Ethics & Public Policy Center

2015 Bradley Symposium: Remarks by Mitch Daniels

Published in 2015 Bradley Symposium on July 6, 2015


EPPC

“The Future Of Higher Education”

The Future of the American University

The Four Seasons Hotel, Washington, D.C.

June 3, 2015

Speaker: Mitch Daniels, Purdue University

Mitch Daniels

Mitch Daniels

Mitch Daniels:  It is with great gratitude that I accept any invitation that has the name Bradley attached to it, and I feel that same sense here today.  I’ve been so fortunate and so proud over a long period of time to be associated in different ways with this tremendous institution.  And its contributions to our public life and to the life of its state are unmatched and I just thank everybody, if only for the chance to say hello once again to old friends. I am thrilled to be here.

I’m surprised to be here in the sense that I’m surprised to find myself doing what I am doing now.  I never saw it coming.  And every day brings its own surprises.  I was not the only one surprised.  A good friend of mine in New York City on the day it was announced went home and said to his spouse, “Well, did you hear what Daniels is going to do next?”  She said, “No, what?”  He said, “He is going to be a President of Purdue.”  She said, “That is just terrible.”

Laughter

He said, “Well, really, I think it is kind of cool.”  She said, “His talents will be totally wasted in the chicken business.”

Laughter

But that is New York.  It has been an adjustment in many, many ways.  The one that comes to mind most is one has to adjust to the slower clock speed at which red lights stop. I served a sentence or two in the Federal Government so this was not new experience, but early on it brought to mind an old joke which I’m glad came back to mind.  We were having a conversation, I don’t even remember the subject matter, one of the faculty members present made a really good suggestion.  I said great, that is terrific.  Let’s do that.  How long will that take?  And they huddled up for a minute and they said six months.  I said six months, I was thinking next Wednesday.  And all of a sudden I remember this old line which is that a turtle is mugged by a gang of marauding snails and when the policeman gets there and says, “Who did this?”  He said, “I don’t know Officer — it all happened so fast!”

Laughter

And at a time when change is in order in higher ed and urgently needed in certain ways, one of many tests will be whether this in many ways reactionary institution, ironic to think of universities in that way but in many ways they are, will be able even if it sees the way forward to make adjustments and break new ground fast enough to stay ahead of the challenges which you’ve all just pointed to.

Now it struck me — sometimes when I go around and give the lazy man’s speech and I bring some slides.  You are more fortunate today but sometimes when I do the first one I throw up is this grainy black and white picture, this nerdy looking fellow, who knows who this is.  And no one ever does.  This crowd actually would have known.  It was Joseph Schumpeter, because when I think about the challenges of higher ed, and a lot of really more learned people come to the same conclusion, they see the very same process that we are now so familiar with in other sectors of life the creative destruction, the overtaking of the incumbent business or industry by a new innovation, by new technologies or perhaps new business models.  There is every reason to believe that higher ed is next in the gun sights following so many examples that you are probably thinking of right now.  And, you know, so be it.

Most of the theory I think rightly focuses on things you are going to hear about and, therefore, I will leave to people more expert.  But clearly new technology is menacing this millennium old model that we’ve been using.  The now worn out phrase is ‘sage on the stage’ but it is pretty apt really.  And I’ve told my colleagues at Purdue if we are going to be around in 20 years among other things we are going to have to pass the pajamas test which is to say there are a lot of very smart people backed by a lot of very big money who are already telling students or potential students what do you want to pick up and move somewhere for at enormous expense for four years or more when I can bring the best professors in the world right into your living room, sit there in your bathrobe and get it on the cheap.

And I think there are a lot of questions around that but it is clearly going to be the right answer for many students or for people at different stations or points of life.  And the residential model we’ve known is going to have to respond to that.

I’ll spend a little more time on the second set of threats which I would loosely categorize as to the business model that has been operating, and I’m sure Andrew will enlighten you much further.

But when I arrived at my new post we were really on the brink of biennial tuition decision.  I got there in January and we had to submit something really within a couple of months.  I didn’t have time and given the purposely opaque way people in higher ed keep the books —

Laughter

— it would have taken all my time for the rest of my life to really try to penetrate.  But I had a suspicion and an intuition and I persuaded our board that we should act on it and that was that after 36 straight years of increases we ought to call a halt and see if we couldn’t operate at a flat level of tuition for at least a year or two.  And use the expression why don’t we instead of asking our students and their families to adjust their budgets to our preferred spending, why don’t we adjust our spending to their budget, see how that works.

It turned out not to hard to do.  And in fact we’ve extended it and we just announced that for the fourth year in a row tuition will not change at Purdue University.  We’ve also reduced the cost of room and board in two five percent increments and I think there is more to be done there.  The total cost of attendance at our school is down for the first time since the records were kept.  And in probably the best measure, at least the one I like to look at, the most total student debt is down 18%, which is $40 million less than our undergrads have borrowed at this point than two years ago.

So all this while we’ve been able to make new investments, significant investments in the vital work of our university.  So, when I think back to 2013, when I said how about we freeze this increase, the tuition, the admissions people were very concerned.  They said huh, everybody else is going to raise it which they did and if we don’t it might signal a lack of confidence in our product.

Laughter

I said you know I think I am willing to take that chance.

Laughter

Because number one I think this is the right thing to do and let’s try to do it.  Number two everything about my marketing sense says that this phenomenon has got to stop, you know, Herb Stein.  And why don’t we get off the escalator before it breaks.  And we did and I’m glad we did.  And I think it has panned out well.

I can tell you that, contra their apprehensions, we had record applications last year and another record this year.  It went up 14% at a time when our peer group if they had any increase at all was in the single, low single digits.  And so there is no question in my mind if there was a time and I guess there was when in the absence of evidence another important change that has to come is accountability, just as the K-12 system violently resists accountability or any measurement of performance.  Ditto for higher ed.  But at these prices people are beginning to say: “Wait a minute, what am I getting?”

And so we are approaching higher ed from the standpoint that one does almost everywhere else in life and that is to emphasize the basic equation of life should apply there too, quality divided by price.  And we are working on both ends of that.

Will we have to modify the way things are taught?  Sure.  And we are pressing ahead as far as possible.  Increasingly the students on our campus will be taught in new modern ways.  Very few of them in a few years will experience what most of us did, two lectures and a lab or the equivalent.

We believe at Purdue strongly in teaching what matters most and teaching it rigorously.  I love to tell audiences like this but I also love to tell our incoming freshmen they have come to a school that sat out the great inflation phenomenon.

Somebody tallied all this up recently and produced a sweet 16 of tough schools, rigorous schools based on average GPA and it dubbed us a number one seed.  I think if that were ever a deterrent it is not anymore.  I think that you are seeing for the first time large numbers of students, highest record percentages pass over their first choice that accepts them to a second or third choice and the reason is almost always cost.

When I meet with the parents of freshmen or just encounter them touring the campus or something I usually say the same thing: our goal here at Purdue University is if your son or daughter comes here and applies herself she will not move back in your basement.

Laughter

This is a sure fire winner by the way.

Laughter

It is my number one recruiting technique.  We can talk later on if anyone is interested about all the things we are experimenting with, new modes of teaching and so forth but I guess for these opening comments I just wanted to center on this concept of value.  And to say that I think there is strong evidence now that the world we’ve known in which again in the absence of evidence people associated a higher sticker price with quality has fallen away.  Maybe you saw there has been a 30 point drop in four years in the percentage of Americans — I think this is alarming by the way — who say that a college degree is “very important”.  Rarely seen public opinion move that far on any question, and I hope it is temporary, because that would be a very dangerous conclusion for a majority of our fellow citizens to reach.

I’ll just tell you I’m proud to be associated in higher ed even if I didn’t see it coming.  I’m really proud in particular that we are a land grant institution.  Those things you’ve all talked about are close to the heart of the land grant assignment.  Schools like ours — some of you thought we were a private school, didn’t you?  Thank you John Purdue for your ego, which kept us from being Indiana State or something.

Laughter

Abe Lincoln and his allies put universities like ours in our state and yours for the noblest of reasons: to throw open the doors of education and higher education beyond the elites and the privileged few, and these schools were instructed to teach those things, not exclusively, but to teach them with priority those skills and those disciplines most likely to lead to a flourishing, growing middle-class nation that would support economically and politically the survival of free institutions.

If that was ever an important assignment it seems to me it is today.  And I am just very grateful to have been given a chance to pursue it a little bit at one institution.

Thank you very much.

Applause

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