Today, U.S. Secretary of Education Margaret Spellings delivered the keynote address at the 2007 Annual Emerging Issues Forum Transforming Higher Education: A Competitive Advantage for North Carolina at the McKimmon Center for Extension and Continuing Education at North Carolina State University in Raleigh, N.C. Following are her prepared remarks:

Thank you everyone for your warm welcome. North Carolina has been a popular destination for me—I've been here seven times since becoming Secretary of Education. Almost as many times as I've been to Texas!

Part of it may have to do with the fact my daughter, Mary, attends college down here. So, you have my personal support for higher education in North Carolina. But it also has to do with your state's long tradition of education excellence. It's a tradition you carry on today with the focus and forward thinking you continue to bring to the issue.

It's hard to believe when this forum started a little over 20 years ago just how different our world looked. Communication was still mostly delivered by snail mail instead of e-mail. Talking about instant messaging; blogging; podcasting would have gotten you funny looks. North Carolina was home to the best college basketball in the country... ok so some things are still the same!

Technology has connected us in ways unimaginable to past generations, transforming the way we do everything from managing a business to buying airplane tickets.

Innovation and American ingenuity has fueled our economy and quality of life. In fact, North Carolina is home to some of our most notable inventions—from the Wright Brothers plane to the Krispy Kreme donut!

Technological advances have opened new doors of opportunity. At the same time, redefining the skills students and workers need to succeed.

As all of you well know, higher education has long been one of the strengths of America. Our decentralized system has empowered students with a wide range of options. It's a system that encourages innovation and adapts to meet many different needs.

But times have changed. Where we once were leaders, now other nations educate more of their young adults to more advanced levels than we do. At a time when more Americans need a degree, we're stagnating. And that has worrisome implications for the future of our students and our country.

Not so long ago, you could get a good job without higher education. But, in today's competitive economy, a college education is becoming a necessity.

Ninety percent of the fastest-growing jobs require postsecondary education or training;

60 percent of Americans have no postsecondary credentials at all;

The earnings difference between a worker with a college degree and one with a high school diploma is almost 40 percent

The U.S. still leads the world in scientific innovation and number of Nobel prize winners, but the rest of the world is catching up. To maintain our competitive edge we must run faster.

That's why I launched my bipartisan Commission on the Future of Higher Education more than a year and a half ago. And as Governor Hunt noted, I did so right here in North Carolina. From business, education and government, leaders like Governor Hunt spent a year looking into the challenges facing our system.

As the Commission found, there are serious issues of accessibility, affordability, and accountability that we must address. Issues that I'm pleased to see you're taking head-on over the next two days.

Frankly, the agenda you've put together for this discussion is one I wish was being replicated in every single state in this country. But as usual, and as North Carolina was in K-12—you're pioneers.

When the Commission released their report this past September, it contained a series of recommendations for how to strengthen higher education. These recommendations have been the starting point for long overdue discussions on how we can improve our system for the 21st century.

Implementing these recommendations falls not just to the federal government. Strengthening higher education is a shared enterprise and I'm pleased to see how much forward progress is being made in states and college systems around the country.

Again, North Carolina is leading the way. Already taking action on issues from high school reform to making college more affordable.

Among the Commission's recommendations were also those tasked specifically to the federal government, and I'd like to share with you an update on our progress.

First, accessibility. The problem of access begins in our nation's high schools where every year:

About a million students drop out;

Half of all African-American and Hispanic students don't graduate on time;

Less than half of all graduates are prepared for college-level math and science.

As a result, colleges, students, and taxpayers spend over a billion dollars a year on remedial education just to teach students the basic skills they should have learned in high school. In response to the Commission's recommendation, we're working to increase academic rigor in our high schools.

The President recently released his No Child Left Behind reauthorization proposal—Building on Results. It will require states to have their K-12, higher education, and business communities join together to develop high school academic standards and assessments that are more in line with the needs of colleges and the workplace.

Our proposal also builds on the work of our nation's governors and calls for a more accurate graduation rate measure. North Carolina is to be commended for their willingness to talk straight about their four-year high school graduation rate. Last fall, the state agreed to make public its National Governors Association-endorsed graduation rate. Building on Results calls on all states to take the same step as North Carolina, and put real accountability for high school graduation into our schools.

On affordability. Many of you probably have sons and daughters in college, so you understand the real issue of tuition sticker shock.

Over the last 25 years, college tuition increases have outpaced inflation, family income, even health care.

In the past five years alone, tuition at four-year colleges has skyrocketed by 35 percent.

Young people are starting out in life saddled with debt—making it difficult to start a family, buy a home, plan for the future, or even continue their education.

As the Commission noted, the entire financial aid system is in urgent need of reform. At the federal level, it's a maze of 60 websites; dozens of toll-free numbers; and 17 programs. Just to give you a comparison the main federal student aid form is longer and more complicated than the federal tax return!

That's why we are working to streamline the process, cut the application time in half and notify students of their aid eligibility earlier than Spring of their senior year to help families plan.

The reality is as costs skyrocket it becomes increasingly difficult for middle class families to afford college. And for low-income, mostly minority students, college is becoming virtually unattainable. States, institutions, and the federal government—we all must increase need-based aid. The President aims to do just that.

When he unveils his budget next week, the President will call for the biggest increase to the Pell grant program in over 30 years. He proposes raising the grant by $550 next year to $4600. And then over the next five years by an additional $800 to a maximum of $5400 for each student. Real money that will help more low-income kids realize the dream of a college education.

Now, money is important, but we're going to keep chasing our tail on price until we realize that a good deal of the solution comes down to information.

Like any other investment or enterprise, we need meaningful data to better manage the system.

Which brings me to accountability.

In almost every area of our government—from prescription drug programs to welfare to K-12 education—we expect transparency and accountability for our tax dollars.

But over the years, we've basically invested tens of billions of dollars in taxpayer money in higher education and just hoped for the best. As a result, we don't have a very good picture of how the system works today and how it could be improved.

We live in the "Information Age." If you want to buy a new car, you go online and compare a full range of models, makes, and pricing options. And when you're done, you'll know everything from how well each car holds its value down to wheel size and number of cup-holders.

That same transparency and ease should be the case when students and families shop for colleges—especially when one year of college can cost more than a car!

Better information will help parents plan and prepare. And it will also help policymakers and college administrators do a better job serving our most important clients—students.

President Bowles put it best when he said, "Higher education has gone on for too long without the appropriate accountability." He's announced his commitment to implement a campus-level accountability system, with expectations of annual improvements in graduation rates and student learning outcomes.

Measuring student learning and performance is a complicated issue but it's systems like North Carolina, Texas, and California that are taking it on and providing great examples for how it can be done.

At the federal level, we're doing our part. I recently convened the accrediting community and emphasized that student learning and achievement must be the core priority and requirement for accrediting an institution. Accreditation is an important tool we must use now to encourage improvements and ensure quality.

While, I've given you a run-down of our efforts at the federal level, the truth of the matter is that many of the recommendations require the leadership of stakeholders that don't work in Washington.

In March, I'm convening a Summit to further discuss the Commission's recommendations. One of the main purposes is to create ownership and accountability across all sectors including higher education governing boards, government, business, institutions, and states.

North Carolina will be an important partner at the table—literally—since I'm pleased to announce that President Bowles has agreed to serve on the Summit's steering committee.

I'm looking forward to our continued efforts and progress on this vital issue. Working together we can ensure higher education remains the path to the American dream and that more Americans have access to it.

Thank you. I'm looking forward to our discussion and am happy to answer your questions.

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