February 20, 2009

Molly Corbett Broad, President

The Federal Government and Higher Education: A Partnership for Economic Renewal

American Association of Presidents ofIndependent Colleges and Universities

2009 Annual Conference

Unemployment up 4.1 million this year to 11.6 million.

$12.6 trillion in wealth lost in 2008, consumption down by at least $600 billion.

Household debt in delinquency or default approaching $1 trillion.

New home sales down 63 percent since 2005.

It’s the Economy…

Sources: Bureau of Labor Statistics, Census Bureau, Moody’s Economy.com.

A Partnership for Economic RenewalA Partnership for Economic Renewal

• Development of

Human Capital

• Research and Modernization to

Solve National & Global Problems

Percentage of Adults with at Least an Associate Degree

3541

16

66

18

34 37

18

54

2124 24

0

20

40

60

80

Total Whites AfricanAmericans

Hispanics AsianAmericans

AmericanIndians

Younger Adults Aged 25 to 29Adults Aged 30 or Older

Source: American Council on Education, Minorities in Higher Education 2008.

Human Capital: A Strategic Asset at RiskHuman Capital: A Strategic Asset at Risk

A New Competitive LandscapeA New Competitive Landscape

India

•Population of 1.1 billion

•GDP rose by an average of 7% each year since 1997

China

•Population of 1.3 billion

•GDP grew 10x since 1978

Source: CIA World Factbook.

A New Competitive LandscapeA New Competitive LandscapePercentage of Young Adults with a Postsecondary Credential

26

9

28

30

0

10

20

30

40

50

60Ca

nada

Japa

n

Kore

a

Belg

ium

Irela

nd

Norw

ay

Denm

ark

Spai

n

Fran

ce

Unite

d St

ates

Aust

ralia

Finl

and

Baccalaureate & AboveSub-baccalaureate

Source: OECD, Education at a Glance 2007.

Essential Human CapitalEssential Human Capital

Low- & Middle-income Students

Veterans & Military Unemployed Workers

Helping Students and Families

Helping Students and Families

• College Cost Reduction and Affordability Act

• Ensuring Continued Access to Student Aid Act

• New G.I. Bill

• Higher Education Opportunity Act

• The American Recovery and Reinvestment Act

8

Helping Students and Families

Helping Students and Families

• Increase Pell Grants– $5,350 in 2009– $5,500 in 2010

• Increase Work-Study– $200 million

9

Helping Students and Families

Helping Students and Families

• American Opportunity Tax Credit

– Temporarily replaces Hope Tax Credit for two years

– $2,500 credit for four years

– Covers tuition & fees, books, and course materials

– Partially refundable

10

Helping Students and FamiliesHelping Students and Families

State Fiscal Stabilization Fund:$53.6 billion

• $39.5 billion to education – (K-12 and public colleges)

• $8.8 billion to Governors

• $5 billion reserved for Incentive Grants 

11

A Renewed Investment in ScienceA Renewed Investment in Science

“I have said over and over again, if you want to know the agenda for this new Congress, remember four words: science, science, science and science…We stand by this as the most important investment that we can make in health and education and energy independence, job creation and the defense of America.”

Nancy Pelosi, Speaker, US House of Representatives

R&D Investment is FlatR&D Investment is Flat

R&D as a Percentage of U.S. GDP: 1990 to 2007

0

0.5

1

1.5

2

2.5

3

1990 1992 1994 1996 1998 2000 2002 2004 2006

Federal Nonfederal

Source: National Science Foundation

Underinvestment in Key FieldsUnderinvestment in Key FieldsFederal Non-Defense Research Spending by Field

Health ($29.6), 52%

Space research & technology, ($9.2), 16%

Natural resources & environment ($2.0), 4%

Energy ($2.0), 4%

All other ($5.8), 10%

Gen'l science & basic research

($7.9), 14%

Source: National Science Foundation. FY08 spending in billions.

Research FundingResearch Funding

• National Science Foundation (NSF)– $3 billion

• National Institutes of Health (NIH)– $10 billion

• Department of Energy– $2 billion

• NASA– $1 billion

15

Research FacilitiesResearch Facilities

Federal Support for Academic R&D Facilities

$0

$250

$500

$750

$1,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Co

nst

ant

08 $

(m

illi

on

s)

Source: National Science Foundation.

What it MeansWhat it Means

• Different approach

• Lots of money

• Short-term stimulus

• Change in financing

• Government grows bigger

17

A Partnership for Economic RenewalA Partnership for Economic Renewal

• Development of

Human Capital

• Research and Modernization to

Solve National & Global Problems