Learning Geared to Proficiency Documentation

The monopoly over credentials, cemented in the system of accreditation, is showing cracks. New vendors (such as MIT, Harvard and Stanford) are offering certificates or badges (Khan Academy), and while those are not degrees, once employers and the general culture start recognizing them as valid measures of preparation, the monopoly will be effectively broken. Postsecondary education all over the U.S. is growing slowly, except in the online platform. Its been a decade since MIT offered the outlines of its courses online. Today MIT offers sophisticated online courses with a certificate of completion that says MITx. Straighterline is teaming with Educational Testing Service (makers of the SAT test) to produce an advanced assessment tool thats outside the conventional university boundaries.

Making PSEO More Mainstream

Minnesotas policy of exposing high school students to postsecondary education early has always been awkward in implementation. Faculties in the states colleges and universities reputedly have mixed feelings about having younger students in their classes. Financially, just as airlines cheerfully fill an empty seat, colleges enjoy marginal additional income by having a PSEO student in a class; but they lose money if the PSEO demand results in more sections (more flights scheduled). Further, even as several amendments to the law were enacted in the 2012 session to clarify the issue about college credit and extend access to sophomores for certain courses, the prohibition on marketing the financial savings to students and families remains in effect. MnSCU leaders say that their only central concern about serious promotion of PSEO is that students will find failure at the end of the road of aspirations, and even disqualify themselves from potential Pell grants. Accordingly, these institutions discourage enrollment by those not considered ready for college success. So, other than the perfunctory obligation of school districts to provide information, the job of explaining this opportunity to students and families resides nowhere. No agency takes any interest in advocating changes to carry out the policys purpose. The higher education community has shown little interest in promoting PSEO use. And most school districts, despite retaining property taxes and any excess levy dollars, thereby increasing their actual revenue per student, appear focused on the dollars diverted for tuition that subtract from their state aid.

Even as several amendments to the law were enacted in the 2012 session to clarify the issue about college credit and extend access to sophomores for certain courses, the prohibition on marketing the financial savings to students and families remains in effect.

The spring of 2012 saw several of the nations most prestigious universities make bold statements of intent for expansive online offerings. Harvard and MIT made a joint announcement, taking their edX programs to scale, offering certificates of completion. University of California, Berkeley, where some professors are early movers with online offerings, has now decided to align with edX. Earlier this year two Stanford professors highly esteemed among colleagues and popular with students offered their courses online for free. The first course, on artificial intelligence, attracted 160,000 students from 190 countries. Of those students, 20,000 completed the course and got a
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certificate. Now one of these professors, Sebastian Thrun, has announced that hes done teaching at Stanford; hes founded the online university Udacity to take his model to scale. Another Stanford group has founded the Coursera model, which, as of this writing, has signed up 33 institutions (among the most prestigious in the U.S.) and has enrolled more than a million students. Old-timers like the University of Phoenix and Western Governors University now have cousins and rivals, with names like Minerva and Udemy.

Online learning is just now moving from the slow- change trajectory at the bottom of the S- curve to a higher velocity, along with higher quality.

What happens next, in the now faster-paced, inevitable disruption of the postsecondary education industry? The game-changer occurs, as Harvard Business School professor Clayton Christensen predicts, when the accreditation groups accept the reality that higher education has become as modular as every other industry. Its like what iTunes did to albums. The musicians still matter, but the album is not relevant. And note that as vinyl albums gave way to eight-track tape decks, then cassettes, then CDs and digital downloads each stage seemed disruptive but was not; the products took different form and got better. The disruption came when it became possible to order (download) just the song you want at a reasonable price. Substitute courses for songs. While it is risky to compare popular culture behavior to higher education, one has to ponder how much growth occurred in the music industry from individualization. How long will it take before the competency conveyed by this learning model generates valid acceptance in the market? Once it does, whats the future of the system of credits as the dominant, if not exclusive, means of tracking a students progress? The key is moving to the proficiency platform. Minnesota should start down this path and lead the nation in changing the system of postsecondary education.

Online learning has been easy for traditionalists to dismiss. Its constantly assailed by critics who see online as inherently impersonal, compared to the regular university classroom or lecture hall. Courses have been available for some 20 years, but only recently has online course content been rising in quality. Many of todays offerings are highly sophisticated, interactive software and web platforms, increasingly incorporating adaptive, individualized assessment. Its market, while growing faster than campus enrollments, has been slow to build to consequential levels. But what the skeptics do not see is the classic S-curve that describes nearly every innovative breakthrough. Online learning is just now moving from the slow-change trajectory at the bottom of the S-curve to a higher velocity, along with higher quality. So far, since credits as the principal metric are so deeply ingrained, these institutions, while increasingly offering a learning experience that is profoundly different from the traditional college class, are awarding credits as the credential.

APPENDIX A
A Brief History of Postsecondary Education in Minnesota*
The history of postsecondary education in Minnesota is one of various stakeholders and the schools they founded tackling the educational and career preparation needs of a fast-changing society. Both the state Legislature and private interests have created and generously supported a variety of colleges, universities, and other institutions to meet pressing needs at a given time. These institutions have then been expanded and modified, and new institutions have been created as needs have changed. With some institutions even predating statehood, postsecondary education in Minnesota has included: (1) normal schools, which later became state teachers colleges then state colleges and universities; (2) private religious colleges and seminaries, some of which have evolved into full-fledged, nonsectarian universities; (3) community colleges and (4) technical colleges, both originally extensions of school districts, later taken over by the state and greatly expanded in number and enrollment; (5) private nonprofit and proprietary schools, originally focused on particular trades or occupations, with several now offering associate, baccalaureate, and even graduate degrees, and a growing number with multiple campuses, based in other states and offering some or all of their courses online; and (6) the University of Minnesota (U of M), the states land grant university, formally authorized by the State Constitution and with campuses and research stations throughout the state. Other than the U of M, Minnesotas public postsecondary institutions (#1, #3 and #4 above), all began with strong local ties and campus-level governance. But, over time, the state Legislature gradually brought them together as three separate multi-campus systems. Then, in 1995, all state, community and technical colleges were brought under a single board and chancellor as Minnesota State Colleges and Universities (MnSCU). The University of Minnesota, with its own collection of campuses and research stations across the state, remained independent under its constitutional mandate and board of regents. 1) Normal schools to state universities Historically, one of the first sets of competencies identified as needing postsecondary education was teaching K-12 students. Most normal schools in Minnesota and other states eventually became state teachers colleges, and some later added graduate programs and became state universities. Minnesotas first Legislature (1858) passed an act providing for the establishment of three state normal schools: Winona (1859) was the first normal school west of the Mississippi; then Mankato (1868), St. Cloud (1869), Moorhead (1888), Duluth (1895, was transferred to the University of Minnesota in 1947), and Bemidji (1919). Southwest State in Marshall was created as a four-year undergraduate college, accepting its first students in 1967. And Metro State University opened in 1972 as a college without walls, designed for working adults to complete their junior and senior years of college. 2) Church-related, other private colleges, universities Of the almost two dozen traditional private colleges in Minnesota, most have origins in the religious and ethnic communities that founded them. Examples include: Hamline University (Methodist, 1854); Carleton College (Congregational, 1866); Macalester College (Presbyterian, 1874); Gustavus Adolphus College (Swedish Lutheran, 1874); and St. Johns University (Roman Catholic, 1857). Some of Minnesotas private colleges originally served just men or women and had affiliated seminaries to train clergy. Some have retained a strong religious identity, but most serve students from a variety of religious backgrounds. Others, including the Minneapolis College of Art and Design (1886), were originally private, but also nonsectarian and nonprofit. Most of the states nonprofit private colleges have remained four-year liberal arts institutions, with several establishing national standing and attracting students from throughout the country and around the world. Several, including the University of St. Thomas and St. Marys University of Minnesota, have become multicampus universities, with large graduate schools or programs in business, education, and other fields. More recently, Minnesota has become home to three of the nations large for-profit universities, Walden, Capella and Globe universities, which all offer a variety of undergraduate and graduate degrees online. Meanwhile, dozens of private, for-profit universities based elsewhere

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have begun offering undergraduate and graduate courses and degrees to students without having to leave the state. Some, like the University of Phoenix and National American University, have facilities and faculty in the Twin Cities, while they and most others offer courses and degrees online. 3) State junior and community colleges Minnesotas first public junior colleges were established by the Mayo family in Rochester in 1915 and by five Iron Range school districts before and after World War I. Their purpose was to make the first two years of college physically and financially accessible to local high school graduates. Their academic value and status, however, were initially dependent on acceptance of transfer credits by the University of Minnesota, which became a de-facto gatekeeper for these institutions. Although junior colleges were created by other school districts before and after World War II, the states role did not expand significantly until the state Legislature created a State Junior College Board in 1967. The number of and enrollments in state junior (later community) colleges then expanded significantly until they were brought under a single board and chancellor with state universities and state technical colleges in 1995. 4) State vocational technical institutes, colleges Like community colleges, what became Minnesota state technical colleges were originally creations of local school districts. In 1945, the legislation introduced the concept of area vocational technical institutes (AVTIs). The first AVTI was designated in Mankato in 1947, and six more followed in the next five years. By 1971, there were 31 AVTIs in Minnesota including six in the Twin Cities. The technical colleges were eventually brought under a state board with their own chancellor, and then became part of MnSCU in 1995. 5) Private licensed and registered institutions Minnesotas Office of Higher Education is responsible, under state law, for licensing all private career schools doing business in the state and for registering virtually all private two- and four-year degree-granting institutions. Most career schools are propriety, although a few, including Dunwoody College of Technology (founded in 1914), are organized as nonprofits. There are currently 118 licensed private career schools, including 103 with a campus or office in Minnesota and 15 based elsewhere. About 40 percent of these schools do not offer degrees or credits. The other 60 percent offer two-year degrees or certificates that focus more narrowly

on specific skills, ranging from auctioneering to pet grooming to diesel truck driving. With some overlap, Minnesotas other large group of private colleges and universities are those that must register with the Office of Higher Education if they are granting two-year, four-year, or graduate-level degrees. Of these 157 institutions, at least 65 are based in other states, and all but a handful offer only online courses and degrees in Minnesota. Overall, the Office of Higher Education estimated that 67,000 Minnesota postsecondary students took at least one online course in 2010 doubling the number of online students in just three years. 6) The University of Minnesota The University of Minnesota was chartered by the Minnesota Territorial Legislature in 1851, with a campus to be located in Minneapolis. With federal passage in 1862 of the Morrill Act, creating land grant universities, a second campus was added in 1874 in what was then a rural northwest corner of St. Paul. This satisfied the Morrill Acts mandate to create programs in agriculture and the mechanic arts. Today, with 52,500 students, the Twin Cities campus is the nations fourth largest. Subsequently, the University established campuses in Duluth (a former state normal school) in 1947, Morris in 1960, Crookston in 1965, Waseca in 1971 (then closed in 1992), and Rochester in 2006. Total enrollment for all U of M campuses is now about 69,500, including 44,000 undergraduates, 18,300 graduate and professional school students, and 6,800 non-degree students. The University also has a significant statewide presence with 800 extension educators grouped in 18 county clusters and available to farmers, 4-H youth, and others in every corner of the state. In addition, the U of M has 18 research and outreach centers including an agricultural experiment station in Lamberton, a biology research station and laboratories in Itasca State Park, and the Minnesota Arboretum in Chanhassen. Among the more intriguing offerings is the 5,000-acre Minnesota Outreach, Research and Education Park (UMore) in semi-rural Dakota County. UParks vision is to build a sustainable new community of up to 30,000 residents over a period of 25 to 30 years. 7) Impact of the MnSCU merger since 1995 One of the Legislatures goals in creating MnSCU was to reduce duplication from administrators to courses and

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facilities. Theres just one chancellor and one board, for example, instead of three of each. Other than the de-facto merger of Bemidji State University and Northwest Tech College, there seems to be less impact on the four-year state universities and their graduate programs. But for the two-year institutions, there have been major changes through mergers of community and technical colleges serving the same geographic areas, and the clustering of up to five campuses as one college under one president reporting to the Chancellor and board. As a result, MnSCU oversees the same seven state universities. But there are now 24 two-year colleges operating 47 campuses. Only 11 of these colleges operate just one campus, and most of those are the result of mergers of community and technical colleges in the same locality. Overall, MnSCU serves about 277,000 students in credit-based courses and 157,000 more in non-credit courses. And its colleges and universities produce about 34,700 graduates each year.

*Compiled by John Adams, retired professor of geography and former dean of what is now the Humphrey School of Public Affairs at the University of Minnesota. Some additions to Adams work, originally done for the Citizens League, were made by The Centers Jon Schroeder.

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ABOUT THE CENTER FOR POLICY STUDIES

Founded in 1981, The Center for Policy Studies is a Minnesota-based nonprofit, nonpartisan policy design organization. The Center designs policies to improve large public and private systems like health care, K-12 schooling, and postsecondary education and then works with policy leaders and others to implement its recommendations. Regardless of the system, the usual approach blames failings in system performance on the people and organizations who run it and work in it. The solution, then, is to provide financial assistance or regulate the system into improving its performance. But too often the cause and results of such an approach are system-level incentives that do just the opposite by rewarding undesired performance and punishing performance that produces the desired results. Instead of such failed improvement strategies, The Center seeks to use system-level redesign to encourage organizations and individuals in large systems to change and improve their own performance on a continuous basis and in their own self-interest. Under its founding president and board chair, Dr. Walter McClure, The Center initially focused this approach on big system redesign, urging health care providers, consumers, and employers to get the incentives right. Later in the 1980s, board member Ted Kolderie added K-12 education to The Centers policy agenda, playing a major role in expanding public school choices, including creation of new, non-district public schools through chartering. Kolderie and fellow board member Joe Graba created Education Evolving, a partnership between The Center and Hamline University, to also expand system-level redesign in the K-12 district sector. And, most recently, under the leadership of Dr. McClure and Senior Fellow and President Dan Loritz, The Center has launched several new initiatives on major system redesign, including the working group that produced this report on postsecondary education and workforce preparation. For more information about The Centers work on achieving results through large system redesign, go to www.centerforpolicy.org. For information on K-12 education redesign, visit The Centers www.educationevolving.org project website and its blog, EducationHow.

325 Cedar Street, Suite 710 Saint Paul, MN 55101 651-212-5128 info@centerforpolicy.org www.centerforpolicy.org www.educationevolving.org