The Future of Higher Education in Texas

Woody L. Hunt Chairman

Higher Education Strategic Planning Committee

Let’s talk about higher education in Texas and the educational competitiveness of the

Texas work force

• Where do we stand in terms of the educational attainment of our workforce?

• Why is it so important to our state?

• What can we do to “raise the bar”?

CLOSING THE GAPS ANNUAL DEGREE COMPLETION MORE THAN DOUBLED FROM 2000 to 2014

IN 2000, ESTABLISHED A GOAL OF

163,000 ANNUAL POSTSECONDARY

CREDENTIALS BY 2015

THAT GOAL WAS ACHIEVED

IN 2011

246,499 IN 2014

*THE GOAL WAS LATER INCREASED TO 210,000 TO REFLECT INCREASE IN POPULATION

2000 2011 2006 2003 2009 2014 2015

ACTUALS 116,235 221,538 132,478 155,527 188,927 246,499

Texas’ healthy business environment has become a major contributor to our educational attainment goals

4

TEXAS HAS BENEFITED FROM IMPORTING COLLEGE-EDUCATED RESIDENTS

13,462

53,476

28,880

0

10000

20000

30000

40000

50000

60000

Associates Bachelor's GraduateSource: U.S. Census Bureau; ACS Public Use Microdata Sample (PUMS) Files

NET ANNUAL MIGRATION BY DEGREE LEVEL - 22-64 YEAR OLDS AVERAGE FROM 2011 - 2013

NET ANNUAL IMPORTS

95,818 WITH POSTSECONDARY

ATTAINMENT

201,530 TOTAL

NET ANNUAL IMPORTS

5

Closing the Gaps by 2015’S goals seemed bold at the time and helped bring Texas on par with comparable states. International data on attainment levels, however, suggests that the bar was set too low.

Far too low.

6

7

Source: Education at a Glance 2014, OECD Indicators and American Communities Survey Public Use Microdata Sample 2013

TEXAS IS LOSING GROUND Percent of adults with an associate degree or higher.

TEXAS IS LOSING GROUND

RANK

5th IN THE WORLD

EDUCATIONAL ATTAINMENT ASSOCIATE OR HIGHER

TEXANS 55-64 YEARS OLD

RANK

25TH IN THE WORLD

EDUCATIONAL ATTAINMENT ASSOCIATE OR HIGHER

Texas attainment levels have stayed relatively steady, but in a global economy, staying steady = falling behind

TEXANS 25-34 YEARS OLD

8

Source: OECD, Education at a Glance 2014 (for 2012);

U.S. Census Bureau, 2013 American Community Survey One-Year Public Use Microdata Sample File

COMPARING TEXAS WITH NATIONS AND OTHER STATES

PERCENTAGE OF YOUNG ADULT DEGREE ATTAINMENT - (AGES 25-34)

TEXAS IS LOSING GROUND

9

11

OUR FUTURE WORKFORCE

Our future workforce will demand even more postsecondary trained and educated workers.

IN 1973 ONLY 28% OF ALL U.S. JOBS REQUIRED

POSTSECONDARY EDUCATION/SKILLS

BY 2020 65% OF ALL NEW JOBS WILL REQUIRE

POSTSECONDARY EDUCATION/SKILLS

Currently, 35% of Texans aged 25-34 have an associate degree or higher. 10

11

SIGNIFICANT WORK REMAINS TO ENSURE TEXAS SUSTAINS PROGRESS

• Texas is doing better but falling farther behind

• It is an urgent matter that Texas increase the knowledge and skills of its workforce to globally competitive standards

• Failure to do so will have serious economic consequences for both the

state and its citizens

11

12

SIGNIFICANT WORK REMAINS TO ENSURE TEXAS SUSTAINS PROGRESS

• We must be much more aggressive in our expectations and our policies – incrementalism is not a solution

o Benchmark against global best performance o Be much more strategic in

• Increasing capacity to deliver instruction • Investing public resources

• As largest donor and regulator, the state’s role is central in laying

out educational goals for our state workforce and our public institutions

• In setting goals, the state must prioritize completion

12

The Relationship Between Educational Attainment, Personal Income, and the State New Economy Index (2012)

AL

AK AZ

AR

CA

CO CT

DE FL GA

HI

ID

IL

IN

IA KS

KY

LA

ME

MD

MA

MI

MN

MS

MO

MT

NE

NV

NH NJ

NM

NY

NC

ND

OH

OK

OR PA

RI

SC

SD

TN TX

UT

VT VA

WA

WV

WI

WY

US

20

27

34

41

48

55

30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000

High College Attainment, Low Personal Income High College Attainment, High Personal Income

Low College Attainment, Low Personal Income Low College Attainment, High Personal Income

Perc

ent o

f Adu

lts 2

5 to

64

with

Col

lege

Deg

rees

(2

012)

Personal Income per Capita (2013) Source: U.S. Census Bureau, American Community Survey; Bureau of Economic Analysis; ITIF 2012 New Economy Index

State New Economy Index 2012 Top Tier

Middle Tier Bottom Tier

13

Texas Personal Income per Capita as a Percent of the U.S. Average (1980-2012)

Source: Bureau of Economic Analysis

97.8 96.4

89.2 90.6

94.0 93.6 94.5 95.0 97.8

80

90

100

110

1980 1985 1990 1995 2000 2005 2010 2011 2012

14

Texas must sustain educational progress. Barrier #1: Demographics

15

59.8

37.3

4.5

0

10

20

30

40

50

60

70

Texa

sN

ew M

exic

oC

alifo

rnia

Flor

ida

Nev

ada

Mis

siss

ippi

Geo

rgia

Ariz

ona

Mar

ylan

dLo

uisi

ana

Sout

h C

arol

ina

New

Yor

kIll

inoi

sN

ew J

erse

yD

elaw

are

Nor

th C

arol

ina

Nat

ion

Alab

ama

Col

orad

oVi

rgin

iaC

onne

ctic

utAr

kans

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nnes

see

Rho

de Is

land

Mic

higa

nM

assa

chus

etts

Kans

asW

ashi

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nnsy

lvan

iaO

klah

oma

Ore

gon

Neb

rask

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dian

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hio

Mis

sour

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isco

nsin

Haw

aii

Idah

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tah

Min

neso

taW

yom

ing

Kent

ucky

Iow

aAl

aska

Sout

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akot

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orth

Dak

ota

New

Ham

pshi

reW

est V

irgin

iaM

onta

naM

aine

Verm

ont

Source: U.S. Census Bureau 2013 State Population Estimates

PERCENT OF 0-24 YEAR-OLDS IN U.S. WHO ARE BLACK OR HISPANIC (2013)

16

Source: Texas Data Center; U.S. Census Bureau, National Center for Education Statistics

43.9% 38.8%

11.5% 5.8%

30.0%

51.3%

12.7% 6.0%

0%

10%

20%

30%

40%

50%

60%

White Hispanic Black Other

Total Population 2013 Public Elementary and Secondary Students 2012-13

TEXAS POPULATION DISTRIBUTION BY RACE/ETHNICITY (TOTAL AND K-12)

17

Source: U.S. Census Bureau, 2011-13 American Community Survey (ACS) Public Use Microdata Sample (PUMS) File

DIFFERENCE IN COLLEGE ATTAINMENT BETWEEN WHITES AND MINORITIES IN U.S.

18

Whites Black Hispanic

Underrepresented Minorities

(Black, Hispanic, American Indian, Alaska Native)

Attainment Attainment Difference Attainment Difference Attainment Difference

Texas 45.6% 30.0% 15.6% 18.0% 27.6% 21.1% 24.5

U.S. 44.5% 28.1% 16.4% 20.3% 24.2% 23.7% 20.8

SOURCE: Texas Higher Education Coordinating Board

PERCENTAGE OF 2004 8TH GRADERS WHO EARNED POSTSECONDARY CREDENTIAL WITHIN 6 YEARS OF HIGH SCHOOL GRADUATION

7

HISPANICS

13.2% AFRICAN AM.

12.5% WHITE

28.7% ECONOMICALLY

DISADVANTAGED

10.4%

STATEWIDE

20.3%

ATTAINMENT REMAINS LOW

Despite more postsecondary completions, attainment among Hispanics, African Americans, and poor students remains low 19

RACE/ETHNICITY DISTRIBUTION OF PROJECTED WORKING AGE TEXAS POPULATION - 25 TO 34 YEAR OLDS

20

Hispanic 43%

White 39%

African American

12% Other

6%

2015

Hispanic 52%

White 29%

African American

11% Other

8%

2030

25 to 34 Year Olds 2015 2030

Hispanic 1,644,627 2,323,615 41%

White 1,463,893 1,314,723 -10%

African American 445,875 496,710 11%

Other 245,307 349,304 42%

Total 3,799,702 4,484,352 18%

BY AGE AND RACE/ETHNICITY, 2010-2030

Source: Texas State Data Center, Office of the State Demographer

(19,448)

(96,448)

(202,298)

(520,195)

1,291,243

52,947

22,506

157,802

182,325

356,570

1,191,767

512,100

1,445,090

1,433,719

1,062,750

(750,000)

(500,000)

(250,000)

-

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

Age 0-17 Age 18-24 Age 25-44 Age 25-64 Age 65+

White African American Hispanic / Latino

PROJECTED CHANGE IN TEXAS POPULATION

21

Texas must sustain educational progress. Barrier #2: Economics

22

Source: US Census Bureau: American Community Survey

16.1 19.4

29.1

35.4

42

24.1 21.4

12.5

42.3

27.9

20

9.8

0

5

10

15

20

25

30

35

40

45

Lowest Second Third Highest

White Non-Hispanic Black Non-Hispanic Hispanic

Per

cent

PERCENT OF TEXAS FAMILIES WITH CHILDREN 17 AND YOUNGER BY INCOME QUARTILE, 2012

INCOME

23

THE CONSEQUENCES OF INACTION

24

2030 PROJECTED CHANGE IN EDUCATIONAL ATTAINMENT OF POPULATION, AGES 25-64 SAME ATTAINMENT RATES BY RACE/ETHNICITY ASSUMED

17.4

24.7 23.4

7.1

18.5

8.9

21.0

25.1

22.4

6.6

16.9

8.0

0

5

10

15

20

25

30

Less than High School High School or GED Some College, NoDegree

Associates Degree Bachelor's Degree Graduate orProfessional

2012 2030

Sources: Texas State Data Center Population Projections. U.S. Census Bureau, 2012 American Community Survey and 2010-12 American Community Survey Three-Year PUMS.

EDUCATIONAL ATTAINMENT WILL DROP IF CURRENT PROGRESS DOES NOT ACCELERATE

25

PROJECTED CHANGE IN PERSONAL INCOME PER CAPITA BY 25 TO 64 WITH SAME ATTAINMENT RATES BY RACE/ETHNICITY

Sources: Texas State Data Center Population Projections. U.S. Census Bureau, 2012 ACS and 2010-12 ACS Three-Year PUMS.

$40,066 $37,147

2012 2030

PERSONAL INCOME WILL DROP IF EDUCATIONAL ATTAINMENT RATES DO NOT IMPROVE

26

CHANGES AS A RESULT OF NOT IMPROVING EDUCATIONAL ATTAINMENT AMONG BLACK AND HISPANICS - YEAR 2030 ESTIMATES

Sources: Texas State Data Center, 2009 American Community Survey (PUMS), 2008-10 Current Population Survey (PUMS)

-690,727,473

-1,335,450,668

575,664,605

254,512,050

-1,500,000,000

-1,000,000,000

-500,000,000

0

500,000,000

1,000,000,000

State Income TaxRevenues

Sales Tax Revenues Property Tax Revenues Medicaid Expenditures Corrections Expenditures

WITHOUT IMPROVEMENTS, STATE REVENUES WILL DECLINE AND EXPENDITURES WILL INCREASE

27

GLIMPSE INTO THE FUTURE: THE HISTORY OF EL PASO

28

MEDIAN FAMILY INCOME AND EDUCATION ATTAINMENT 1950 TO 2012, EL PASO RELATIVE TO TEXAS

Sources: Christine Thurlow Brenner (2001), Educational Trends and Income in El Paso: A Longitudinal Perspective, University of Texas at El Paso, Institute for Policy and Economic Development. 2008, 2009 American Community Survey.

40

50

60

70

80

90

100

110

120

130

1950 1960 1970 1980 1990 2000 2008 2009 2010 2011 2012

Median Family Income Adults with High School Diploma Adults with 4+ Years of College

FAMILY INCOME

29

EL PASO EDUCATIONAL ATTAINMENT BY RACE (25-64 YEARS) ASSOCIATES DEGREE AND HIGHER (%)

48.5

40.8

57.7

25.8 30.2

46.0

30.8

64.5

18.4

35.2

45.1

28.7

60.6

20.9

40.0

0

10

20

30

40

50

60

70

White Black Asian Hispanic Total

El Paso County Texas U.S.

Source: U.S. Census Bureau, 2012, 2013, and 2014 American Community Survey One-Year Public Use Microdata Samples.

EL PASO EDUCATIONAL ATTAINMENT

30

• Raise education attainment levels to meet or exceed our competitors

• Shrink disparities across race and ethnic groups

• Get more students into high-demand technical fields

• Improve skills of adult population by bringing them back into the education system

13

TEXAS MUST ADDRESS CHALLENGES TO MAINTAIN A GLOBALLY COMPETITIVE WORKFORCE

32

THESE CHALLENGES ARE BEING ADDRESSED BY THE TEXAS HIGHER EDUCATION COORDINATING BOARD’S NEW STRATEGIC PLAN:

33 By 2030, at least 60 percent of Texans ages 25-34 will have a certificate or degree.

60x30TX Builds on Past Achievements

60x30TX Includes Four Student-Centered Goals

60x30 By 2030, at least 60 percent of Texans ages 25-34 will have a postsecondary credential or degree.

Achieving the 60x30 goal is critical for Texas to remain globally competitive and for its people and communities to prosper.

COMPLETION Goal: By 2030, at least 550,000 students in that year will complete a certificate, associate, bachelor’s, or master’s from an institution of higher education in Texas.

If reached, Texas will award a total of 6.4 million certificates or degrees during the 15 years of this plan.

MARKETABLE SKILLS Goal: By 2030, all graduates from Texas public institutions of higher education will have completed programs with identified marketable skills.

What is a marketable skill? Students exit from any degree program with a variety of skills.

Marketable skills include interpersonal, cognitive, and applied skill areas, are valued by employers, and are primary or complementary to a major.

STUDENT DEBT Goal: By 2030, undergraduate student loan debt will not exceed 60 percent of first-year wages for graduates of Texas public institutions.

K-12 Initiatives

• Cooperation/collaboration between K-12 and higher education

• College/career readiness standards • Teach preparation and professional

development • Local and statewide faculty collaborations

Transitions

Source: THECB, TEA and NSC, 12/31/2014. Texas Public Higher Education Almanac 2015.

Workforce Need Projections

Texas’ Economic Future Requires More Postsecondary Trained/Educated Workers

- In 1973, 28% of all U.S. jobs required

postsecondary education/skills. - By 2020, 65% of all new jobs will require this

level of education.

- Currently, 35% of Texans aged 25-34 have an associate degree or higher.

Source: Georgetown Center on Education and the Workforce.