ALEC, Higher Education, and Lumina Foundation – policy, money, and setting the agenda

Yesterday’s Badger Democracy blog, “Scott Walker, ALEC, and the future of the UW System” revealed that one of the key players in higher education policy reform (in Wisconsin and nationwide) is a significant sponsor of the American Legislative Exchange Council (ALEC). Lumina Foundation arose from a $1 Billion student loan sale to Sallie Mae in 2000, and has become the nationwide leader in pushing for higher education policy reform focused on degree attainment. Its primary founder, Ed McCabe was Chairman of Sallie Mae at the time of the sale, and came on board with Lumina to steer its conversion to an Education Foundation.

In its early years, Lumina Foundation was focused on accessibility and community colleges; awarding grants directly to institutions and students – especially in underprivileged/minority populations. In 2007, the focus began to change. McCabe stepped down, and Jamie Merisotis took over as CEO. Merisotis is also co-founded the Institute for Higher Education Policy (IHEP), which in addition to disseminating negative “data” regarding public education effectiveness, also founded the “Global Center on Private Financing of Higher Education.”  Merisotis became CEO on January 1, 2008, and explained the new focus of Lumina:

The movement from philanthropy to state policy – more hands-on than federal – is a useful role for the Foundation.”

According to the 2008 Form 990pf filed with the IRS, Lumina moved into the policy arena with a $300,000 Education Grant to ALEC (linked and referenced in yesterday’s blog). That generosity has continued, with Lumina sponsoring the 2011 ALEC Convention in New Orleans as a “Chairman’s Circle” contributor. In exchange for its generosity, Lumina has been at the fore of the ALEC Education Task Force.  Why the interest in public education on the part of ALEC and private foundations? Jonathan Kozol (Harper’s) summed it up well:

“Some years ago, a friend who works on Wall Street handed me a stock-market
prospectus in which a group of analysts at an investment-banking firm known as
Montgomery Securities described the financial benefits to be derived from privatizing
our public schools. “The education industry”, according to these analysts, “represents,
in our opinion, the final frontier of a number of sectors once under public control” that
“have either voluntarily opened” or, they note in pointed terms, have “been forced” to
open up to private enterprise…From the point of view of private profit, one of these
analysts enthusiastically observes, “the K-12 market is the Big Enchilada”

To Lumina, that “Big Enchilada” extends into higher education. The Lumina agenda, simply stated, is greater degree attainment. The rationale of policy that expedites college degree attainment says that more degrees = more jobs. This is how it is packaged and sold to university system officials desperate to fill state and federal funding gaps; and conservative politicians as they continue to cut and slash public education funding. In his July, 2011 address to the Republican Governor’s Association in Salt Lake City, Merisotis began outlining the plan supporting their “Big Goal” – 60% US adult college degree attainment by 2025.

“You, as a governor, can wield tremendous power in the reform effort. For the rest of my time today, I’d like to suggest some practical, concrete ways for you to use that power.

And, make no mistake, reorientation of our higher education system is sorely needed if we hope to reclaim and maintain a thriving economy.

In short, we need a postsecondary system that is far more productive—one that can move quickly to generate millions more graduates with high-quality, workplace-ready credentials. And again, as governors, there are specific steps you can take to help foster this focus on productivity. In fact, let me list four steps in particular”

Lumina’s “Four Steps to Finishing First ” program lays out a plan to achieve their goal of 60% attainment by 2025. Their method – use business type modeling to “increase productivity” (degree attainment); the assumed outcome of which will be more jobs created. The “Four Steps”:

1. Performance Funding – Don’t fund schools in the traditional budgeting process. Tie funding to performance. Legislators should “provide financial incentives to schools that help students clear certain milestones on their academic journeys or finish work toward their degrees or credentials.” More degrees = more money.

2. Student Incentives – Legislate tuition discounts and incentives to students who do not exceed the number of credits required for graduation. Limit financial aid to the required number of credits for graduation. In other words – better not change your major.

3. New Models – Institute low-cost approaches (specifically online degree programs) “substituted for traditional academic delivery whenever possible to increase capacity.” 

4. Business Efficiencies – Implement business practices that “Produce Savings to Graduate More Students.” Part of the plan to be more “efficient” :

“At the state level, policymakers should limit the number of research institutions…research can be a problem at institutions that aspire to attract research funding, because fulfilling these aspirations can increase costs and reduce productivity in terms of serving undergraduate students.”

“Cut athletic funding – Competitive athletic programs almost always require substantial subsidies from colleges and universities that pull money away from academics.”

“Employee contributions to health care and retirement plans also deserve scrutiny and should be measured against other private sector, competitively established contribution and benefit levels.”

The plan cites The University of Maryland as a great success story in controlling costs…students and faculty experiencing the deep program cuts imposed on that institution may disagree.

It is a vicious cycle – with ALEC and Lumina Foundation at the center. ALEC pushes legislation and policy which imposes draconian cuts to public higher education funding. Lumina lends financial and policy support to the agenda – and positions itself to step in with a “Four Step Plan” to fill the void. Lumina offers a brilliant talking point – “follow our plan, and more people will get college degrees, which means more people will get jobs…because (as everyone knows) people with degrees get hired more than people without.”

While these are lofty goals and wonderful ideals (for education is truly the cornerstone of democracy); with Lumina, the devil is in the details. There is a clear push in this agenda to privatize and take an opportunistic approach to a continuing economic recession (or as Paul Krugman more accurately says, depression). Educational Foundations such as Lumina and the Gates Foundation are taking on a greater roll in developing policy, as opposed to direct awards – and it is having an enormous effect, again, because of the draconian cuts being endured by public colleges and universities.

There are two questions to be addressed…first, what does this outsized financial influence by a select few on public education policy mean, and where are they taking us. And second – will more college degrees, as is the goal of Lumina, create more jobs…

Those questions will be addressed in the next edition of Badger Democracy. Stay tuned for part the third…until then,



One thought on “ALEC, Higher Education, and Lumina Foundation – policy, money, and setting the agenda

  1. Does it seem to you, that the new agenda for these extreme-right republicans is keep the lower class not only poor, but take away public education and keep them dumb too?

    I so appreciate your blog…thank you very much!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s