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Education's impact on economic competitiveness : hearing before the Subcommittee on Education, Arts, and Humanities of the Committee on Labor and Human Resources, United States Senate, One Hundred Fourth Congress, first session ... February 2, 1995 online

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school were required to accomplish that. So it was pretty much an
invention that came about at that time.

Senator Pell. Thank you. I am so glad that you are here. I ad-
mire Hal McGraw so much.

Mr. Dionne. He is a great admirer of yours, Senator.

Senator Pell. I am very grateful for the Harold McGraw Prize
some years ago, and so I welcome you here with enthusiasm.

Mr. Dionne. Thank you.

Senator Pell. The question comes up at this time regarding vo-
cational education, which really plays a very real role here. I call
them the taxpaying institutions, and yet I realize that many of the
errors and foibles in the question of paying back loans come out of
the same community. I was wondering if you had any thoughts as
to how we can clean up the reputation of vocational education.

Mr. Kean. That is a tough one, and I think that is one of the
things we are going to have to look at on the commission, and I
do not want to prejudge what our results would be. But I think a
number of the things that are being done by those institutions, at
least in some States, are also being done by community colleges.

We have an obligation — as you know, there are a number of
those institutions that you are talking about that are very fine,
that do the job; there are a number of them that are fly-by-night
institutions and really are not doing the job for the people who go
there and certainly are not repaying the money that comes to those

So I do not know the full answer, other than the fact that we
have got to police that much better — and not just to get our money
back, but in addition because I think the same institutions where
the loan rate is so bad are probably the same institutions that are
not doing the job anyway for the people who go there.

Mr. Dionne. It turns out that one of our companies is a continu-
ing education center which is involved in home study courses. For
years, we have been leaders in the industry in terms of quality
standards, and the industry itself has made a lot of efforts to im-
prove its image and its reputation.

I am sometimes concerned about the ease with which individuals
can sign up, the fact that there is no accreditation whatsoever for
these courses, there is no oversight responsibility. It is quite a con-

On the other hand, there are thousands of people now who enjoy
greater employment than they did prior to having taken these
courses. It is a very liberating experience for people who cannot
have access directly to universities or community colleges. So it has
its positive images.


I think the thing to concentrate on is the administration of the
gprants, or the administration of the money. I was concerned with
the suggestion that $2,600 might be made available for this pur-
pose without the accompanjring accountability. Otherwise, I think
we will get right back into the situation we were in before, where
grants were given and organizations were formed for the expressed
purpose of absorbing those grants, and not a lot of education took
place as a result of it.

So there needs to be serious thought given to the administration
and accountability.

Senator Pell. And I guess your commission will be focusing on
this subject a good deal.

Mr. DiONNE. It will now, sir.

Senator Pell. I like the idea, too, that the tax-paying institutions
should be given a fair hearing. They have taken quite a rap, some
of them, and it bears looking at.

Finally, you both mentioned restructuring or reinventing higher
education. Do you have any specific thought in that regard, on one
or two items?

Governor Kean.

Mr. Kean. I have some thoughts on direction. Although higher
education is so diverse as you go from the kinds of schools you are
talking about to community colleges, all the way up to research
universities, I think each one has its own way to restructure, just
as you cannot restructure all businesses the same way.

We have already at our small university gotten $2 million just
out of the administrative expenses, and I tnink we are stronger be-
cause of it, not weaker. We are a better place than we were, as well
as a tighter place, and we have some other things in mind that we
are going to do.

I think we have to look at the kind of thing I mentioned in my
remarks about teaching still being undervalued in many institu-
tions because too many institutions are still really trying to copy
the great research universities. That is not necessarily their job.
Their job is to transmit knowledge, and that should be rewarded
in a way that it is not necessarily rewarded now.

I think we have got to look at some of the ways we are governed.
Joe mentioned that in many of our large institutions, we are reallv
governed department by department. That does not make mucn
sense anymore. It is not the best way to govern anything, and it
is very expensive. We have got to do that in a better way.

There are a number of tnings we can do across-the-board, and
then there are very particular restructurings. I can tell you about
the restructuring I want to do at our small place. Somebody at a
State university would probably tell you the restructuring that has
to be done there. But it is all available, it all can be done, and it
all, I think, can lower cost to some degree and also improve quality.

Senator Pell. Thank you,

Mr. DiONNE. I think there is perhaps one step that would be very
helpful in this regard, and that is American business, in sharing
with each other wnat proved to be successful, has come up with an
awful lot of improved productivity.

If an institution like the American Productivity Center were in
existence, where best practices were shared among universities, I


think you would see a corresponding improvement in the productiv-
ity of those institutions. And I think this should be largely a pri-
vate effort in terms of financing it, but certainly we comd use the
encouragement of the Senate to create such an entity.

Senator Pell. Thank you very much.

Mr. Chairman, I would ask unanimous consent that my opening
statement be inserted at the beginning of the statement, after

Senator Jeffords. It is gn^anted.

Senator Pell. Thank you.

Senator Jeffords. Well, thank you both for some very excellent
testimony. I find myself in a position where I take this job very se-
riously, and at a time in our history when I am afraid we are going
to make some very bad decisions about the future of the country
with respect to resource allocation. We are all worried about our
budgets; as you know, we are being forced to look at how to balance
the Federal budget. And my deepest concern is that we will all hold
hands, and every program will take its cut. Yet any rational analy-
sis would say that if what you are cutting is undermining your
ability to raise money and income, it is very counterproductive to
be cutting back on those things which will increase your productiv-
ity and increase your resource base.

But that is what we are faced with, and we are faced with others
who say that the Federal Government should get out of education
and turn it all back to the States and local governments, and if you
take a look at what may be required to meet real standards, it is
going to take a 30 or 40 percent increase in your school budgets
back in the States. I am not going to go home and tell my local
school board that they have to raise another 30 or 40 percent on
property taxes so that our schools can achieve world class stand-

I just wanted to mention that, but also ask you with respect to
higher education in particular, what we can do and what we must
do to make sure that there is accessible education and financing.
But there is also a broader question and one which intrigues me.
This Nation is leading the world in the Information Age, and we
are making incredible advances. I was over at the Library of Con-
gress the other night, seeing what the CD-ROM capacity is for edu-
cation and looking at the plans for librarii^s to convert themselves
into a totally different concept of furnishing education to the popu-
lation. And the same technologies are being placed in the schools.
So I thought, well, what a chance for this country to leap forward,
and we can then leap ahead of other nations, because we can teach
everybody faster. Then I found out, in asking questions, that even
though we are the leader in producing the technology, we are not
the leader in utilizing it. In fact, almost all of our competitors have
much better access to computer technology in their schools than we
do. Some of our schools in the more affluent areas are fine, but the
average number of computers in schools in the urban districts,
which need all the help they can get — they are almost nonexistent.

So I wonder, if you take a look at increasing productivity in high-
er education, is there anything going on in the utilization of the
new breakthroughs in the Information Age?


Mr. Kean. Yes, there is, and because you personalize everything,
let me tell you what we are doing at Drew University. We have
started a program where we give, just giwe, as part of tuition each
entering student a computer, a modem, and all of that. That is
theirs to keep for the A years. Everything is plugged into that, so
you cannot live on our campus without using it. If the soccer prac-
tice is 2 hours later, an E-mail message goes out, so that team had
better be checking the computer. The same with theater, the same
with every other student activity. Each student's room has voice

We have recently hooked up with fiberoptic cable, so that stu-
dents' rooms are hooked up to five satellites, so that if the German
professor wants to say, Listen to the news from Germany tonight,
his students can do so in their rooms.

Now, we are a small place, and you can do these hookups more
easily at a small place. But the principle is the same — we believe
that unless we graduate people — we think the humanities which
we teach will teach students how to think and to adapt, and that
is very important — but if they do not also know the new tech-
nology, they are not going to be successful in any profession they
go into in the next century.

So we believe very, very strongly that it ought to be integrated
into the courses, that even humanities courses ought to find ways
of integrating computer technology; we encourage that in our fac-
ulty, and we have had great success in that regard. Our students
are much more employable because of that.

We may be way ahead of the curve, but I think all universities
and colleges are starting to move somewhat in that direction.

Let me say also, on your first point, that I could not concur with
vou more about the need to look very, very carefully at the budget
before the cuts. All of us support moving toward a balanced budget.
That is something the country supports, and all of us do, too. But
I have been part of a number of institutions — I ran a small busi-
ness, I now run a university, and for 8 years, I ran a State — in all
of them, I have had to cut from time to time.

You do not do across-the-board cuts. You really have to look at
the value of each program. Some should not be touched at all.
Some may have to be eliminated. But to me, when you look at our
education system and how important that is, when you look at the
fact that for years, to achieve what you and I knew as the Amer-
ican dream, the door was always education. If you were an immi-
grant, your kids could make it through education. They could be a
doctor, a lawyer, whatever they wanted to be — a Congressman.
That is disappearing. And if you let that disappear through unwise
cuts, you are doing something fundamental to this country, and we
are all going to reap the whirlwind.

Mr. DiONNE. On the question of technology, I think you would be
inspired if you were to visit the college campuses of this Nation.
There are any number of them that are very advanced — far more
advanced than the universities in the rest of the world. I think the
Internet would never have bee;^ created without their participation.
Most of them have fiberoptics and computer servers, presenting ad-
ministrative opportunities, but increasingly, course ware is being


developed. I could name for you 25 universities that are world class
in this regard, and you should feel very good about that

Senator Jeffords. Well, that is good to hear. I wish the same
were true for K through 12, which is where our basic problem is.
As pointed out earlier, we graduate each year one million function-
ally illiterate graduates. They graduate from high school with a de-
gree, but some of the standards, such as the ability to read at 6th
grade and do math at 6th grade level for a degree, is a very, very
serious problem, and it is a serious problem for those who are en-
tering higher education. And many kids who have those law skills,
can get into college now. That is very serious.

With respect to availability of post-secondary education through
Pell grants, I showed a chart earlier which indicated that in Ver-
mont, the students who are freshmen now, upon graduating, will
have twice the debt load of those who graduated last year. Is that
trend true at your school as well?

Mr. Kean. Yes. And I will tell you, again, as I have my open
hours and talk to these students and write recommendations for a
number of them who are seniors, that it is affecting their career

I had a student in my office the other day who wants to be a
teacher and hopes someday to be a teacher, but has a debt load
that she does not feel enables her to be a teacher right now. She
said, "I am going to have to go into something that will earn more
money, and maybe, maybe, someday, I can go back to the class-

We need great business people, but we also need good teachers,
good social workers, we need people in the clergy, we need people
in a number of occupations which do not reward people monetarily,
and students now are being excluded from those occupations simply
because they have this great debt hanging over their heads.

It is very, very serious, and they also get to the point where they
cannot borrow anymore. I had a student in my office the other day
whose parents are divorced; the father is in bankruptcy; the moth-
er has taken out every loan she could and has now been denied.
They just cannot get any more loans. There is a gap. This kid has
had 3 years of college and suddenly says, "Maybe I will not be able
to complete the fourth. Maybe what I want to do with my life will
not happen because of that." That is the tragedy, and I think that
is going on on college campuses all over the place.

Mr. DiONNE. At the university at which I serve as a trustee,
Hofstra University, we created a special fund for 3rd-year students
who are unable to make it through, and it has been really impor-
tant to us in that regard. It is an increasing problem.

In the paper which we would like to submit with our testimony,
there is a quantification of the decline of Federal support for edu-
cation as well as State. It is dl year by year and source by source,
and it is a very clear picture of declining commitment.

Mr. Kean. What is happening is that as the Federal and State
governments have declined the commitment, colleges and univer-
sities are trying to pick it up, so they are increasing scholarships
from their own funds. And it comes to a point where it is almost
a losing game as you try to put more and more of your own re-
sources, and unless you liave an enormous endowment, you eventu-


ally reach the point where you are really robbing Peter to pay Paul;
you are taking resources away from the education of the kids just
so you can have the kids there for the education.

Senator Jeffords. There is a cost-saving suggestion floating
which will save billions of dollars by doing away with in-school sub-
sidies for college students. Do you have any comment on that?

Mr. Kean. Well, the proposal I have seen — I will tell you about
the State of New Jersey — would cost students in the State of New
Jersey alone — this is simply one State — but it would cost $20 mil-
lion a year for our students, on top of everything else. It would
mean a number of them would not be able to continue, and it
would certainly deny graduate work to a number of them.

I would hope that this whole panoply of aid to education that has
been developed over a large number of years and serves different
kinds of services, I would hope that Congress would look carefully
at the whole thing before they make decisions simply on a budg-
etary basis.

The poll that I saw this morning indicates that aid to students
in college scholarships is second only to Social Security in the sup-
port of the American people, and that that support goes across con-
servatives and liberals, and politically, it is what you and I would
call a 'liot button." I mean, people get very upset if they think that
people are not going to be given the scholarship aid to attend high-
er education.

Senator Jeffords. The last question. We have a declining num-
ber of our graduates from college who are getting on into graduate
school and being replaced to a large extent by foreign students who
are coming here. What, in your view, is the reason for that? Is it,
on the one hand, the inability to meet the skill standards that are
required? Is it the financial consequences of new graduate school
loans on top of outstanding undergraduate debt?

Mr. Kean. I think it is a combination. People graduate from
school with a large amount of debt. Very often they say, therefore,
they will put off graduate school until they can work for a little
while and then maybe come back when they have paid off some of
the debt. Well, a lot of them do not come back; they get off into
other areas. That is part of it.

Part of it I think is skill. We have some enormously able people,
particularly from Asia, coming to our universities who are, frankly,
better prepared than many of the students who are applying from
our own country.

So I think it is a combination — I think you put your finger on
it — it is a combination of skills and knowledge and of cost. And the
Asian students, in my experience, are willing to work enormously
hard. There is a different cultural aspect. In my experience, if you
ask American students who are doing well, they will say and their
fellow students will say, "Well, they are very bright." If you ask an
Asian student, he or she will say, "No; I work very hard." There
is a difference.

Mr. DION^fE. I think it is right to say there is a cultural phe-
nomenon here, at least in part, because we generally believe as a
society that after you have your undergraduate degree, it is better
to go out and work for a while, get some real life experience and


then go back for an additional degree. So that is one reason it is
deferred in this society as compared to others.

The second thing is that this is particularly acute in areas like
science and mathematics, and part of the reason for that is this
country's attitude toward the engineering profession. We gear up to
accomplish Sputnik, and then we dismantle; and then we gear up
for defense, and then we dismantle; and we gear up, and we dis-
mantle. Students are very bright, and they notice this, and they de-
cide that it is hardly worth a candle to commit in that area, so they
go off and do other things. So it is very hard to plan a long-term
future in a democratic environment. But over time, they have
learned this, and I think they are making their own appropriate

Senator Jeffords. Thank you both very much. It has been very
excellent and very helpful testimony. I look forward to working
with you to continue our efforts to do what we can for education.

Thank you very much.

Mr. Kean. Mr. Chairman, thank you.

Mr. DiONNE. Thank you for having us.

Senator Jeffords. Let me now introduce the members of our
third panel, each of whom brings unique expertise to the debate
about education and competitiveness.

Dr. Robert Kominski comes to us from the Census Bureau, where
he is the assistant division chief for social and demographic statis-
tics. Much of his professional work focuses on educational statis-

Dr. Morton Schapiro is dean of the College of Letters, Arts and
Sciences at the University of Southern California. He is also co-di-
rector of the Project on Economics of Higher Education and has
written extensively on the topic.

Dr. John Bishop is an associate professor of personnel and
human resource studies at Cornell UniversiU'. Prior to his position
at Cornell, Dr. Bishop was director of the Center for Research on
Youth Employment and Employability and associate director for re-
search of the National Center for Research on Vocational Edu-

The final witness is Dr. Kent Lloyd, chairman and chief execu-
tive officer of the Knowledge Network for All Americans. This
amazing organization is a nonprofit venture which promotes edu-
cation and research using highspeed communications.

Thank you all for being here. I look forward to your testimony.
We will start with you. Dr. Kominski.


Mr. Kominski. Thank you, Senator, for the opportunity to appear
before the subcommittee this morning.


Since the Census Bureau began routine measurement in the
1940's, the educational attainment of the United States' population
has continued to rise, and is currently at an all-time peak. In 1993,
four-fifths of all persons ages 25 or older had completed high
school, and over 20 percent had earned a bachelor's degree or more.

When we examine the earnings of individuals cross-classified by
their education, we see there is a strong relationship between these
two factors. Based on data obtained from the 1993 current popu-
lation survey, administered by the Census Bureau, we are able to
show that mean annual earnings in 1992 ranged from a low of
$12,809 for high school dropouts to a high of $74,560 for persons
with a professional degree such as an M.D. Other levels of edu-
cation fall into line with this relationship. For example, high school
graduates earned $18,737; persons with some college but no degree
made $19,666; associate degree holders on average made $24,398;
bachelor's degree holders earned $32,629; master's degree holders
made $40,368; and persons with doctorate degrees averaged

Data from the CPS confirms that the strong relationship between
earnings and education not only exists in average across the entire
population, but within age ranges or at different points of the life
course as well. Looking at the working population across 10-year
age intervals of ages 25-34, 35-44, 45-54 and 55-64, we see the
same strong earnings-education relationship within each age group.

It is possible, using the average earnings within these age-spe-
cific groups, to compute the possible returns to a given level of edu-
cation over the course of a hypothetical 40-year working life, that
is, between the ages of 25 and 64. Doing this, we can see the effects
of the education-earnings relationship compounded over time.

Worklife estimates derived using this method show strong dif-
ferences for educational levels. For instance, high school dropouts
would make about $609,000 over their working life, and hi^h school
graduates would make about $821,000, while persons with some
college but no degree would make $993,000. Associate degree re-
cipients would make about $1,062,000; bachelor's degree holders,
$1,421,000; master's degree holders, $1,619,000; doctorate degree
holders, $2,142,000; and persons with professional degrees,

This estimation method that the Census Bureau has used as-
sumes that 1992 earnings levels would stay in effect throughout
one's lifetime. But the reality is that the value of the dollar
changes over time. Recent history shows that the value of higher
levels of education has risen faster than lower levels.

Comparing 1975 returns to education to those in 1992, we see
that average earnings doubled for high school graduates; rose
about 2V2 times for those with a high school degree only; almost

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Online LibraryArts United States. Congress. Senate. Committee on LaboEducation's impact on economic competitiveness : hearing before the Subcommittee on Education, Arts, and Humanities of the Committee on Labor and Human Resources, United States Senate, One Hundred Fourth Congress, first session ... February 2, 1995 → online text (page 7 of 15)