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U.S. Education Is Getting Left Behind

The U.S. is now the only country in the industrialised world in which the generation entering the workforce does not have higher college attainment levels than the generation about to leave the workforce.
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The U.S. is now the only country in the industrialised world in which the generation entering the workforce does not have higher college attainment levels than the generation about to leave the workforce. In part, that is of course due to the traditionally high levels of college attainment in the U.S. It is simply much harder to move the frontier than to catch up with it. But it is also clear that an increasing number of countries have approached and surpassed U.S. graduation levels and others are bound to follow over the coming years. In 1995, the U.S. ranked second after New Zealand in terms of college graduation among 19 countries with comparable data. In 2010, it ranked 13th among 25 countries with comparable data. While the college graduation rate in the U.S. grew from 33 percent to 38 percent over this period, on average across OECD countries it virtually doubled, from 20 percent to 39 percent.

What is more troubling is that the odds of attaining a college degree are clearly stacked up against disadvantaged Americans. Of course, the U.S. is not alone in this. In every OECD country, the odds that a 20-34 year-old attends higher education increase with the educational attainment level of his or her parents. However, in the U.S. this relationship is far more pronounced than in many other countries. Only 29 percent of the children of parents without a high school degree obtain a college degree, compared with a OECD average of 44 percent. These odds are below every other OECD country except Canada and New Zealand. By contrast, the odds that a young person in the U.S. will be in higher education if his or her parents have a college degree are 158 percent.

The increasing impact of advanced skills on people's life chances -- whether it is employment, earnings or social participation, makes it a priority to do better in providing all talented students, regardless of their background, with access to advanced education.

Rising levels of tuition, already the highest in the industrialised world by a large margin, can make it harder for disadvantaged students to obtain a tertiary degree. Of course, social inequities in access to college education that result from a high financial burden on households need to be balanced against inequities that would have been the result of limited growth because of financial and capacity constraints. That may also explain why OECD data show no cross-country relationship between the level of tuition countries charge and the participation of disadvantaged youth in tertiary education.

But one reason why some countries do well with providing equitable college access despite charging high levels of tuition is that they provide universal and income-contingent loan systems for students. The loans reduce the liquidity constraints faced by individuals at the time of study while the income-contingent nature of the loans system addresses the risk and uncertainty faced by individuals (insurance against inability to repay) and improve the progressiveness of the overall system (lower public subsidy for graduates with higher private returns). In these systems the repayments of graduates correspond to a proportion of their earnings and low earners make low or no repayments and graduates with low lifetime earnings end up not repaying their loans in full. But even the best loan system is often not sufficient.

There is ample evidence that youth from low-income families or from families with poorly educated parents, but also youth who just don't have good information on the benefits of tertiary education, underestimate the net benefits of tertiary education. That is why many countries now complement their loan schemes with means-tested grants or tuition waivers for vulnerable groups. In some cases, these grants address the full extent the financial barriers students face in accessing tertiary education, by raising both the loan entitlement and the student grant to levels adequate to cover tuition and living costs.

Surely, those loan and grant systems cost money. But the costs are just a tiny fraction of the added fiscal income due to better educated individuals paying higher taxes.

But there is something else the U.S. needs to become better at if it wants to improve equitable access to college: The impact of students' social background on their learning outcomes at age 15, as measured by PISA in 2000, explained 37 percent of the between-country variation in the proportion of students from families with low levels of education who were enrolled in higher education in 2009. In other words, where countries do not succeed to moderate the impact of social background on success in school, they are unlikely to address the equity challenge in tertiary education. That is a much tougher policy challenge than figuring out the financing of higher education. But the outcomes from PISA show that it can be addressed. Whether it is Finland in Europe, Canada in North America or Japan or Korea in Asia, these countries achieve strong learning outcomes not just overall but also for their most disadvantaged students. The data also show that rapid improvement is possible. A major overhaul of Poland's school system helped to dramatically reduce performance variability among schools, turn around the lowest performing schools and raise overall performance by more than half a school year. Portugal was able to consolidate its fragmented school system and improve both overall performance and equity. And so did Chile, Germany and Hungary.

Those comparisons show what is possible in education. They take away excuses from those who are complacent. And they help to set meaningful targets in terms of measurable goals achieved by the world's educational leaders.

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