The traditional organizational and funding model for public higher education is broken.

Under increasing pressure to fund many important areas, states are simply unable to continue the historic level of support for public higher education. The old state model of direct operational funding to institutions and regulated tuition levels is an inefficient way to direct public funding. At the federal level, which primarily provides needbased financial aid directly to students, reducing the deficit will most certainly mean further cuts.

The challenge in this permanently changed environment is, in fact, liberating. It presents an opportunity to rethink higher education policy and answer the question: How do we make the investment by our students and public as powerful and transformative as possible?

If we don’t make significant changes as we respond to the deep higher education funding cuts that are driving tuition increases, we risk squeezing out the middle-class students that a public university such as UNC serves. These are the students who are not so in need of assistance that they can rely on federal grants, but who are not in a position to pay the full sticker price, either. These are also the students who disproportionately rely on loans to finance their education.

It’s wasted energy for us to keep repeating the mantra that higher education just needs more money. On the other hand, it is unreasonable to assume we are selfish, wasteful institutions that need to be regulated to keep us from being unfair to students. The truth lies in between. We must target our public investment to focus on financial aid for students — to foster not only access to higher education, but also student success and graduation.>

I believe we must continue to focus on three critical things, which the UNC community embraces:

• Degree completion. The real issue is what the public gets for its investment in higher education. This outcomes-based approach is valid as long as we are talking about meaningful, high-quality degrees that graduates earn through a transformative education. A UNC degree means a lot more than particular competencies. Sure, we want our teacher candidates to ace their licensure exams, and we want our business and accounting students to do fabulously well on national tests, but we expect more from our graduates. And, quite frankly, you expect more of us. So it is not enough just to increase the number of degrees — we must increase the number of students who earn degrees that prepare them for work, life and responsible citizenship.

• State investment in need-based financial aid for students. Without it, public universities will face serious constraints on the number of low- and middle-income students we can serve. It’s not just about the future of the individuals. In the long term, states will feel the effects of disinvestment — for example, with fewer graduates in high-need areas, such as education and nursing. An important part of UNC’s budget planning has focused on how we can allocate more institutional dollars to financial aid.

• Institutional flexibility. At UNC, we accept the challenge of providing a public return on> investment. And we are working to respond to this challenge with the same creative, inventive,> entrepreneurial spirit that we work to instill in our students. The collective effect of decades of legislation based on the assumption institutions will be irrational and waste the state’s money is paralyzing to any real attempts to reinvent higher education.

As institutions, we need to forge a new kind of partnership with the citizens of states. UNC has> launched this effort in the state of Colorado. This partnership is the antithesis of bureaucracy and> command-and-control regulation. It requires a willingness from both of us to take risks (and sometimes even to fail), a tolerance for ambiguity, and a commitment to genuine and open communication about what is and isn’t working.

Together, we are smart enough and courageous enough to take control of our own future.

— Kay Norton is in her 10th year as president of the University of Northern Colorado