Rachel Lipson on the power and potential of community colleges, local ecosystems, and institutional constraints.
Featuring RACHEL LIPSON
This episode, we talk to Rachel Lipson about the role and potential of community colleges in driving economic development. Lipson was until recently co-founder and Director of the Harvard Project on Workforce. Previously, she was Director of Special Projects at Year Up. She has also worked on economic development at the World Bank, on community colleges for the State of California, on workforce development at the JPMorgan Chase, and in training and organizing on President Obama's re-election campaign.
Lipson - with Robert Schwartz, Professor Emeritus at the Harvard Graduate School of Education - is a co-editor of an upcoming volume titled America's Hidden Economic Engines: How Community Colleges Can Drive Shared Prosperity. The book features case studies demonstrating how community colleges across the country are innovating and shaping their local economic development ecosystems. Lipson shares examples from these cases, and helps us understand the potential of community colleges in powering the economy, how they fit into their local ecosystems, and the institutional constraints that prevent them from being as powerful as they can be.
Lipson's concluding chapter in the book lists a range of complex challenges the U.S. currently faces - decades of increasing inequality, racial wealth gap, and elite capture of institutions. Placing community colleges against this backdrop, she writes: "We do have one institution in America that is uniquely equipped to meet these challenges head on at a very high level."
"At a moment when there is recognition about the importance of investing in place, where we have regions and communities that have been left behind for decades, we need a new lens for thinking about community college success... they're going to be critical to the future of our local economies. And also to our democracy, for people feeling that they have a shot to move up the ladder in this country."
This episode is available on Apple Podcasts, Spotify, and wherever you get your podcasts.
Note: This transcript was automatically generated and contains errors.
Rohan: Rachel, welcome to the podcast.
Rachel: Thanks for having me!
Rohan: Rachel, I've had a chance to read an advance copy of yours and Bob Schwartz's upcoming edited volume, which I think contributes so meaningfully to the literature and workforce development and community colleges.I have a range of questions to ask you about the role of community colleges, their internal and external constraints, innovations, and so on.
So let's dive right into it.
Rachel: Sounds good. Excited to jump in.
Rohan: As a starting point, help us understand what's happening in the US higher education market, especially in how it relates to economic mobility and prosperity. Your book acknowledges that there's a declining interest in bachelor's degrees as the best pathway to economic mobility. But research also demonstrates that college attendance accounts for the biggest differential in economic status. Help us understand this. What’s happening here?
Rachel: Yeah, it's a great question and an important one to start with because I think this context really matters.
So in economics, for a few decades now, one of the most closely held truths when you think about education and economic advancement has been something called the “college wage premium”, which is basically the more education that you have, the more that you make. That relationship has been perhaps most compellingly by Larry Katz, but it also shows up in the data over and over again. And it isn't really, I think disputed, although of course there's a lot of nuance in that in terms of - it matters where you go, it does matter what you study. There are a lot of factors that can determine that outcome. But, on average, college degree holders in the US have fared better in wage terms than those who don't hold a bachelor's degree. And that's been a pretty steady trajectory over the last two decades.
And if you look at the jobs that have been growing in the US economy, particularly the jobs that pay well and have been growing, it’s also true that post-secondary education appears to be increasingly required. That's to say that the structure of the economy in a lot of ways does seem to be favoring more education, not less.
But I think that view is in some ways clouded or has not fully accounted for the big challenges around cost and price tags that young people, and also older adults in this country, see when they look at college. We know that the cost of higher ed has risen faster than inflation for a few decades now that we also have this system where students rely on internationally extremely. If you compare the US to other countries, the levels of debt that we expect people to take out in order to attend higher education I don't really think match anywhere else in the world.
And in particular over the last few years, you have a dynamic where colleges don't have the monopoly over post-secondary education in the way that they used to. You have the rise of new types of providers and competitors, in particular, many that are offering shorter options that don't require that same time commitment or may not require you to be sitting in a seat in a classroom.
And then the final thing that I'll add is, what we've seen during the last few years since the onset of the Covid pandemic in particular is that the low wage labor market has been, since the Covid recovery at least, extremely tight. We've seen, for the first time in a few decades work shows that wages for workers without post-secondary education have been growing faster than for workers with it. Basically the low wage labor market right now is doing well, and people have opportunities make more money than they did a few years ago – in roles as diverse as working at Target or in different types of sales roles – that may not require any kind of post-secondary degree.
And so that's really in some ways acting as a competitive force for college. You look at the polling data about what Americans think about higher education, the trendlines are pretty clear. Trust in higher education institutions have been on the decline. People are increasingly questioning whether college is the route or can deliver on a good job. And some of this is most profound amongst Gen Z and the youngest generation now, really challenging this narrative that we'd seen for a few decades prior of college being the route to economic mobility.
So I think we're at a really interesting moment for higher ed in the US where they're presented with a bunch of trends that challenge its (college’s) preeminence in the education to labor market transition. And what our post-secondary institutions choose to do in the next few years is going to make a big difference in the trajectory going forward.
Rohan: So enter the community college system. You just mentioned the Covid pandemic; your book also lists a range of complex challenges,decades of increasing inequality, the racial wealth gap, elite capture of institutions, and then you write: “We do have one institution in America that is uniquely equipped to meet these challenges head on at a very high level.”
Where does your optimism about the role of community colleges stem from?
Rachel: Look, I think community colleges, first of all, are pretty amazing institutions. In terms of, they are there to serve everyone, which you can’t say about pretty much any other institution of higher education in the US. So I just want to lay that out first, that they view that as their mission. They are not exclusive, they're open access, which runs counter to a lot of what we've thought about of as college in the United States.
I don't know if optimism is the right word here? A lot of my focus on community colleges, it's just about the reality of where is the infrastructure? Where are the people? Where is the talent? Where is the footprint of institutions that can make a difference? And if I look at the community college system nationally – the numbers have been going up and down, but 7-10 million students any given year, that's almost half of undergraduates nationally. They are everywhere. They're in every community. We can't say the same thing about year institutions and other publicly funded higher ed institutions, including in rural counties and stretching across from coast to coast.
And they are the most diverse and most representative the US population, if you think about the landscape of higher education. So that's both in socioeconomic terms of who they serve, in racial terms. If you want to think about post-secondary education, community colleges are the place that look the most like the country. And we heard this over and over again in interviews for the book. But at least historically there's been the perception that's most common out there.
Again, increasingly challenged in some places, but if you ask people in the community, where do you go to get trained? Where do you go to access training for jobs? Community colleges are at the top of their list. People know who they are, where they are. They probably know someone in their family or community who attended there.
So really my focus on community colleges is because of the assets that they have, and because we know so much about the challenges to scale and other settings. I'm excited about the system, because I think if we if leverage them properly they have so much potential to reach so many people.
Rohan: I guess what I'm hearing is that community colleges right now seem like the best available institution to play this critical human capital development role given their reach, access, accessibility, as well as their ability to actually be available to a diverse set of students. Your book points to the role community colleges play both within their larger ecosystems partnering with others, but also the internal innovations that they've made to be able to deliver on their promise.
I want to dive into both of these aspects but let's start with the external dimensions, where I really want to situate community colleges within the larger regional economic development ecosystem. To start with, help us paint a picture of what the local workforce development ecosystem looks like. Who are the main players and what role do community colleges play here? And what are ways in which these different actors are expected to interact with each?
Rachel: Sure. It's a great question because it's a surprisingly complex ecosystem, I would say with a bunch of players and actors that, at times are working together, at times not working together as much as you'd like to see.
Maybe one way to start mapping this out for you, is just to think about the flow of money and where it comes from. And I'd say there's three, no, probably four primary actors there. The first is employers or businesses themselves. If you look at the data, employers are the biggest players in adult education and training in the United States. Most of the money that's spent on upskilling is actually happening within companies. But companies and other employers engage with the workforce development system more broadly as a funder, particularly on sort of pipeline or workforce entry initiatives as well. So they're one big player on the funding side. Also of course they play this demand side role of, they are ultimately the destination for talent that gets built and fostered through the workforce development ecosystem.
Rohan: Right. And I'm assuming here that you're talking about the big employers who actually have the budgets to spend on upskilling and not necessarily small and medium enterprises in that are very locally rooted?
Rachel: You know actually there's a report from Georgetown University Center on Education and the Workforce where they quantify the employer investment
in workforce training. And I actually think, there's probably different ways to measure this, but if you think about even time spent on the job doing learning, for instance, is where people are building all kinds of skills that help them in their career trajectory. And that's an employer making an investment. So no, I wouldn't take such a narrow frame. I think that small employers are also a important part of a local workforce development ecosystem, often partner and work with community colleges as well.
Alright, so we have the private side. We also have government, manifests in a bunch of different ways. So on the workforce system side, you have workforce development boards that are funded through something called the Workforce Innovation and Opportunity Act, that provides funding for job centers, different types of career services, a small amount of training vouchers. And then you have Pell Grants and all the higher education money that flows through to the college system.
You have philanthropic funders, foundations, other types of charitable organizations that have often actually focused on workforce development as a potential lever to advance economic mobility and economic advancement in communities.
I would be remiss as well if I didn't call out the role for unions, which have also been significant players in the workforce development space. And often in collective bargaining agreements with employers actually create a dedicated source of funding for workforce development and training investments.
Then there's a whole set of what you might call like the training providers. Community colleges, I would say there are the biggest segment of the market.
But then there's a whole lot of other options that I sometimes are complementary and sometimes maybe are competitive with community colleges. So you have, as I mentioned, there's all this philanthropic money. There's a growing amount probably of nonprofits, different types of community based organizations that offer training for different types of jobs in their regions. You have apprenticeships, which are on-the-job training models regulated by federal government, where employers are often the provider of the training themselves, sometimes in partnership with the community college or other provider in the ecosystem. You have online bootcamps, starting to grow in prominence for sure over the last few years, that are another source of workforce training. You also have some private for-profit institutions that are on the ground in communities; you think about commercial truck-driving schools or different types of vocational training models that may be for auto mechanics or for cosmetology, they're another player as well.
Then I do want to emphasize that people often, I think, hear the word workforce development and equate that with training. And that's not exactly right. Actually most of the federal money that comes in to support the workforce development system is not going towards the direct provision of training. It's all of these job search functions, career counseling, case management, resume review, interview prep, helping people navigate online job boards and find and secure new employment. That is another primary function of the workforce development and may not, necessitate at all actually enrollment in a training program.
Rohan: Right, so I do want to get into some of the constraints those kind of funding models can impose. But before we do that let's stick with this larger ecosystem approach that exists at the local level.
Now in your chapter on the Lorain County Community College, Hayley Glatter writes, “everyone knows LCCC…it’s a common refrain among Chamber of Commerce officials, industry organizations and local officials.” Tell us a little more about this. What are the type of relationships Lorain has been able to establish with other actors in the local economic development ecosystem? And how have other regions or other community colleges that you've encountered been able to create similar relationships with their local ecosystems?
Rachel: Yeah, so I had the pleasure of being out in Lorain County, Ohio last spring. Seeing with my own eyes the strength of the college's ties with the local community and it is pretty remarkable. It seems to go from the top down, from the President Marcia Ballinger, but also all the staff and faculty.
It is extremely integrated both with employers, nonprofits and different types of key community organizations that are active in Lorain County. And I think you can see it more tangibly, even if you look at the rosters of all of the major entities in the region, whether it be something called Team Neo – it's the economic development entity and business development organization for Northeast Ohio, the statewide manufacturing extension partnership, the hospital system, the local banks. Lorain's County Community College’s President Ballinger is on the board of directors for all of these entities, or if she's not, there's another representative from the college. And they're not just attending board meetings in a cursory way. They are like actively engaging.
There's an anecdote, I think in the book, The president, sorry, the CEO of the Chamber of Commerce in county says that there's literally not a day that he doesn't talk to someone from the community college. Which I think also says a lot. This is the Chamber of Commerce, and it says a lot about how integrated the college is with. with local businesses.
And the second part of the question was about, how do others engage - ?
Rohan: Yeah, that's right.
Rachel: yeah. Look, this can really vary. Almost any community college that you talk to will tell you that they have industry boards. In many cases they are required to have industry boards, but you’ve got to get in there and see how active these boards are. And I actually think that the better metric when you look at it is, not are they hosting some sort of entity within their school where they ask employers to come in, but rather are they looking externally and are present in basically every major making body in their region.
It's interesting. Another thing I think that varies region by region is the strength of the other institutions that are part of this economic development ecosystem, which can vary a lot as well. And in some places, you know this well, the economic development agency may not be that strong or there may not be super strong industry associations to partner with. And what's interesting is, in those cases the community colleges that are putting this jobs mission or putting economic mobility at their center, they then are working with individual businesses in their region. They're thinking about, how do we build a program that meets this employer's need? There's both an engagement with intermediaries, but there's also a strong fabric and throughput line to the biggest economic players in the region.
The fun thing I'll say here is I think we're in a, I think, an exciting moment for this development of community colleges' muscle around economic development. Over the last few years, since the onset of the pandemic and during the Biden administration, there's been a bunch of different big federal opportunities that have been, I think, catalytic in certain ways for colleges to be out there working with community partners in economic development to go after, and then in some cases win, these major funding proposals. I think these external funding opportunities are actually an interesting model for thinking like, how do you build some muscle around working together? Working not just towards a making a plan and a proposal, but then actually implementing together.
So in some of the places that we've studied, they've been doing that work for a while. But prior to the recent influx of new funding opportunities, they were working on registered apprenticeship grants in their communities. They were working on different types of the HUD promise zones. And they've basically developed that kind of muscle memory around working together with the human relationships. They all know each other. And have been through kind of the tough piece of this, which is not just making a plan, but doing it alongside each other.
Rohan: So let's continue with that thought. One of the other things that stands out in the book is that there are examples of community colleges that are not only responding to the demand side but are also playing a critical role in shaping the local economic development system in being a part of local innovation. Tell me a little bit about how to do this, and perhaps give us an example from the book about where you've seen this happen with success.
Rachel: Sure. So look, I think it's a variety of factors. I can pepper in some examples from different places.
A lot of folks, when they think about this question, they start with the data, which I think is important, but certainly not all encompassing. Developing some in-house capability around watching labor market and understanding, how employment changes are shifting and changing does seem to be one interesting condition here. In the book we talk about NOVA (North Virginia Community College), which has been building a pretty impressive in-house labor market analytics function that now not only services the college, but also other economic development entities and partners in the region and the state.
Data is one piece – not just having the data, but having a team that can work with data and be able to meaningfully translate that into what the college is prioritizing and offering. That can't be enough though. We know that you can see where winds are moving and then not be able to implement on it. And I'd say also that the data sometimes misses, we're still not that good at predictive labor market data. And I can't overstate the importance of those community and industry relationships that are already and ingrained in the community colleges that do this well.
So if you are Lorain County, and the CEO of the Chamber of Commerce is talking every day to someone at the college, you're going to hear about what they're seeing out there in the market, what they're worried about, what they're excited about. And so there's something about this having that strong communication and feedback loop that seems to make an important difference and asking the questions of not what do you, not just what do you need today, but what are you going to need in a few years from now? And also what do you think might happen here?
I am also impressed by school after school. In San Jacinto in particular, we kept hearing about hires that came from industry who also can provide that kind of market intelligence feature and their critical role in all of this.
And then the final thing I'd say that I'm excited about is colleges being able to sort of see ahead here. And I think Marcia Ballinger, President of LCCC, I'm trying to remember the term that she called it, “seeing around the corner” maybe? Some of these colleges are actually like building their own entrepreneurship centers or “maker” spaces on campus, which is interesting if you think about the role that community colleges can play in spurring business formation in their own communities. Being that place where someone with a new idea is actually able to get some of the enabling supports. I think that's especially true for regions that have been struggling.
I think there is frustration sometimes from community colleges, rightfully so, when they are told to align to local employer demand, align to local employer demand, and they say like, hey, we're in a region that is depressed right now. There isn't there isn't local employer demand for us to align too, or the employer demand that's here is not generating good jobs. So how can we play a role, not just in being passive and waiting for someone to tell us that these jobs are coming, but actually helping to create jobs.
Rohan: I want move more to the internal dimensions and the internal innovations in delivering their product. One of the internal structures I was very intrigued by was the evolution of non-credit courses at the Mississippi Gulf Coast Community College. Based on both reading the book but also talking to you, I know the importance you place on non-credit programs or courses. But what intrigued me about Mississippi was that it seems to have started with a competitive internal spirit between the non-credit and credit sites, but evolved into one that's a little more symbiotic now. There's also evidence from NOVA that's been able to restructure its non-credit courses. Now, this is obviously an important curriculum shift, but also in a place where there are more fundamental institutional constraints.
But first, what are these non-credit courses? And tell us a little bit about the significance within the larger curriculum mix.
Rachel: Yeah, sure. I want get into this space in a way that's accessible because I feel sometimes even spending years listening to conversations about Community College credit processes, it can get real jargony real fast.
I think for the student, they're just looking for a program that they think is going to lead them on a pathway to career advancement, a stable and good paying job. Ideally something that is flexible and meets their life needs at that moment. And they are not like - oh, I would like to enroll in a non-credit program, I would like to enroll in a four-credit program. So I think that's one thing, just to note off the bat.
Rohan: But I guess the constraint exists on the supply side, right? In terms of what community colleges are able to do.
Rachel: Yeah, that's right. So I think about the history here, and I'm actually not a community college historical expert, but there's huge diversity in what necessitated the whole creation of this non-credit side of the house.
Community colleges are – the word “community” in them is an important piece of their mission, as talked about earlier how they're everywhere. They're integrated into their community and they want to be a place where community members can come and learn for all kinds of purposes. So you'll often see community colleges offering things like cooking classes and dancing and English as a second language, or different types of business support programs. And rather than putting all of that stuff through the processes of academic accreditation, I think for good reason, they created a separate structure where what we're now talking about – the non-credit side of the house – sat.
The other big historical reason why there was non-credit programs in addition is that in a lot of colleges, you'll hear them talk about their career and technical education unit, or they have different types of divisions that essentially, historically we're thought about as providing contract training for particular employers. So the idea would be, like – an employer would sign a contract with the community college, they would develop a very specific curriculum that meets the employer's needs. The employer doesn't care if that program is for credit or not, or they just want something custom. And so that's another use case for how this whole non-credit thing came about.
Where it stands today is, so you have to hold on, let me just, I want to make sure I get this right –
Yeah, so where it stands today is that basically like non-credit programs are held to different standards than credit bearing programs. They tend to be more flexible on the supply side. They may not have to meet the same requirements in terms of qualifications of the faculty, of the curriculum, reporting. Potentially because of, I don't know if it's because of that – well the reality is that non-credit programs right now are ineligible for federal financial aid. So that is a really big difference. And I think the policy explanation for that is because they adhere to different standards.
The other, I think one of the big differences to note is that in a four-credit program, at least in how the colleges organize themselves, they are part of a program that is intended to lead to professional credential of some sort. So they are not really intended as standalone courses. Whereas on the non-credit side of the house, huge variety here but you can think about them as often offering a short term certificate or an industry recognized credential, or some other form of occupational credential. But they were not necessarily designed to be part of an Associate's or Bachelor's degree program.
Now, I think the Mississippi Gulf Coast case is a great one of where the field is going, or where I see excitement and I'm enthusiastic about. It’s between credit and non-credit, that they should be more integrated. So if someone finishes a non-credit course and decides that if actually this course maybe was six weeks, if it had lower barriers to entry, if it encouraged me, it made me feel like I can't pursue higher education. That there's an easy way to get onto the credit track and continue your progression. That's one exciting I think for all of this.
And then a reason why a lot of focused training is increasingly happening on the non-credit side of the house is because of this flexibility question of how do you start up a program fast? How do you make sure that it meets employer needs, versus checking off all of the different bureaucratic boxes at times that a state or local higher education system might mandate? The non-credit side can often be a, just a much better fit for that type of learning.
And I do think it poses some questions on how we think about what's happening on the four credit side. Some of those principles can be possible. You'll see in the book we, we talk about San Jacinto, for instance, referencing the non-credit side of the house as an incubator for their programs, which I think is a cool an interesting model for other schools to explore something out, if we can get the pieces right. And then ideally, you want students to be able to get a credential that will count in an eventual progression towards an associates or bachelor's degree, if they choose to pursue that path.
Rohan: Right. And at an institutional level, how are we measuring the success or the impact of non-credit courses?
Rachel: It varies a lot. As a country, we have not yet built systems to capture and measure impact in the same way as we have for four-credit courses. For instance, not to get too deep or wonky research for audience here, but does not capture non-credit completions data. Some schools I think are invested in understanding whether their non-credit programs are delivering on the economic impact that they would like them to have and are doing their own tracking of participants following them over time. But unfortunately, I think to date that's still probably more of the exception than the rule.
Rohan: We've talked about a variety of institutional constraints, which takes me to some of the non-government innovations that obviously don't need to contend with the same set of larger constraints. Things like Project Quest, things like Year Up, where you've where you've had some experience.
How do you compare these innovations or interventions to the role community colleges have been able to play? What are the gaps and how, at an institutional level, what are the kinds of things that the community college ecosystem needs to invest in to be able to bridge this gap?
Rachel: Yeah, not an easy question there. Let me throw out a few thoughts.
Again, wide heterogeneity here, each community college is different. I think you are seeing widespread acknowledgement in the community college field that these wraparounds support, these life factors, are critical for enrollment completion, and then successful transition into good paying employment. So community college presidents I think to actually talk a really compelling game about how many of their students are struggling with housing insecurity or might have a car breakdown and then can't make it to school, and then the cost of the car repair winds up becoming the obstacle for them actually being able to continue and complete their credentials.
So I think there's a lot of acknowledgement here, and efforts in different places to really address it. You'll see some of them mentioned in the book around colleges investing, in food kitchens, student support centers, in more case management and coaches. But the funding model for community colleges doesn't really incentivize the, provision of these – I think they will call them student services.
And it's often so focused on enrollment and graduation that there's not enough resources left behind for these other life factors. Whereas I think that, certainly not all non-profits in this space, but places like Year Up and Project Quest and Per Scholas not only have recognized the importance of wraparound services, but really made them critical to their model.
I'll say though they're expensive to provide and it's part of the challenge around scaling programs, is that how do you provide that more personalized support of a bunch of adults around who care about your success, who are engaged across the academic and labor market pieces of your needs? Year Up has a huge team of people with social work training who work alongside the Year Up students and help see them through to completion. And I think that is just a challenge for community colleges to provide that type of intensive support just given their resourcing models. I don't know if this is in the NOVA case, but I've heard Anne Kress, the President, something like a 1:500 counselor-to-student ratio at community colleges.
So there's a long way to go in terms of having those human supports. That said, I mean there's again a lot moving in this space, and there was a great book a few years ago by Thomas Bailey and some colleagues called Redesigning Community Colleges that has been really impactful in the field. That led to something that people may have heard of, called the “Guided Pathways” movement. And this was the idea of moving community colleges away from being a “cafeteria” model, where you there were like hundreds or thousands of different options and you had to figure out how to pair them all together towards getting on a degree that then linked to a job, and instead creating like a more cohesive and integrated pathway.
There's also a part of this idea, which is not just on courses, but for services. Can you create more of a “one-stop shop”, where it's not like you have to go to the one office for challenges with your financial aid and another office for the help with childcare, and another place for food assistance? Can you create a structure where people have a place where they can go for help, and where also everyone at the college feels that this is part of their job? That it's not just fulfilling a narrow set of job tasks that their department may be responsible for, but instead that everyone is for this mission of completion and labor market success?
And the book references an initiative that the Gates Foundation has funded for a number of years called “Completion by Design”. That has included a lot of these sort of comprehensive, strong advisory supports. And I think this is where the nonprofits often are able to do this well. In part because they are smaller, and have more resources per student. But I also think it's an area that's ripe for collaboration and partnerships; I don't know the answers of whether community colleges should always be taking this on their own, or instead can we find a way of creating funding models that support community colleges in partnering with others in the community, who can some of that more cohesive guidance and support the model.
Rohan: Right. So I want to dive deeper into the funding model issues which came up earlier in our conversation as well. And it was also a common point through your book, where the funding constraints that community colleges face often restrict their abilities to invest in their own capacity. And colleges that have done well have been able to tap into some additional funding resource. For instance, the book talks about Mackenzie Scott making an unrestricted gift to Mississippi. And then Pima received a 15 million allocation from the governor's office.
How much unrestricted funding do community colleges really have? And have you seen other models where philanthropy has been able to support the community college model to actually fulfill its mission?
Rachel: It's a great question. It varies a lot, but I think the short answer is they typically don't have a lot of unrestricted funding, and certainly less than say private private four-year institution would have.
And my colleague at the Project on Workforce, David Deming, always does a great job at explaining this inequity which is – at least in public K-12 education, we've come to a consensus of a society that we give the most resources to schools that are serving students that may be harder to serve; but in higher ed on the public side, we actually do the opposite. We have given the most resources to schools that serve higher shares of high income students, who are more likely to succeed in the first place. So I think there is just a fundamental equity question there of how our higher ed financing system is set up.
Community colleges often have foundations but they're typically small and I think in a lot of cases fund small scholarships, but they don't have big teams that are focused on securing philanthropy and private gifts.
And the public sector incentives are often just really focused on enrollment, enrollment, enrollment. You know, how many buts do you have in the seats? As we were just discussing less focus on, on student services, for instance. So, I, I am interested looking at these schools, you're right, they've diversified a lot beyond the formula funds that they might get from Pell Grants, and enrollment, to thinking more holistically about how they fund this for good jobs and the economic development mission.
In some cases, that is from competitive grants. In some cases it's tapping into the state. In some cases it's tapping into philanthropy. Arizona basically gives zero state funding to their community colleges, which is kind of shocking. So it means that they have been forced to be both reliant on local property tax income and tuition, and really be creative in looking for outside sources of funding, whether from industry or philanthropy, et cetera.
Rohan: I think the thing interesting is there's so many of these private interventions that philanthropy ends up funding, instead does that cannibalize the potential of community colleges?
Rachel: I think it's a really a good question and a hard one, because you often hear from philanthropy this theory of change that we're doing catalytic philanthropy. We're going to show a successful model, and then it's going to reach scale by tapping into public resources. And in this space, it would mean like entering the community college system and bringing in that change from the outside. And I guess I just haven't seen that many really exciting proof points for that, which to me is a call for philanthropy to maybe rethink some of their models.
I feel that they have really, in some cases, overweighted on entrepreneurs that are working completely outside of the system. And there hasn't been focus on entrepreneurs that are working inside these institutions, to understand how they are working on important innovations to change the trajectory, to change the incentive sets. But they need some startup capital to get those new programs off the ground and into place, and I don't think that government has done a good job of making those funds available. And I think it's a really good fit for more philanthropy to want to lean in.
Rohan: So one of your concluding points in the book is, and I'm going to quote you again, “if the US is to leverage community colleges as economic development institutions, we need also to understand and improve their effect on local business formation, growth, inequality, and prosperity.” This is of course very important and points to the various roles that the best community colleges can play within their ecosystems. But as you think about the larger landscape of community colleges across the country, are you worried that this might be an unfair set of expectations on all community colleges and that this might lead to some sort of “mission creep”?
Rachel: That's a great question. Look, I think if you talk to people about community colleges, one of the first things that policy types, who are not in the space, will often start citing and throwing around is the low graduation rate statistics. And it's not to say that that's not important, and we shouldn't be focused on boosting them, I'm totally on board. I just find frustrating the notion that the graduation rate metric is the only one that matters. Because if you on the ground to Mississippi Gulf Coast and you talk to people in the community, you see that these institutions mean so much more to their community that can't be just quantified or captured in whether individuals took the sufficient number of credits over a four year period, or sometimes six year metric, to be counted as a graduate. I just think that narrow conception of what success looks like is not meeting the moment for what we need.
And at a moment, I think in the country when there is recognition about the importance of investing in place, where we have regions and communities that have been left behind for decades, we need a new lens for thinking about community college success. And it has to be broader than only saying, well, if more than half of the people don't graduate, then they're failing, and they shouldn't get more money. Because for all of the reasons that we've discussed earlier, I think they're going to be critical to the future of our local economies. And also to our democracy, of people feeling that they have a shot to move up the ladder in this country.
So I don't think it's mission creep. I think we can promote a vision where community colleges see their job ultimately as contributing to shared prosperity that works for more people. We can hold that vision at the same time, and recognize that there's going to be a lot of other players in a community that they'll need to partner with alongside for that journey. But if we only think about their mission in terms of how many students walk across the stage on graduation day, we're missing a huge part of the value that they provide for this country.
Rohan: Yeah, and all of this with concomitant changes in the institutional constraints they face to be able to enable them to actually play this revised and larger role.
Rohan: So, Rachel, final question. What top of your policy wish-list to reform the workforce development space?
Rachel: Ooh, fun question. I Actually think these are exciting times for workforce development policy.
The US still spends 20% of the OECD average on active labor market policies. But it seems like in the last few years, we are starting to self-correct here. A few things I'm looking towards and excited about.
One, beyond vouchers as the exclusive way in which we fund public, we channel public dollars towards workforce development programs instead leaning in place-based policies. Not just one-off competitions, but I'm looking for how do you create more sustainable sources of funding for these economic development education partnerships that are grounded in communities that I think you and I both agree are going to be so important for the country's future?
Second, I guess on my wish-list is just more funding for wraparound supports. Again, we can't just say training alone isn't going to solve the problem we need, we need to help people be able to access to training, navigate healthcare, transportation, all of these things that can get them off the track.
So if we only provide money for education as in a silo, I don't think we're going to get anywhere in terms of the people who can benefit the most. So creating more streams of resources available that prioritize those things. We have a long way to go towards equalizing community college funding per student relative to the rest of the higher ed system, but definitely will put that on my policy wishlist.
And then a fourth is paid work-based learning. There, I think there's really good evidence to show that people are more likely to persist in, complete and successfully transition into good jobs when they have some resources to take care of their life needs, care for family members, while they do it. And at a moment when we're seeing declining enrollment, when we're seeing questions about the value of training itself, things like stipends, models like small apprenticeships where people can earn and learn at the same time, we need both startup funding to get more of those off the ground. And more flexibility around public funds to not be afraid to pay people while they learn.
Rohan: And Rachel, I'm looking forward to this wish list translating into your agenda as you chip away at some of these problems in your new role. Thank you so much for joining us today.
Rachel: Thanks for having me.