New York, NY - December 3, 2009 - “The most successful institutions will not be those that ride out the economic downturn by returning to the status quo,” said Madeleine d’Ambrosio, vice president and executive director of the TIAA Institute, in opening this year’s TIAA Institute conference, “Smart Leadership in Difficult Times.” More than 150 higher education leaders from around the country were gathered for this timely forum.

Colleges and universities will be forced to “focus on enrollment, affordability and fund-raising” added d’Ambrosio, who also cited a Moody’s report predicting the harshest effects of the economic downturn are likely still ahead for higher education.

The result: a “new normal” for colleges and universities, said keynote speaker David Gergen, professor of public service at Harvard’s JFK School of Government and a director of its Center for Public Leadership. Gergen is also editor at large for US News & World Report, and a senior political analyst for CNN.

“For universities the new normal means the budget crunch is not going away,” Gergen said. Seventy percent of all U.S. college and university students go to public institutions using state funding from budgets so stressed that “more than half of the states anticipate deficits for fiscal year 2011,” added Muriel Howard, president, AASCU. “We’re not going to spend our way out of this budget crunch,” Gergen said. “We’re not going to tax our way out of it. We’re going to have to innovate our way out of it as a country.”

Roger W. Ferguson, Jr., president and CEO, TIAA, said traditional options to deal with budget problems are limited. “It’s quite clear that colleges and universities really have just a limited number of levers that they can pull to work through these kinds of economic crises,” he said, “Many of those levers are layoffs, salary freezes, hiring freezes, even benefit reductions. All are clearly necessary, but they are really only going to be helpful in the short term.”

Longer-term solutions, Ferguson suggested, involve creativity and changes in the business model. This includes expanding initiatives such as accelerated 3-year programs. “A number of universities are sharing resources, technology and frankly in some cases even faculty,” Ferguson said. “We’ve seen a number of institutions clearly focusing on their fund-raising efforts. We also see institutions developing new sources of students and revenue with campus facilities overseas and research partnerships with institutions in China, India and the Middle East.”

“We shouldn’t let our governments disinvest in this generation of higher education," said Jane Wellman, executive director, Delta Cost Project. “It’s no less deserving of public resources than my generation was,” she added. As noted by d’Ambrosio, with President Obama’s bold goals for higher education as reflected in a broad array of supportive budget proposals, “The future is now for higher education leaders to determine what’s needed and drive for change.” d’Ambrosio invited the thought leaders in attendance to explore ideas and qualities needed to “effectively lead higher education into a future that we can’t yet even imagine.” Topics discussed included:

  • The summer will be as important as the rest of the year; the traditional four-year college program may become three years, Gergen suggested.
  • Doing away with the 12th grade “which is the biggest waste of time,“ said Charles Reed, Chancellor, California State University System. Resources freed up as a result could be shared between higher education and K through 11 -- paying teachers more and perhaps incentivizing students to come to universities by giving them financial aid or additional financial aid.

Another concept Reed suggested: Evolving into an integrated concept of K-16. Universities and colleges are going to have to partner and engage with community colleges and K through 12 much, much more,” Reed suggested…”way down to the fifth or sixth grade.“

  • Community colleges playing a larger role was emphasized by many. Gergen noted President Obama’s pledge of $12 billion to community colleges with the goal of increasing enrollment.
  • Servering the underserved and creating a "culture of success for students" said Eduardo Padron, president, Miami Dade College. “All a student with just a high school diploma can hope to do is go and flip burgers at a fast food chain and get minimum salary, keeping that person in the cycle of poverty.”

“We can’t be a country that allows that to continue because a degree Is essential for a good job and a high quality of life,” responded William Kirwan, Chancellor, University System of Maryland. “We must as institutions maintain and even increase enrollment and continue to provide access and opportunity at an affordable price, “added Elson S. Floyd, president, Washington State University.

  • Accountability was a prevalent theme. “Universities will find themselves more accountable; one measure of effectiveness could be how many graduates get jobs upon leaving their university,” Gergen mentioned.
  • Online education will continue to play an indispensable role in increasing access to higher education and introducing efficiencies, but finding the right balance between using the Internet to save money and preserving the personal touch so important to quality of education is “the real trick.”
  • Evoloving the idea of a main campus with branch campuses, suggested Michael Crow, president, Arizona State University. Introduce branch campuses that each fill a particular niche and offer different learning environments than the others. Recruit faculty who are drawn to the overarching mission and committed to the specialized focus of the campus. “This is what Arizona State University did and it paid off,” said Crow.
  • Relabeling and refocusing traditional departments such as Political Science, Sociology and Anthropology, instead, creating departments around what a student may do with his or her degree. As examples, Crow mentioned Arizona State University’s School of Sustainability and School of Earth and Space Exploration.
  • Using social media to reach students including Facebook and Twitter is becoming an expectation and must not be ignored, offered Chancellor Reed.

The TIAA Institute Higher Education Leadership Conference is an annual, by invitation-only event, providing senior institutional leaders with the opportunity to explore emerging, strategic, higher education issues. Important information shared during the conference will be posted on the Institute’s web site, www.tiaainstitute.org . The TIAA Institute will also publish a book based on the dialogue, with chapters contributed by presenters and other higher education thought leaders. The book’s editors are David Breneman, professor, University of Virginia, Madeleine d’Ambrosio, vice president and executive director, TIAA Institute, and Paul Yakoboski, Institute Research Fellow.

Photography of the event is available upon request. For a complete agenda and list of speakers, visit: http://www.tiaainstituteconference2009.org

About TIAA
TIAA (www.tiaa.org) is a national financial services organization with $402 billion in combined assets under management (as of 9/30/09) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.

Annuity products are issued by TIAA (Teachers Insurance and Annuity Association of America), New York, NY.

About the TIAA Institute
The mission of the TIAA Institute, part of TIAA, is to foster objective research, build knowledge, support thought leadership, and enhance understanding of strategic issues related to higher education and lifelong financial security. For additional information, please visit www.tiaainstitute.org .

© 2009 Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York, NY 10017.

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