How States Can Meet the Moment In Higher Ed

Relevant Links

2025 Strada State Opportunity Index

Strada Education Foundation 

2025 Grapevine Report

State Higher Education Executive Officers Association

Transcript

Jeff Selingo

So, Michael, there's a lot of turmoil right now between the feds and higher ed. And perhaps, as we've discussed, might change higher ed permanently. 

But they aren't the only governmental entities with an interest at the table of higher ed, of course.

Michael Horn

Yeah. That's exactly right, Jeff. And states obviously invest lots of money into colleges, universities, workforce training, and they have a significant interest in the vitality of the postsecondary sector. So in this episode of Future U we're gonna dig into the recent release of the State Opportunity Index, a guide to measuring state progress in connecting education with opportunity.

Sponsor

Strada Education Foundation is focused on one goal: Helping clear the path between education and work, especially for those with the most standing in their way. Learn more at strada.org. Subscribe to Future U wherever you get your podcasts. And if you enjoy the show, share it with your friends so others can discover the conversations we're having about higher education.

Jeff Selingo

I'm Jeff Selingo. 

Michael Horn

And I'm Michael Horn. 

Jeff Selingo

So, Michael, Strada Education Foundation, which is a sponsor of this podcast, recently released its State Opportunity Index, which we're gonna link to in the show notes. And it's a nice deep dive into how each state is doing on five key indicators. And this was really interesting to me because, as you know, I cut my teeth as a reporter in the late 1990s as a state reporter at The Chronicle of Higher Education. 

There were three of us who covered the states. We essentially divided them up. Twice a year, we would do this really comprehensive look at what states were doing. In December, we would look at the year ahead. What was called a "legislative preview." So I loved it because we divided up the states. We'd have to call them up and figure out what were the big bills affecting higher ed and what was the budget outlook for higher ed. And then in August, we would kinda do a review with the Almanac of Higher Education. So it gave us a sense of really what was happening in all 50 states around higher ed. 

And there are two things that I really learned from that time of covering the states for The Chronicle. 

One was how uneven policy and spending was. Right? Like, the Northeast was very big at giving aid to private colleges. Right? They're among the only states that would give direct aid to private colleges and  universities because, of course, they had so many of them. The Midwest was huge on aid to students, while the West was big on spending a lot on their public institutions, which as you know, for a while many of them were free. 

And then the second thing was how ideas that started in one state spread to other states. And this was, you know, well before the time when we had these, you know, vast interest groups who were essentially writing legislation, and then they would provide them to different states. It was really one state deciding to do something and then other states feeling like they were in competition, and so they had to kind of compete on that front. And so we're gonna come back to this idea in the second half of this episode. 

But the question to me is, is there a time for that to happen again where states can take the lead given what's happening at the federal government level right now with higher ed.

Michael Horn

Yeah. And Jeff I'm glad that we're having this conversation right now, frankly, because out of this index that Strada released, they have five keys that they say, quote, will improve employment outcomes for learners and employers alike. And so we're gonna talk more about our take on this in the second half. 

But let's lay out the five that they have highlighted. First is clear outcomes. Second is quality coaching. Third is affordability. Fourth is work-based learning. Fifth is employer alignment. 

I'll just note quickly, Jeff. Those five I don't think were on the menu in the 1990s when you were having these conversations, so it is interesting to watch the evolution in states leaning into these and measuring now and the entity measuring states against these. 

And then Strada, for the metrics, they've attached to each of those five categories, basically to rank each state as, are you leading, are you advanced, are you developing, or foundational? And the goal of  improving on these keys is so that states can boost the numbers of individuals in their state that have a positive ROI from their postsecondary education experience within 10 years of completing their degree. And the report has a ranking for that too, where they show the percentage of students in each state that is currently achieving or has achieved that positive ROI. 

So there's a lot in the report, Jeff.

Jeff Selingo

Yeah. And to help us kind of with some of the highlights from the report, but also to give us a little bit of a broader context of this moment — and kind of the imperative for states at this moment — we're gonna have Ruth Watkins join us here now from Strada. 

She's president of postsecondary education there. Before that, and this is important context for her, she was president of the University of Utah, where both degree completion rates and research funding increased under her watch. And so she was there as an institutional leader at a public university. 

So she brings an interesting level of context to this conversation today. So we're really excited to have Ruth with us. 

And so welcome, Ruth, to Future U.

Ruth Watkins

Thank you so much. It's wonderful to be with you.

Jeff Selingo

So, Ruth, Strada just released the State Opportunity Index, and you found in that, not surprisingly, that states are kind of unequal in linking education to employment. I know I, for one, would like to see states lead at this moment when the federal government's role in higher ed is a little bit unclear at best, I guess we could describe that. But given what you see, both from leading at public institutions in Illinois and Utah and now with your work at Strada with this index, is that asking for too much to have the states take a greater lead?

Ruth Watkins

Absolutely not. I think we see a lot of interest from states, a lot of relevance to states, and just incredible energy and enthusiasm for some guidance on what they can do to strengthen the connection between education and opportunity for their students and meet the needs of their employers.

Michael Horn

So, Ruth, I wanna dig in on this a little bit because I'm curious about, like, the leverage and pressure on that. Right? Just to take the K-12 analogy. Right? We saw, you know, a lot of states leading, but a lot of states not. That led to No Child Left Behind sort of putting pressure on all states. Then moving forward and then waivers and release. And now we see, yes, Mississippi is rising, but a lot of states are sort of all over the place. Can they do it without the federal government sort of being at the wheel? You know, how do we help states make the case that this is good for them, good for higher ed without a federal role?

Ruth Watkins

So I think we see a lot of interest and effort from states, and I wouldn't phrase it as without a federal role. Of course, the federal role will continue to play an important foundational role and an effort over time. 

I do think states in many ways are uniquely well positioned to take some of the key actions that better link what their industry's needs are and how their students are prepared because, of course, there is some variability across, and there is keen interest in the regions and within a state. So, I think it's probably best thinking, considered as a “both and” effort rather than a “this or this,” and I believe that will continue to be vital.

Jeff Selingo

Does it also, though, create some competition, which might be good? 

You know, I recall in the late 1990s, Ruth, when states, specifically in the South, were competing to keep their best students at in-state colleges and universities. And so merit-based scholarships became, like, the big thing — like George's Hope Scholarship, which really started it. Now, you know, I think people in higher ed will disagree, and they could disagree whether that was good policy. But what I was interested in at that time was that it did create this kind of competition among the states. 

Does something like the State Opportunity Index kind of create some competition for states to do better, do you think?

Ruth Watkins

I do think so. Now whether you frame that as competitive or 'us versus us' is an interesting, you know, question. I think what states are seeking to do is help more of their students realize a return on their educational investment after high school. And the state opportunity index provides five keys to delivering on that. When we look across the country, there is variability in states. Some of them are strong in certain areas. Some of them are strong in other areas. So there are ways for every state to both look at their strengths and examine their ways to improve. So I think the majority of this is a state saying, 'Where do we stand? and 'What do we want to do? And what investments do we wanna make?' Now a little healthy competition, you and I both know, I think, Jeff, that can be kind of a motivating force. It certainly is when you're leading an institution and you're comparing yourself to others. So, of course, that's out there, not the primary purpose, however.

Jeff Selingo

Okay. So can you give us an example then of a state that is stepping up in this moment or is well placed for the kind of or is, you know, well placed for the kind of changes that you're talking about?

Ruth Watkins

So I'll give you several. And I think this part is important because when we look at those sort of five keys to a state delivering better on their return on investment for their individuals, their learners, their students, and their families, we see various patterns. 

So for example, if we take work-based learning, the goal that every student should be able to access a work-based learning experience to strengthen their education and help them path to an employer, we will see that there are a couple of states, Iowa and Pennsylvania, where more than half of their postsecondary students are gaining a work-based learning experience, with Indiana and Virginia not too far behind. So we see an interesting pattern with those four states, and there are things they've done to invest and create those opportunities for their learners and draw attention in that way. 

We begin to see states starting to talk and think about setting a goal for work-based learning. And those kind of actions, I think the investments that states can make in an area, are the things that drive this forward. 

Now if you look at something like affordability, another key, we see an interesting pattern where community colleges are affordable, relatively affordable in virtually every state. Very few four-year institutions are leading in affordability, and very few states are leading the way. But if you look at Florida and California, two very different states in terms of their context, but there are strengths in what they're doing in affordability, that have to do with how the state has invested and where they're using their resources. 

One other note on affordability. I would say, every state has room to improve on timely completion, which is a crucial way to make education more affordable. 

So the complexity of this pattern is, you see some strengths in certain areas, some challenges in others, but you can also begin to develop some understanding of, ‘What are states doing, and how are they creating a road map to do better?’ So perhaps that's the most useful part of the State Opportunity Index. 

There are this year some case studies and some examples that are being pulled out that help states know how they can improve.

Michael Horn

Two questions that I'm curious out of that, Ruth. And so they both have to do with what you just said around improving essentially the return on investment part to the student. 

The first, let's go to the community college aspect of that since you named it is, 'Hey, most community colleges, they have low tuition.' But something interesting in the research is that just because you have low tuition doesn't necessarily mean the community college degree will pay off economically. And you have some examples of different states where that's the case. Can you just sort of help us understand why that would be and why it's more than just looking at the tuition figure?

Ruth Watkins

Yes. I think you just made a great case, Michael, for why you need to look across all five keys to success for driving ROI. Because, of course, we can imagine that there are things in the world that are quite affordable that don't deliver the quality, the durability, the outcome that we were seeking. So while affordability is one of the five keys, we need to think about how it pairs with the other areas. 

For example, we think quite a lot in this index about alignment to employers. How is the preparation that's happening, the degrees that are awarded, the credentials that are earned connected to the needs of industry. And I think it's important to remember in that question that our interest is the well-being of the student and the outcome the student achieves. 

Of course, employers and industries in a region play a key role in that and also in creating a healthy economy around a student. So looking at alignment to employers, that is, underemployment in a state and also the extent to which a state is meeting their supply and demand. There's some very interesting patterns. 

And Jeff mentioned this earlier, my own interest in Utah and the time I spent there. Utah does quite well in supply/demand and a lower underemployment, although there's certainly room to improve. I was interested when we found that and also interested to look at a recent report by the Utah System of Higher Ed where they pulled out what are the top five degrees in terms of number that the state has produced in recent years with the number one was nursing, which surprised me a little bit. Nursing, computing, both appeared in the top five. And those, of course, those degrees are happening across the community colleges, Salt Lake Community College up through the four year institutions, all of them playing a role. 

And that kind of alignment to, ‘Where are the needs?’ is a crucial indicator when we think about community colleges and four-year institutions alike.

Michael Horn

It's super interesting because a lot of that that you just presented is in the school's control or the state's control in the sense of let's make sure we're offering the right degrees for the right opportunities. 

Are there cases like, I think Mississippi or other places where the macro environment is such that the jobs maybe just aren't there with the return, and the colleges are a little bit more constrained perhaps in terms of being able to offer choices that will have that, ROI for students, or is that the wrong way to look at it? 

Do they still have more, perhaps, agency in offering degrees that will have that positive ROI?

Ruth Watkins

You know, I'd say a little bit of yes and no, Michael. I think, you know, there is plenty of room to do better, and there also are macroeconomic conditions that are influential. 

And at the same time, I think you want to imagine the majority of students — and, this is always an educational point for me as a person who spent most of their life in a flagship — are not those students. They're students who are going to go to school very near where they live, and they are going to live in a similar region after they complete. 

So I think the opportunity to link more towards, 'Where are the employment demands and how do we prepare people for that?' If it would be alright with you, I'd love to just say a word about that too.

Michael Horn

Please. Yeah.

Ruth Watkins

And that falls a little bit under our data systems because you have to have the labor market information to provide that kind of guidance. 

Many institutions and states tell us they're not as far along on that as they would like to be, but we see quite good progress in states on what is in the State Opportunity Index called clear outcomes. As I think about my old roles in higher ed, I would think about that as having the information we need to provide choice for our students that is an informed choice, so they can make informed decisions. That particular area is something we have called 'quality coaching,' and I want to be sure to be clear here that we are not saying that every single student needs to be an engineer, a computer scientist, or a nurse. I think that will not lead to the healthy world we're hoping for. But I think what we are saying is that we want every student at the beginning of a program to make an informed decision and to know what completers of that program are doing one year out, five years out, ten years out — where they work and what they earn. 

In many ways, I've started to think of this as what your tuition dollar should buy you. Your tuition dollar should buy you that information so you can make the choice that will work for your life. And it isn't probably a one and done either. It isn't like we can do this at the very beginning of a program, check a box, and we've done our part. I think where college can be better is to think about providing that information at multiple points in a student's experience so they can have that supportive guidance that includes labor market information and alumni outcomes to make the choices that will work best for their lives.

Jeff Selingo

Ruth, how do you want states to use this index, and who should use it? Is it the governor's office? Is it the legislature? Is it the education department? Is it economic development? Like, is it state higher education policy boards? Like, who should use it and how?

Ruth Watkins

You know, yes, yes, yes, and yes. Great question, Jeff. And I was just talking to a group where an interesting question along this line came up, where a hand went up, and the person said to me, ‘So who really calls the shots in a state? Who makes the decision? How do we get this done?’ And interestingly, all of those actors will be relevant in this change. 

Now there may be some that have a closer position to the action than others. I would say, without too much question, I would see huge opportunities with the State Opportunity Index for what we call the SHEOs, the State Higher Ed Executive Officers. Of course, state higher ed systems, that is not directly where students are served. So those SHEOs need to engage with the institutions and the institution leaders. But the SHEOs have some capacity to set conditions that drive institutional behavior. So definitely SHEOs. 

Now, they can't do it without the employer perspective and the employer voice. So we need that perspective of workforce, economic development, chamber of commerce, a variety of actors there. 

So it is complex, and I would say there's a handful of folks in any state that will be crucial to move this from idea to action. 

We all want a return on investment for our students. Now how are we going to change in order to deliver better against that?

Michael Horn

Ruth, I love what you're saying here. It echoes a lot of what I've been seeing as well across a bunch of states and the movement also toward clear outcomes connecting data systems so we can even see these things in the first place. 

It raises one other thing I'm curious around, as we think of ROI, which is a lot of the conversation has to do with ROI to the student. But there's also ROI to the state, right, and where it's making its investments and so forth. And as we know, states often are subsidizing certain degree programs, which can therefore can look like a positive ROI to the student. 

But do we know if it's a positive ROI for the state, if that makes sense? How do you all think about factoring that in or helping states with allocation of those dollars?

Ruth Watkins

You know, what a great question, I think, Michael, because that is important. 

And, my own experience talking to legislators who also play a pretty important role in all of this, is that that's gonna be the very first question they ask you. You, university leader, institution leader, state SHEO, are asking us for this. How do we know that investment will pay off for the citizens of this state as a whole? 

And I think it is an essential question and one to say, if we are not able to meet the needs of our industries in terms of talent and workforce to allow industry to thrive, how will we drive forward economic development more broadly? 

I know my best examples of this were in Utah, where the state a number of years ago, maybe twenty years ago, invested in something called the 'engineering initiative.' And industry leaders were part of the ask to the state when those requested funds were made. And that it's an interesting program in that, as an institutional leader, to access and use those funds, we had to ... It was a wonderful supportive benefit, but I needed to match the state's investment — to some extent at the time I was a provost — by reallocating internal to the university in order to be able to invest in engineering, faculty, labs, equipment, space, the things that would allow us to increase enrollment in engineering. A pretty effective program over time. 

I think another point to your question is health industries. And we're seeing this in a lot of places around the country, and I certainly saw it in Utah, were willing to make investments in the state higher ed system in order to ensure that they had the talent and workforce they need to thrive in the region. 

So it is a vital question, and I think it is a place where industries stand up with institutions and higher ed systems to advocate for the right kind of investments.

Jeff Selingo

Okay. Well, Ruth, we can't let you out of here without talking about AI because it seems AI is on everybody's mind right now. 

We recently did an episode on AI and how that could shake up higher ed because we're seeing signs that generative AI is leading to big changes in the job market, especially for jobs that new college graduates are used to getting. 

So what can states do to deal with just how fast things seem to be changing even as they're trying to connect graduates to employment? I mean, we're trying to move big ships here at the same time that the sea is moving pretty quickly.

Ruth Watkins

So I'm just gonna guess, Jeff and Michael, that you might be a lot better qualified to answer that question than I am. But I'm gonna give you a couple of thoughts.

We just came through a board retreat where we had a panel of employers and leaders from around the country, and we had the chance to ask them a lot of questions about AI and the workforce and the future. And if I could kind of boil down a couple key points they made to us, I would say…

First, every single student that is coming through a program of education needs to know how to effectively use AI to assist in and support their work. So it does tell us something about how we prepare students across the entire spectrum of preparation. None of them were particularly forecasting loss of massive amounts of jobs, but what they were telling us, and this part I particularly loved as a person with a lot of history, and I was a dean of liberal arts and sciences here at University of Illinois some while ago. And what every one of those panelists — AI users and experts, and seeing it impact their industry — told us is that the durable higher order capabilities are more important than they have ever been, and that institutions must continue to think about how we prepare people to think, solve problems, write, work with people from around the world, develop, and sell products to people from around the world in order to be successful in the future of work. 

So I think what you see is a pretty nuanced message that those higher order capabilities are gonna be more important than they've ever been. And everybody needs to be prepared with understanding how to use AI in the way they perform their work.

Jeff Selingo

Yeah. I think it's just gonna complicate things a lot more for colleges and universities and states and maybe open up new opportunities as well. 

So Ruth Watkins, thank you so much for joining us on Future U, and we'll be right back after this message.

Sponsor

Opening the door to education after high school isn't enough. For too many young people, that moment is one of uncertainty rather than hope. The 2025 State Opportunity Index from Strada Education Foundation confirms this urgency. While a college degree usually delivers on the promise of economic security, 30% of college graduates are not seeing a positive ROI. Meanwhile, employers can't find the talent they need. We can do better. The state opportunity index lays out five key strategies to close the gap and offers a framework to help policymakers and education leaders strengthen the link between education and opportunity. Learn more at Strada.org.  

Michael Horn

Welcome back to Future U after a terrific conversation with Ruth Watkins from Strada about their state opportunity index report. 

And, Jeff, you teased it upfront, but let's dive in now. Why is this topic so important from your perspective right now?

Jeff Selingo

Well, Michael, let's start with some numbers, right, for some context here. A $129-billion with a “b,” fiscal year 2025. That's how much states spent on higher education according to what's often referred to as the Grapevine Report. It's put out each year by the State Higher Education Executive Officers Association, or SHEO. This is the fourth year, by the way, that it topped a $100-billion. So there is a lot of investment there, and I think that's an important point to make to start off the bat. I think states have a lot of skin in this game. Right?

Michael Horn

Yeah. It's interesting. Right? 

And it's actually pretty balanced with the feds. Right? The federal government puts in somewhere between a $170-$180 billion. Sixty billion or so of that is in research funding. A hundred and twenty or so in student aid — so loans, grants, work study, and so forth. So you said $129 billion, with $120 billion in student aid from the federal government, roughly 60 or so, in research. We all know that could change at the moment and is a little bit up in the air. But, just to give a sense, both are pretty big partners at the table, if you will, out of $700 or so billion in spend across the country.

Jeff Selingo

Right. 

And I think the other thing to think about here is that of that $129.1 billion, some of it even this past year was still a little bit of the leftover stimulus money from COVID. 

And in fact, since 2020, according to Grapevine, $10 billion of that state money was actually federal stimulus money. So some of that federal money flowed down to the states and probably wasn't tracked in your numbers. 

And I think that's part of the problem here is that there are boom and bust cycles in higher ed, and, you know, we might be about to go into another bust. 

You know, when budgets are tight — and that may happen now in the states with them having to pick up more of the federal responsibility in health care, for example — you know, state lawmakers protect those other priorities first, like prisons and roads and elementary and secondary schools. Right? 

As so many lawmakers used to tell me, especially back in 2008 and 2009 during the Great Recession ... You know, we can't ... Yeah, I guess we've charged tolls for roads, but you can't really charge a lot for roads. You can't charge students for K-12 education. You can't charge prisoners for the prisons. But we can charge tuition. And so we could cut back on higher education and let students pay more, and that's exactly what has happened. And I fear that's going to happen again. Right? 

The cost of entitlement programs that were created decades ago are taking more and more money off the table in the states. Ten percent of state dollars went to Medicaid in 1987. According to the National Association of State Budget Officers, today it's 30%. And, you know, there's just more demand on how colleges spend their money today — more requirements. And so I personally do not think that states and the federal government are necessarily rowing in the same direction. 

And so I believe that this is a moment for states to step up because what is important to them? Because, you know, if you think about the federal government role in higher ed. It was about access. Then it was about completion. Then it's about maybe outcomes now, flexibility. You know, at one level, you have the administration. Right? You have president Trump who wants, you know, viewpoint diversity. I'll argue he just wants one viewpoint, but, you know, we could argue that on another episode. 

You know, colleges want access for students, and maybe states do want that too. Affordability. That's true also of the Trump administration. You know, a big piece of this compact that they're trying to get colleges to sign is around affordability. So it seems to me — at least my opinion — that we don't have alignment on what the federal government wants, on what the states want, and what the institutions want.

Michael Horn

Yeah. It's interesting. 

We might disagree here in this sense. 

So put aside the Trump schizophrenic actions, if you will. And I'll say it this way, right, that for years, from my perspective, the federal agenda ... And, again, you know, $180 billion — roughly a quarter, right, of the spend, in higher ed — is from the feds. 

So this is like a significant system that creates incentives, good or bad. A lot of that for years was around access. There were very few questions asked around value, outcomes, affordability. Right? 

And my sense is that despite all the turmoil you just sort of alluded to ... like you said, we're not getting into completely on this particular episode. We have on others. In many ways, I think that the feds and states are moving in similar directions in the sense that, like, employment outcomes, ROI, gainful employment, those are, like, top of mind, I think, for leaders at all levels. 

And so you look at the One Big Beautiful Bill Act, a gainful employment metric in essence... which was, you know, pioneered by the democrats, right, on for-profit and career colleges. It's now, in essence, across the sector. 

Phil Hill has, I think, very constructively pointed out some flaws in the way that that metric is calculated. Nonetheless, it's in place, and it's going to be focusing on employment and return. You have the grad plus loans elimination caps, right, on other loans. Like, these are getting codified now in the system in a way that I think starts to focus and say, 'Access alone is not the purpose of this, outcomes is.' 

You also have a lot of agreement that workforce outcomes should be a bigger deal, right, at the federal government level. And so you see short-term Pell now coming in. You see interest in apprenticeships at the federal level and some actual movement there. 

And I think a lot of that is in concert with the states moving that direction as well because, as we know, a hospitable thriving economy with great work is a good recipe for states. And in some ways, the incentives — or the feedback loops, Jeff, right — are a little bit tighter there, I think. I have a question for you off this, but maybe I shouldn't overreact.

Jeff Selingo

And I have a question for you off this because one thing that we haven't really talked about is the research function of higher ed, which has always been really a purview of the federal government. States maybe put some money towards that. 

But, you know, the federal government spends more money than anybody on research at universities, and that is clearly under threat in different ways. Again, it's really hard to get a clear answer on what's happening there. But there's clearly been pullback. 

You know, California wants to spend more money on research. Massachusetts wants to spend more money on research. So it seems like maybe that's a place where they're not necessarily rowing in the same direction.

Michael Horn

I would agree with that.

Jeff Selingo

What do think about that?

Michael Horn

I think you're right there. Right? And I think there's huge questions on ... Maybe even more fundamentally, like, does the federal government at the moment view universities even as that engine of research, or is it different universities? It gets into some of that viewpoint diversity and presence of international students. I agree. There's a lot of friction and noise, and they're not rowing, at least from my perspective, I don't see the same rowing in the same direction on that one. 

And states are also, I think, trying to protect their institutions, right. Which perhaps shouldn't be surprising. So that's part of the dynamic, I think.

Jeff Selingo

Right. And I'm a little worried that if you have...  First of all, Massachusetts or California alone cannot put in nearly enough money…

Michael Horn  

Sure.

Jeff Selingo

That the federal government can do. Plus the thing the federal government can do is pull together this federation of 50 states we have and institutions all over the place. You know, does Massachusetts really want to be putting money behind research where maybe MIT or Harvard is part of it, but so are many other state institutions as well or institutions in other states? I don't know. 

It's a question I don't think we've really asked yet, and that's where I feel like this partnership that the federal government has had since post-World-War II, with universities to do research is something maybe the states can't pick up. That's one piece that maybe has to really be a federal government role. You said you had another question, too, on that.

Michael Horn

Well, quick agreement. 

And just to quickly maybe wrap up this research piece. Which is to say, my take, Jeff, is that in a weird way, we have moved to outcomes orientation or output orientation on research in terms of citations in academic journals, but we don't really think about utility and so forth from the research. And I don't know what an outcomes orientation should look like there because I think you don't wanna be short term focused with the kind of research that you want universities doing. 

The whole purpose, right, is to be longer-term breakthroughs. That's sort of the strength of the sector, I think. But my sense is that the incentives have taken us off the rails right now. And so a rethink around those models wherever the research occurs — universities or elsewhere — you know, I think that would be an important thing for the country to have a good-faith conversation on as opposed to what we're having right now.

Let me ask this, though. I'd love your reaction on this because I was struck that Ruth... So let's go back to where they're rowing, I think, somewhat together. And Ruth said that in Iowa and Pennsylvania, more than half of their postsecondary students are gaining a work-based learning experience with Indiana and Virginia not too far behind. Did that surprise you that the state where you grew up was on that list? And that it would be over half. I don't know. My reaction seems enormously positive. No?

Jeff Selingo

It seems enormously positive. I was surprised by that for two reasons. One is that Virginia has a very dynamic economy. Indiana, as you know, we've talked several times on this show about what they're doing at the high school level with apprenticeships particularly. So I was kinda surprised by that. 

I'm a little worried, though, when we talk about it as a postsecondary experience because it seems like this is where there could be alignment between K-12 and higher ed. Right? 

So if Indiana is a little bit behind. And now their K-12 is probably gonna be ahead, and I would imagine in Pennsylvania that the K-12 system is behind on experiential learning. So I think there needs to be greater alignment from this. 

You know, Michael, in my newsletter recently, I talked about the high school experience and how it really has just changed in a way where it's only about — or seems to be only about — college outcomes. And at a time when we know that the percentage of high school students going right on to postsecondary education has fallen from 70% to 60%. And I don't know the statewide numbers very well, but nationally, it's closer to 60% now. That means 40% of high school graduates are not going on to any sort of postsecondary education. 

So what kind of job experience are they going to have, right? What kind of work-based learning experience are they going to have? 

So this, I think, just leans into an argument that we have had on this show often, particularly with our work last year around the Swiss apprenticeship system — what Indiana is trying to do with its K-12. That work-based learning experiences have to happen well before college.

Michael Horn

Yeah. I couldn't agree more. 

So on that, though, there's another piece of this. Right? And I was a little surprised by this. She did not give higher ed institutions a pass on the macro environment perhaps having lower wages. 

So, again, I was surprised by this, but let me just make the point so people don't miss it. I sort of said, 'Well, look. If, you know, the jobs in Mississippi perhaps aren't great, maybe we shouldn't be dinging their higher ed institutions as much because they  don't have control over the macro economy.' And she sort of didn't give them a pass. Right? And I thought the message was saying, 'Look. You gotta align to the jobs, the economy that is there, and charge proportionally relative to what they pay. You gotta make these things work on both sides. You gotta figure out your cost structure and align to outcomes.' 

Did you have a reaction to that? It's quite a change in mindset.

Jeff Selingo

I did. What was interesting to me is that I feel like we need to also think about the ecosystem of higher education in the state. So, should we ding the two-year colleges and maybe the regional publics? Yes. Should we ding the flagships, which might be attracting a wider array of students — by the way, not only in state and out state, and maybe more focused on their regional economy and not just their state economy? So that's the thing I wanna be careful of here. 

I do think that, especially, like, the two-year colleges and even the regional publics really should be focused on their state economy, really should be focused almost on their local economy. Where the big public flagships and the big large research public universities already are focused or should be focused on their ... not only on their state economy, but on their regional economy as well. 

But at the end of the day, as we know, Michael, colleges still are not comfortable with this idea that it's part of their job to get students jobs. And that worries me right now. 

You know, I can't go to a talk these days without — in fact, this just happened to me last night in New Jersey — without somebody raising their hand at a talk and saying, 'You know, AI is taking all these jobs.' Which we've talked about before. 'What's colleges doing about them?' 

And I think most colleges are kinda flat-footed right now. They're just kind of taking this wait-and-see approach about the economy. And that to me makes me nervous that they have ... Not only do they not think it's their responsibility to help students find a job, but now the job market is changing so dynamically that no matter what they do they're always going to be behind. 

And so I think they need to take a much bigger focus on this because states are going to ding them, and it's clear to me... You know, another piece of that compact, if you remember from the federal government, was around majors and around putting more money, for example, into STEM majors rather than the humanities majors. And I think states are going to start to copy what the federal government is doing, and I think you're gonna start seeing that more in states. 

We saw that in Indiana, for example, earlier this summer. 

They basically said to the states, you know, you have to figure out what you're doing about these low-enrollment programs. And right before the state law went into effect, all these low-enrollment programs suddenly shut down. Right? Even though, by the way, those programs have been low-enrollment for a while, there was no incentive until now to shut them down. In this case in Indiana. 

So I think that we are going to have to... There is going to have to be more of a stick from either the states or from the federal government to get colleges and universities to not only align better with the job market, but to move faster in an era of AI.

Michael Horn

Which is gonna require more integration. 

I'm laughing a little bit that you cited maybe another area where the feds and states might row together. I'm not sure I'm excited about that rowing together, though. But nonetheless, you said it, not me. 

So, two more things that jumped out to me. 

One, I loved your little back-and-forth with Ruth around the purpose of this report and if it is to inject competition and ‘Who is it for?’ 

And just one side note because I wanna hear you a little bit more on the competition piece in a second. But as you know, I've been working with, Mallory Dwinal-Palisch, a past guest on Future U, founder of Reach University and of Kraft Education that got acquired by Western Governors University, Angela Jackson, a colleague of mine at Harvard's Graduate School of Education, and Danny Curtis, our producer from last year and future year on Future U. 

The four of us have been working on a report looking at how states are really deconstructing silos between K-12, higher ed, and the workforce training to focus more on ROI and good employment for individuals. And basically, the argument of the work, Jeff, is that these silos served, and in some cases still do serve, actually, really important purposes. But that if we don't find ways around them or to create new business models that have different incentives in effect, we're not gonna see the new forms of education that can think about the questions that you just raised of greater integration with the workforce. And so against that effort, we've been profiling some states, as well. And the early research, I think, is pretty interesting. At some point, we'll dig into it a little bit more. We've been looking closely at Indiana, Colorado, Louisiana, Arkansas, and South Carolina. More to come on this. 

But I guess the point I wanna make here is: we've been thinking, if you wanna run this play to take down the silo and unlock this opportunity, who's at the table to do that? And it's like a litany of people, right, across the state government that actually have to be involved in those sorts of changes. It's not just one person. And so, you know, Ruth said, obviously, the SHEOs are central to this, but it's not just them. And that certainly echoes what we're seeing in the research. 

But on this competition point, you know … thoughts? Has it changed? Is it different from the '90s in terms of how states are competing?

Jeff Selingo

Oh, I definitely think it's changed from the '90s. First of all, I don't think you have the federal impetus. So, again, this is where maybe there is this partnership between the feds and the states. But if you remember, I think it was, what, 1990.. '89 or '90...  When president Bush called all the governors …

Michael Horn

Altogether to Charlotte or whatever.

Jeff Selingo

To Charlottesville for an education summit. And, you know, you don't see that anymore. 

First of all, I doubt the governors would even get together. All the governors would get together with the president anyway on top of that.

Michael Horn

They can do it in the ballroom, Jeff.

Jeff Selingo

They could do it in the ballroom because at the rate it's going, it might be built by next week. Yeah. 

And then you also have governors who are not ... I mean, when was the last time, can you recall, that somebody ran as the education governor? Right? 

A Bill Clinton, you know, Bob Wise, right?

Michael Horn

A Jeb Bush. Yeah. or governor Hunt.

Jeff Selingo

Or governor Hunt. The governor of Georgia who then became a senator, Zell Miller. Right? 

So, you know, all of these people who ran on largely an education platform. You don't see that anymore either. 

And so it seems like states to me are not competing on this front. 

So by the way, if I were a governor — and I said this, by the way, last year during our episode on Indiana — this is where I would lean into. To me, the future is a ... 

Everyone's concerned about AI and the economy. To me, the future is about figuring out the human-capital piece of this economy. Not only, 'How do we complement AI?' But we also have all of these hands-on jobs — both the trades, but also, you know, things like health care and education — that at least for now, you'll tell me if I'm wrong on education, at least for now are human-centered and human-powered. 

If I were the governor, I would be trying to figure out, 'How can I be the leader?' In not only leading in AI, which I think some governors are trying to do? Right? We see that particularly in California with Newsom. But, 'How can I lead the next generation of human capital?' You know, particularly when you look at, you know, all the test scores now coming out. You know, it seems like there's no impetus to be that education governor right now. But it's different than it was in the 1990s where it's not just about standards, but it's about, ‘What should that education even look like?’ 

I would love somebody to take the lead on that because I think that would be a really fascinating campaign to follow. And that would inject, I think, a little bit of competition where states would be like, 'Oh, I don't want Virginia to get ahead,’ or, ‘I don't want Indiana to get ahead.' 

You know, I was hoping after our episode last year on Indiana that we would have a lot of other states copy them on the apprenticeship model because to me, that's a place where you can get ahead.

Michael Horn

Yeah. Yeah. And I do think states are starting to move that direction. 

I'm a little more optimistic, I think, on some of the leadership there. It's not maybe in the places where we frequent, I think, in terms of where we live. Right? But we'll see. 

Last thing for me, and then you may have some closing thoughts. 

Her answer on ROI from the state's perspective, I appreciated that answer. And I will say I am still personally frustrated that most of the ROI calculations that we've seen over the last several years don't consider the investment that states are also making into these institutions. As in, I think, yes, let's measure the ROI for the student. I wanna know relative to what they're spending and taking out in loans and so forth if there's a return. But I also wanna know if we add in the state funding, the subsidy into that denominator, what does that return look like? 

Because I think it'll help states rather than arbitrarily say STEM majors. 

And by the way, if you wanna see where the biggest hollowing out in entry level jobs are, it's computer science. It's not humanities. So rather than arbitrarily pick winners, they could actually make some rational decisions on, 'Hey,  we wanna invest here, not there.' Or, 'Hey, this doesn't have a return, but we think it's a good use of state dollars for these reasons because of this theory of action.' Right now, I think we're just not able to have those conversations in near the depth that we could if we had a real ROI to consider total investment. 

That said, again, I appreciated Ruth's point. And part of the point was that even with this information, you might not say as an individual, 'Gee, we all wanna be nurses.' Right? Instead, students, I think the point is, would have the information up front so that they would have the agency to consider that as a factor in whatever choice they ultimately made. 

You have a whole chapter about this in your book, right. You know, the economic data is part of that choice, but it's not the sole thing driving it. And look, there are plenty of things that don't have obvious economic returns that in certain circumstances may absolutely be what someone wants to go do. But they should know eyes wide open, this might not have the positive ROI. And if you don't have the family wealth or something like that, maybe it's not the right choice for you at this moment.

Jeff Selingo

Well, Michael, the only point I wanna make here is that where I definitely agree with you is that we have focused more on the 'R' of ROI and not enough on the 'I.' 

And that includes, by the way, not just the states, but individuals as well. So everybody keeps talking about the returns on education. You're gonna make X number of dollars more over your lifetime. You know, they've talked a lot about earnings by degree and earnings by institution. And I always ask people, 'Okay. That's great that you're gonna make X number of dollars more, in this major or, you know, over your lifetime. But what was your investment in that, and what was the state's investment in that?' So I still think we are too often forgetting about the investment piece of this to see where those biggest bangs for a buck are. 

But, so I think we're gonna leave it there, at this point. It was great to have Ruth Watkins join us from Strada Education Foundation. Please check out this report. 

I do think that reports like this do entice, convince, persuade perhaps, states to do better, and I'm kinda curious to see where we're going to be over the next couple of years, especially as we get a new crop of governors running, and what are they going to make of these reports to try to improve their human capacity, their human development, and their human talent in an age of of AI. 

I think this to me is going to be the key issue facing both the feds and the states in the coming years when it comes to human capital. 

So, again, thank you to Ruth. 

But before we go, we're gonna bring Ruth back just for a couple of minutes to do our lightning round, which is a new feature on Future U this season, and here is Ruth.

Michael Horn

Alright. Excited to welcome back Ruth for our lightning round here on Future U. And Ruth, our first question for you is, what's the most ridiculous campus complaint that you ever had to deal with as a campus leader?

Ruth Watkins

So it doesn't rain very often in Utah. But one day in the president's office — it happened to be an early morning with a pouring rain — and the president's office got a call from a mother that said, when will you be picking up my child at their residence hall with the covered golf cart? Because they cannot walk through this rain.

Michael Horn

That is a great answer. Okay.

Jeff Selingo

You might melt. You never know.

Michael Horn

Yeah. You never know. Right? Let's go to the second one, which is and this might also be the answer to this. But, what's the weirdest thing that you ever had to deal with when you were president at the University of Utah?

Ruth Watkins

So I was thinking about this, and I was thinking about one September morning, and we were just about to host the vice presidential debate on campus in early October. So there was a lot of effort going into grooming the campus and making sure everything looked beautiful. And we had an unprecedented windstorm. One of those straight windstorms. These things do not happen very much in the mountains. It knocked over so many trees. Wonderful story about the campus coming together to help clean up, pick up in short order. But it was not something I expected.

Jeff Selingo

So once again, I'm starting to think that the weather in Utah is something that any president has to learn to deal with.

Ruth Watkins

There's a lot of sunny nice days out there.

Jeff Selingo

And Ruth, what for the final one on our lightning round here. What is a higher ed buzzword that you would prefer never to hear again?

Ruth Watkins

Soft skills. People say all the time we need to perfect soft skills. Unfortunately, that makes people dismiss them. These are the most important capabilities people learn in college.

Jeff Selingo

So what would you prefer to call them?

Ruth Watkins

Higher-order skills.

Jeff Selingo

Okay. Right. So they take on a greater importance.

Michael Horn

Terrific. So huge thanks to Strada for sponsoring this episode. Ruth for joining us again. 

For all of you for listening and paying attention to this very important issue at this point in higher ed. 

And we'll talk to you all next time on Future U.