In 1963, Clark Kerr stood in a lecture hall at Harvard University and spoke about the eternal constancy of higher education. Kerr, who was president of the University of California at the time, noted that "about 85 institutions in the Western World established in 1520 still exist in recognizable form"—the Catholic Church, the parliaments of Iceland and the Isle of Man, a few Swiss cantons, and 70 universities. "Everything else changes," he remarked, "but the university mostly endures."

Today's colleges and universities are plagued by a host of problems that have proven as lasting as the institution of higher education itself: At a time when college degrees are increasingly a prerequisite for middle-class wages, less than 40 percent of college students are able to demonstrate proficiency on literacy tests, barely half of college students graduate on time, and many don't graduate at all. Meanwhile, the price of college is growing by leaps and bounds. To address these problems, colleges and universities need to pay far more attention to the core task of educating their students well.

But higher education has surprisingly few incentives to provide an affordable, high-quality education to all students. Funding is based on how many students enroll, not how many graduate. Prestige is tied to how smart students are when they begin as freshmen, not how much they learn before they leave. Fame, wealth, and research prowess contribute far more to institutional status than student learning. If these incentives don't change, colleges won’t change either. As a result, policymakers who want to fix the many problems of American higher education need to gather much more information about college student outcomes, release the results to consumers and the general public, create explicit, mission-driven performance goals for institutions, and financially reward colleges and universities that excel. In other words, policymakers need to create stronger accountability systems.

In September 2006, the bipartisan Commission on the Future of Higher Education sponsored by U.S. Secretary of Education Margaret Spellings lamented low college graduation rates and rising student costs before going on to say:

"Compounding all of these difficulties is a lack of clear, reliable information about the cost and quality of postsecondary institutions, along with a remarkable absence of accountability mechanisms to ensure that colleges succeed in educating students."

After the report was released, the U.S. Department of Education pushed to gather more information about college outcomes and improve oversight of student learning results through the college accreditation process.

But if colleges are going to be held accountable, states will have to carry most of the load. When it comes to higher education, states have most of the money and most of the power—about three-quarters of all undergraduates are educated at public two- and four-year institutions. States provide over $100 billion per year to public universities and community colleges, making them by far the largest governmental source of higher education operating funds. Governors and state legislators appoint the trustees and governing boards that run public institutions. States also charter private nonprofit colleges and universities.

In 2008, Education Sector conducted a comprehensive analysis of state higher education accountability systems. We examined thousands of documents and analyzed Web sites, laws, and policies in all 50 states, Puerto Rico, and the District of Columbia. For each state, we worked to answer two fundamental questions: 1) What kind of information does the state gather about its colleges and students? 2) How does the state use the information it gathers to make colleges and students more successful?

The results were both hopeful and sobering. On the plus side, states are collectively gathering a great deal of valuable information. Some have developed innovative methods to measure student progress in learning, graduation, and success in the work force. Others are carefully tracking the way colleges are distributing financial aid to low-income students. From research output to student engagement to economic impact, states are accumulating more information about more things in higher education than ever before.

But no state is gathering all of the information that is potentially available, and few even come close. Best practices often exist in isolation, with a handful of states tracking important outcomes that most states ignore. If each state simply used the best metrics developed elsewhere, it would be able to paint a comprehensive, multidimensional picture of how well its colleges and universities are succeeding. But no states are doing this, and some do almost nothing at all.

When it comes to translating accountability data into strong incentives that influence institutional behavior, few states follow through. Some states link funding levels with student outcomes, set specific performance goals for higher education leaders, and empower prospective students with information to use in choosing colleges. But most states simply gather accountability information and make it available without any clear plan for making it meaningful. Unsurprisingly, it often means far less than it should.

Given the long history of resistance to change in higher education, it will likely take the best of everything in state accountability systems to really make a difference—all of the latest measures, reflecting the breadth of higher education's diverse mission, carefully gathered and utilized in a system of multiple, interlocking incentives. Only then will today's students get the colleges and universities they need.

This report describes the current state of the art in state higher education accountability and concludes with a set of guidelines for designing a model state higher education accountability system. …Read the full report: Ready To Assemble: A Model State Higher Education Accountability System. (Due to the size of the report, downloading may take a few minutes.)

Education Sector thanks Lumina Foundation for its support of this project. Lumina Foundation for Education is an Indianapolis-based, private foundation dedicated to expanding access and success in education beyond high school. The views expressed in this report are those of the authors and do not necessarily represent those of Lumina Foundation for Education, its officers, or employees.