Reconstructing higher education: operating a public system of colleges and universities with less money may require a fundamental redesign.

• Author: Colvin, Richard Lee
• Position: SPECIAL REPORT

We have long been proud of our colleges and universities, and rightly so.

During the 20th century, the United States created the model of the modern research university that became the envy of the world. We invented the community college and built systems of high quality, low-cost public institutions that made higher education accessible to soldiers returning from the war, baby boomers, low-income students, immigrants and racial minorities.

Twenty years ago, the nation topped the world in the percentage of adults age 25 to 34 with college degrees. Our elementary and secondary schools might have been cause for concern but, with students from around the world wanting to enroll, our colleges and universities were above reproach.

No longer. Today, the United States ranks 10th among developed nations in the percentage of young workers holding a postsecondary credential or degree. It's not that today's young people are less educated than their elders. Rather, it's that other nations are doing all they can to boost college participation and attainment and have surpassed the United States.

President Obama--backed by leading foundations, many economists, other politicians and education experts--argues the nation's long-term economic competitiveness depends in large measure on increasing the percentage of the American workforce holding postsecondary credentials or degrees.

But the recession battered the public purse as well as private pocketbooks. Public colleges and

universities, which educate the vast majority of Americans, will have to take on the president's historic challenge with no near-term prospects of large revenue increases.

State appropriations per student fell in 30 states between 2005 and 2010, according to a report by the State Higher Education Executive Officers. Tuition increases covered the loss of state funds in only 12 of those states, leaving the higher education systems in 18 states with less revenue overall. Higher education was spared from much deeper cuts in 2010 thanks to extra funds provided through the federal American Recovery and Reinvestment Act. ARRA funds, however, are running out and fiscal year 2012 is expected to be much worse.

Pennsylvania Governor Tom Corbett, for example, wants to slash support for his state's higher education system by $271 million or 54 percent even though a consulting company hired last year to find efficiencies identified only $1.5 million in potential cost savings.

"Without sitting down--almost with a blank piece of paper and saying we start over again, there's not much left on the efficiency side," says John Cavanaugh, the system's chancellor.

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Other hard-hit states include Oregon, Washington and Georgia, which raised tuition for University of Georgia students by 46 percent over the past two years. Georgia also is restricting its popular Hope Scholarship program, which covers tuition and fees, to only the most highly accomplished high school graduates. The Center on Budget Priorities, a liberal Washington, D.C., policy research organization, projects that at least 17 states are considering "large...