The Three-Year Solution

Hartwick college, a small liberal-arts school in upstate New York, makes this offer to well-prepared students: earn your undergraduate degree in three years (six semesters) instead of four, and save about $43,000—the amount of one year's tuition and fees. A number of innovative colleges are making the same offer to students anxious about saving time and money. The three-year degree could become the higher-education equivalent of the fuel-efficient car. And that's both an opportunity and a warning for the best higher-education system in the world. (Article continued below...)

During the 1960s the United States made almost all of the world's best automobiles. Detroit's Big Three—Ford, Chrysler, General Motors—sold more than 80 percent of cars in the United States. Yet that domination had its own intrinsic risks.

In The Reckoning, his chronicle of the American auto industry's troubles, the late David Halberstam wrote about George Romney, the square-jawed, upstart president of American Motors who saw the Big Three as a "shared monopoly … musclebound and mindless in the domestic market—increasingly locked into practices that their best people knew were destructive but unable to break out of so profitable a syndrome." Romney warned, "There is nothing more vulnerable than entrenched success."

We know the rest of the story. The Big Three kept producing gas guzzlers while the Europeans and Japanese perfected smaller, fuel-efficient cars. Some of Detroit's best people even left to help. Ford vice president Marvin Runyon's team moved to Smyrna, Tenn., to build Nissan's start-from-scratch plant. Fifteen miles away, in Spring Hill, General Motors invested $5 billion in Saturn, hoping side-by-side competition would help the Americans beat the Japanese. But GM was still too musclebound. Meanwhile, Nissan's liberated managers and nonunion employees operated the most efficient auto plant in North America. Today, American taxpayers are bailing out GM and Chrysler, foreign competitors make most of the world's best cars, and the Big Three account for less than half the cars sold in the United States.

American higher education could learn from Romney's warning to the Big Three a half century ago. The United States has almost all of the world's best universities. A recent Chinese survey ranks 35 American universities among the top 50, eight among the top 10. Our research universities have been the key to developing the competitive advantages that help Americans produce 25 percent of all the world's wealth. In 2007, 623,805 of the world's brightest students were attracted to American universities. Not long ago, a few Senate colleagues and I had supper with former Brazilian president Fernando Henrique Cardoso, who was completing a year as scholar-in-residence at the Library of Congress. One senator asked Cardoso what memory he would take back to Brazil about his time in the United States. "The American university," he replied. "The greatness and the autonomy of the American university. There is nothing in the world quite like it."

Yet, as with the auto industry in the 1960s, there are signs of peril within American higher education. It is true that the problem with car companies was monopoly, whereas U.S. colleges compete in a vibrant marketplace. Students, often helped by federal scholarships and loans, may choose among 6,000 public, private, nonprofit, for-profit, or religious institutions of higher learning. In addition, almost all of the $32 billion the federal government provides for university research is awarded competitively.

But as I discovered myself during my four-year tenure as president of the University of Tennessee in the late 1980s, in some ways, many colleges and universities are stuck in the past. For instance, the idea of the fall-to-spring "school year" hasn't changed much since before the American Revolution, when we were a nation of farmers and students put their books away to work the soil during the summer. That long summer stretch no longer makes sense. Former George Washington University president Stephen J. Trachtenberg estimates that a typical college uses its facilities for academic purposes a little more than half the calendar year. "While college facilities sit idle, they continue to generate maintenance, energy, and debt-service expenses that contribute to the high cost of running a college," he has written.

Within academic departments, tenure, combined with age-discrimination laws, make faculty turnover—critical for a university to remain current in changing times—difficult. Instead of protecting speech and encouraging diversity and innovative thinking, the tenure system often stifles them: aspiring professors must win the approval of established colleagues for tenure, encouraging likemindedness and sometimes inhibiting the free flow of ideas.

Meanwhile, tuition has soared, leaving graduating students with unprecedented loan debt. Strong campus presidents to manage these problems are becoming harder to find, and to keep. In fact, students now stay on campus almost as long as their presidents. The average tenure of a college president at a public research university is seven years. The average amount of time students now take to complete an undergraduate degree has stretched to six years and seven months as students interrupted by work, inconvenienced by unavailable classes, or lured by one more football season find it hard to graduate.

Congress, acting with the best of intentions, has tried to help students with college costs through Pell Grants and other forms of tuition support. But some of their fixes have made the problem worse. The stack of congressional regulations governing federal student grants and loans now stands twice as tall as I do. One college president lamented to me that filling out these forms consumes 7 percent of every tuition dollar.