How to Stay on Top

WASHINGTON -- At a time when federal and state politicians seem happy to cut and reluctant or unable to increase spending on higher education, a long-awaited report from the National Research Council, the policy arm of the National Academies, argues that the country cannot maintain its position as a leader in research without sustained investment in its public and private universities.

The report, “Research Universities and the Future of America: Ten Breakthrough Actions Vital to Our Nation’s Prosperity and Security,” is the result of a call from a bipartisan group of members of Congress, who asked the Academies in 2009 to come up with 10 actions the federal government, state governments, research universities, and others could take to “maintain the excellence in research and doctoral education needed to help the United States compete, prosper, and achieve national goals for health, energy, the environment, and security in the global community of the 21st century." The report was framed as a follow-up to the Academies’ 2005 report “Rising Above the Gathering Storm,” which focused on steps the national government could take to ensure that the U.S. remained competitive in science and technology.

The 10 recommendations that compose the committee’s final report, released Thursday, are a mix of policy principles, such as revitalizing and redefining the partnership between the federal government, state governments, research universities, and businesses, as well as a handful of new proposals such as a federal “Strategic Investment Fund” through which states and institutions could receive matching funds from the federal government for new professorships and infrastructure improvements. In general, the report asks for a larger commitment from the state and federal governments in exchange for greater efficiency and more openness to collaboration with businesses on the part of universities.

While the report discusses issues challenging all research universities, it expresses a clear concern for public universities. “Support for public research universities is a national challenge of immense importance, since these institutions produce the majority of advanced-degree recipients and basic research for the United States,” the report states. “Any loss of world-class quality for America’s public research institutions seriously damages national prosperity, security, and quality of life.”

The report states that public universities are vital to the country’s success, since they do a majority of federally funded research and educate a majority of graduate students. But that sector has faced major challenges over the past few years, particularly in terms of decreased state funding, and institutions are desperately looking for answers about how to address those shortfalls. “There is a category-5 on the horizon,” said Charles O. Holliday Jr., chair of the committee that wrote the report and former chairman and chief executive of DuPont.

Those concerns were underscored by the presence of committee member Teresa Sullivan, president of the University of Virginia, at Thursday’s presentation. This past weekend, Sullivan was asked by Virginia’s governing board to resign after less than two years in office, with the board’s chair saying the university needed “bold and proactive leadership.” Before being named president at U.Va., Sullivan held top positions at the University of Texas system and the University of Michigan, institutions that, like U.Va., have come to rely on funds from sources other than the state.

At Thursday's presentation, Sullivan spoke about the competition for state and national funds that universities face from Social Security and health care programs, and how those programs reflect the priorities of different generations and, increasingly, different ethnic groups. She also discussed the need to rethink the teaching of under-represented groups to ensure their continued interest in science and technology fields, as well as the need to continue to attract and retain international students. She did not comment on the issues related to her departure.

Given the current political environment and the economy, it is unclear whether Congress or state legislatures will be willing to spend the billions of dollars necessary to move on any of the council’s recommendations. In fact, many research universities are expecting to see less federal and state support in the years ahead. And because of their own resource constraints, there are also questions about whether universities can even begin to make the types of efficiency reforms in the report’s recommendations.

Rebuilding a Partnership

At the heart of the report’s first four recommendations is a push to get the major stakeholders of the research community to ante up. “There is a sense that we need to rethink the partnership between the federal government, state governments, research universities, and businesses,” said Charles M. Vest, president of the National Academy of Engineering and former president of the Massachusetts Institute of Technology, to open Thursday’s presentation.

The major historical sources of support for research universities – the federal government and state governments – have decreased their research spending in recent years. Since 2002, per-student state appropriations have dropped an average of 25 percent across the country and as much as 50 percent at some universities. The decline is the result of a confluence of factors, including increased pension and health care obligations that are taking up a larger portion of state budgets, decreased tax revenue as a result of the economic downturn, and reluctance among lawmakers and the general public to increase taxes to pay for increased spending.

And while overall spending for research and development over the past three decades has hovered between 2.5 and 2.8 percent of GDP, a fairly high level, other nations have begun to surpass that mark. Japan and South Korea now invest close to 3.5 percent of their GDP in research.

As a result of those decreases, an increasing burden is being placed on students to not only cover the cost of education, but also to subsidize research. “No one entity can cover the full burden of costs,” said Francisco G. Cigarroa, chancellor of the University of Texas System and member of the committee.

To address funding shortfalls, the report recommends more stable policies and funding for university-performed research and graduate education. The report says the federal government should provide full funding for the amount authorized in the America COMPETES Act, which would double the level of basic research conducted by the National Science Foundation, the National Institute of Standards and Technology, and the Department of Energy Office of Science. The report also calls for state legislatures to restore per-student appropriations for higher education to the mean level for the 15-year period from 1997-2002, when state higher education appropriations peaked, as adjusted for inflation.

But other than attempting to persuade state lawmakers, the report makes few policy recommendations for institutions in states where lawmakers don’t have room in the budget to increase appropriations or the political appetite for increasing revenues. One idea the report does lay out is for the federal government, which currently seems more likely to support higher education than the states, to leverage its spending to ensure that states don’t replace state funding with federal funding. “Federal programs designed to stimulate innovation and workforce development at the state level … should be accompanied by strong incentives to stimulate and sustain state support for their public universities,” the report states. This kind of maintenance of effort provision was part of the stimulus package.

The report also calls for the creation of a “Strategic Investment Program” that would fund endowed faculty chairs and improvements to cyber-infrastructure. The report calls for the federal government to allocate $7 billion a year over the next decade to such a fund. Universities would be required to provide matching funds, either from states, businesses, philanthropic organizations, or other partners, to secure the funds.

The report also calls for the business community to get more involved in higher education. Holliday said the current model is a “buyer-seller” relationship, where companies can go in, take the intellectual property and students they want, and not have to contribute too much back to the universities. He said he sees future interaction between businesses and universities as more of a partnership.

University Responsibility

But if national and state lawmakers are going to chip in more funds for research universities, the report says, universities themselves are going to have to become more efficient to improve the return on investment.

The report highlights a number of cost-reduction strategies that universities have adopted in recent years, often creating controversy on campus, such as the consolidation of administrative services such as payroll, information technology, and human resources into one universitywide service center to eliminate duplication; the use of voluntary separation programs for staff and faculty to rehire selectively; increasing the number of reports per administrator; the use of tuition policies to improve four-year graduation rates; the elimination of low-priority programs; and the use of technology to improve in-class productivity.

The report recognizes that “a basic problem is that universities generally do not have the information and tools to identify significant reductions that are consistent with their agreed-upon outcomes,” and stressed the need for better cost-accounting and for outcome measurements to be agreed upon. That latter point was the subject of a separate book-length report by the Academies released last month.

Federal and state governments also have a role to play in improving university efficiency and cost-effectiveness, the report states, particularly by relaxing burdensome and sometimes unnecessary regulations and reporting requirements. According to the report, the federal government should also change its funding formula so that research grants cover the full cost of whatever program they are funding.

Universities also need to do a better job educating graduate students, and the report calls on them to improve time-to-degree and better prepare students for careers both inside and outside of the academy. And universities also need to get better at educating under-represented groups, particularly in science and technology fields, and developing the pipeline for young academics, the report states. The federal government should also make it easier for international students studying in the United States to obtain citizenship and residency.

Will Anything Change?

Many of the report’s recommendations have been seen before. The calls for increased research funding and restored state funding have been ringing continuously for the past few years, as have calls for more business involvement in higher education and for universities to do a better job training under-represented minorities and giving opportunities to young faculty members.

What’s different this time, the committee members said, is that the pressure is finally being felt by all stakeholders. “The sense of urgency is there today,” said William Frist, former U.S. Senate majority leader, medical doctor, and member of the committee.

M. Peter McPherson, president of the Association of Public and Land-grant Universities, who was not part of the committee, echoed Frist’s point. “The situation has become sufficiently serious that it cannot be ignored any longer,” McPherson said.

Like the “Gathering Storm” report, much of the new report’s success likely hinges on the committee’s ability to sell its ideas to state and federal policymakers, business leaders, and research university administrators. Holliday said the committee will hold a series of workshops across the country to try and get the message out.