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Encourage Institutional Alignment with State and Regional Needs

Encourage institutional missions and capacity to evolve to meet state and regional needs


To increase postsecondary attainment and meet projected workforce needs by 2025, student enrollment and completion must increase. State and system leaders are in an ideal position to think critically about how to expand statewide capacity cost-effectively and better serve 21st-century students. Managing such growth while keeping an eye on costs has already led several states, systems and institutions to rethink mission, capacity and delivery models. In contrast to past expansion efforts focused on institutions and increasing enrollment, future growth must be focused on students and increasing attainment, particularly among nontraditional populations and in less-educated regions of the state (see Lumina Foundation President Jamie Merisotis’ speech to the State Higher Education Executive Officers Annual Meeting, July 2013).

To make this transition, state leaders can examine how existing policy may be creating barriers to cost-effective postsecondary expansion. The following are among the innovative strategies states and systems are considering:

  • allowing two-year institutions with the capacity to expand their offerings to award baccalaureate degrees;
  • creating or expanding an institution to provide a new model statewide, such as online education;
  • seeking and engaging new student populations, such as returning adults with some college credit but no degree; and
  • expanding the reach of regional institutions beyond their traditional service area to an area with significant population growth.

Further, state and higher education leaders can better align postsecondary education and training options with the workforce needs of employers in their states and regions and expand capacity by strengthening connections between traditional education systems and workforce development and training agencies and programs. Toward this end, several states are participating in the National Governors Association Talent Pipeline Policy Academy and the National Skills Coalition State Workforce and Education Alignment Project (SWEAP).


A February 2015 brief by the Education Policy Center at the University of Alabama finds that increases in community college productivity have slowed, completion rates in most states have decreased or remained flat, and budget cuts to higher education are increasing. The brief also cites survey results showing that most states have not created plans for increasing completion and attainment rates to meet future workforce needs. The brief concludes that states need a new, innovative and more cost-effective model for successfully serving increasing numbers of students.

Several states are already expanding capacity using some combination of these innovative, cost-effective strategies and are seeing evidence of the impact. Indiana has employed multiple strategies, first with the creation and expansion of a statewide community college system and more recently with the integration of Western Governors University (WGU) Indiana.

A 2010 study by the National Center for Higher Education Management Systems (NCHEMS) found that several Indiana institutions produced higher levels of performance at a lower cost than their peers. Among them was Ivy Tech Community College, which had the lowest cost-per-degree. Ivy Tech was founded in 1963 as Indiana Vocational Technical College. Its size and mission changed over time, and in 2005 Indiana lawmakers re-chartered Ivy Tech and its 31 campuses to make it the community college system of Indiana. Since then, the system has grown to serve more than 200,000 students each year, making it the state’s largest public postsecondary institution and also its most affordable at $3,500 per year.

WGU Indiana is one way Indiana has increased its capacity to serve more adults, particularly those with some credit but no degree or certificate. In 2010, Governor Mitch Daniels signed an executive order creating WGU Indiana. Since then, WGU Indiana has become financially self-sufficient and receives no state funding. In 2013, it enrolled more than 3,300 working adult students, an increase from 2,684 in 2012, 1,484 in 2010 and 260 when it opened in 2010. Students pay flat-rate tuition of less than $3,000 for each six-month term, and are eligible for state and federal student aid, helping keep costs low. Last year, 619 students received a combined $1.6 million in state financial aid. Among students served, 87 percent are age 27 or older and 72 percent work full-time. WGU Indiana’s completion rate is 40 percent, and 98 percent of WGU Indiana graduates still live in Indiana.

A 2013 brief by Postsecondary Analytics examined state completion colleges—which specifically serve working adults with some prior college credit but no degree—as a strategy for expanding capacity and serving this specific population. The brief looks specifically at four institutions: Thomas Edison State College in New Jersey, Empire State College in New York, Granite State College in New Hampshire and Charter Oak State College in Connecticut. These four institutions collectively increased enrollment 274 percent between 1986-87 and 2010-11. On a cost-per-degree basis, completion colleges have among the lowest expenditures of public four-year institutions. According to the brief, the four colleges studied spend an average of $17,000 to $43,000 for each degree awarded, compared with an average of $67,000 among public four-year institutions in the United States. A December 2014 issue paper produced by Postsecondary Analytics for Lumina Foundation found that if completion colleges expanded to serve the U.S. working age market at the level that Thomas Edison State College has served its New Jersey market, degrees awarded could increase by more than 80,000 per year, or 800,000 within a ten-year period.

State Examples

Each of the following state examples is a policy solution crafted in response to the unique circumstances of the state in which it was formed. As a private foundation, Lumina does not support or oppose any legislation. Lumina provides educational information, nonpartisan research and analysis to advance Goal 2025.


To expand postsecondary enrollment capacity, Arizona leaders created Rio Salado College, a public online institution that is one of 10 Maricopa Community Colleges. Rio Salado was designed specifically to serve the working adult population statewide with flexible online two-year degree and certificate programs. Rio Salado uses technology and a series of partnerships with government agencies, corporations and other educational institutions to offer more than 600 online courses and more than 50 degree and certificate programs. The college now serves more than 67,000 students, only 18 percent of whom are younger than 20. Rio Salado also has the lowest cost per full-time student enrollment of any of the Maricopa Community Colleges.

Similarly, Northern Arizona University (NAU) is the provider of online, competency-based public four-year degree options for the state of Arizona. In 2013, NAU announced its Personalized Learning program, a fully accredited, online, competency-based option costing students $2,500 per six-month term. NAU accepts transfer credits and awards credit for prior learning demonstrated through assessments.


The Illinois Department of Veterans Affairs, the Illinois Community College Board, several community colleges, the Illinois Board of Higher Education and MyCreditsTransfer, have developed an initiative for granting veteran and military students appropriate academic credit for the education and training they completed during their military service. Through the “Making Military Training Count” initiative, veterans and active service members can enter community college with credits that apply toward meeting degree requirements. In addition, Illinois is one of six states selected to participate in the National Governors Association’s Veterans Licensing and Certification Demonstration Policy Academy, which is helping selected states create clear pathways for veterans to obtain state-level credentials for certain law enforcement and health care careers.


Launched in 2012, the Missouri Innovation Campus (MIC) is a collaborative partnership between Lee’s Summit R-7 School District, Metropolitan Community College, the University of Central Missouri and local businesses. This innovative model seeks to reduce time and cost to degree, with students completing an associate degree by the semester after high school graduation and a bachelor’s degree within two years of high school graduation. Throughout the educational experience, students participate in internships and on-the-job training through the partnering businesses. Currently, efforts are underway to take the MIC to scale across the Kansas City region to encompass all of the area K-12 school districts. Additionally, state leaders and policymakers are working to use the MIC as a model to be replicated across other regions in the state.

National Skills Coalition State Workforce and Education Alignment Project

The National Skills Coalition established its State Workforce and Education Alignment Project to create better information systems and tools that will allow leaders to better understand the range of education and training programs and to track students’ progress through them. In a second phase of the initiative, the National Skills Coalition is planning to work with a select number of states to build cross-program information systems, assess the usefulness of the systems for policymaking, and share the information with additional states. Participating states will develop new data tools, encourage their use, and seek policy changes to support additional data tool development as well as career pathways and other strategies for filling skills gaps in the workforce.

State-Branded Western Governors University

Creating a state-branded, state-approved online option by partnering with Western Governors University (WGU) is another strategy for expanding capacity at little cost to a state. Western Governors University is an online, nonprofit, private, competency-based university serving more than 38,000 students from all 50 states. Most of its students are adults working full-time or part-time jobs while earning a college degree. WGU offers fully accredited bachelor’s and master’s degree programs in teacher education, business, information technology and health professions at a relatively low cost. Students pay a flat rate of less than $3,000 for each six-month term. Indiana, Missouri, Tennessee, Texas and Washington partnered with WGU to create a state-approved, online, competency-based option for working adults in their states. There are some initial startup costs, but in the existing partner states it has quickly become self-sufficient, with states providing no state funds. Students in four of the five states are eligible for state financial aid, and all WGU students are eligible for federal student aid.


To help build capacity, Washington is creating applied baccalaureate programs at its community and technical colleges that build on professional-technical associate degrees. These programs provide a clear pathway from an associate degree to a bachelor’s degree for students who are place-bound or cannot find a suitable transfer opportunity at a four-year institution nearby. In addition, the programs are helping fill identified workforce needs. Among the criteria for board approval are requirements that the institution demonstrate demand for the program among both students and employers and that a four-year institution in the same region of the state does not offer the same program.

In 2005, state lawmakers enacted legislation giving the Washington State Board for Community and Technical Colleges (SBCTC) authority to create pilot programs for bachelor of applied science (BAS) degrees at designated community and technical colleges. In 2010, lawmakers passed legislation giving SBCTC the authority to approve new BAS programs and removing the pilot status of the existing programs. By Fall 2014, 15 colleges were offering and had enrolled students in BAS programs and many more programs are under development. According to a 2013 SBCTC evaluation of BAS program outcomes, the programs had grown from serving 77 full-time-equivalent (FTE) students in 2008 to 475 FTEs in 2013, and the number of graduates had tripled from 52 in 2010 to 160 in 2012. Retention rates are high, with participating colleges retaining or graduating 86 percent of their fall enrollment by the end of the academic year. The overall employment rate for BAS graduates in 2010 and 2011, seven quarters after graduating, was 82 percent.

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