​Remarks by the Rev. Dennis H. Holtschneider, C.M., at St. John's University in New York

October 26, 2013

 
The U.S. Catholic community has played a strong and formative role in the higher learning of not only the Catholic community, but of successive waves of immigrants, underserved and religiously diverse populations in America.  We now stand witness as the national commitment to funding higher education is eroding and many of these traditional populations find themselves increasingly unable to access higher learning.  What new response is required of us? 

Good afternoon.  It’s a joy to be back at St. John’s.  Thank you for inviting me to speak about a topic I hold dear. 
 
Digressions are generally reserved for the middle of lectures, but, if I may, permit me to spend a moment on Catholic health care before we consider Catholic higher education.  I promise, before long, an actual point will come riding over the hill to save the day.

A SUDDEN MISMATCH OF STRUCTURES TO NEED
One out of six Americans get their health care from Catholic health care.   We are, in fact, the largest private provider of health care in America.  The passage of the Patient Protection and Affordable Care Act – popularly and often derisively known as “Obamacare” – has thrown a significant new question before Catholic health care, and not the question you may think.  Many, of course, are questioning whether Catholic institutions are sufficiently shielded from the Act’s requirements that they provide birth control and abortion services to their employees.  That question is now largely settled with the recent announcement of exemptions for religious institutions that self-certify they are opposed to the provision of such services.  It remains a state-by-state question, but it is no longer the central question posed by the implementation of the Affordable Care Act.
 
Nor is the central question the manner in which our health systems will partner with non-Catholic health systems in order to create rationality and sustainability in regional health delivery systems.  There are many questions to resolve in the development of governance structures that will oversee systems containing both Catholic and non-Catholic hospitals, but those are matters for management consultants, moral theologians, religious congregations and bishops to resolve.  And these questions will be resolved if only because Catholic health care may disappear in the dioceses that fail to resolve them.  In this case, necessity will indeed be the mother of invention. 
 
No, the fundamental question posed by the Affordable Care Act as it interacts with the fast changing health care landscape is whether Catholics should continue to run a large assemblage of acute care hospitals at all.  Let me explain. 
 
Catholic health care grew from women religious who saw a need for community health care that simply wasn’t being provided for the needs of the growing urban communities of America, filled as they were with immigrant underserved families.   The provision of health care was to address a need of charity that had presented itself.  That has continued to be the raison d’etre of Catholic health care over the years, even as hospitals proliferated, as health care systems emerged, and as alternative delivery systems in local clinics, grocery stores and more have made health care ever more convenient.  The need that remained, of course, even as health care became more convenient for some, has been the significant percentage of our population who were not covered by health insurance.  Our hospitals have provided a critical safety net in providing health care to large numbers of uninsured in the nation.  They’ve done so at great financial cost, making our hospitals often highly precarious institutions, but noble ones. 
 
With the passage and implementation of the Affordable Care Act, it seems clear that numerous populations who once went unserved, or at least underserved, will now have health care. 

• Those with pre-existing conditions 
• Those affected by annual limits and lifetime limits
• The mentally ill
• Young people up to age 26 
• Those previously uninsured by their employers
• Those affected by “donut-holes” when it came to prescription coverage
 
Thirty million Americans who went without health insurance will now potentially qualify.  All of these were large sectors of the human family who could not be sure they would be covered. 
 
The government has done this before, of course.  Medicare and Medicaid were instituted to make certain that the elderly and the poorest among us received at least a basic level of health care.  The Affordable Care Act now covers additional groups.  In addition, underserved rural and urban areas will be the beneficiary of incentive payments to doctors who locate and serve in those regions.   And hopefully, the preventive, wellness and community health services required by the legislation will have a similarly positive effect in lessening the need for health care throughout one’s lifetime. 
 
You can join the public debate on whether this is the best use of public funds, but that’s not my argument today.  I’m merely noting what the legislation provides, and by extension, that the gaps of those who were underserved are narrowing.   If Catholic health care is predicated on serving those who are not being served, the Affordable Care Act is a welcome but challenging development to our work as a Church community. 
 
Not everyone is covered, of course.  Even if the Act is fully implemented, 20 million lives on our shores will remain uninsured.  This includes foreign-born and undocumented residents as well as low-wage workers who earn just enough income to fail to qualify for Medicaid and who live in states that have declined to participate in the new ACA programs. [1]  They will continue to need health care, and faith-based charity will certainly play a role.
 
And yet, Catholic health care now has a moment to step back and reconsider its work.  It can wonder whether its assemblage of acute care hospitals and health care systems are focused in a manner that best serves these underserved populations.  Perhaps our hospitals are unnecessary in some regions while needed more in others, or perhaps acute care hospitals are not the most effective delivery system for a population that might benefit more from earlier intervention and community-based care.  Perhaps Catholic health care might choose to make a stronger contribution to end-of-life care, addressing the bewildering irony that 80 percent of Americans would prefer to die at home with effective pain management, and yet 60 percent die in acute care hospitals often receiving every invasive treatment available, 20 percent in nursing homes, and only 20 percent at home. [2] Perhaps Catholic health care might develop a more effective system of pastoral care for sickness and dying that cuts across all platforms, and one does not require the involvement of an increasingly overworked and stretched clergy. 
 
I will leave further analysis of this possible mismatch of “unmet need vs. present structures” to our colleagues in Catholic health care, but my point is made.  It is now a fair question to ask whether or not Catholic health care should continue in the form which we’ve long known.  As the government assumes greater responsibility for the health care of its citizens, the Church now has the opportunity to redirect its charitable and pastoral activity toward those most in need. 
 
It is, at the very least, a fascinating question.

MORE NEED THAN EVER
For U.S. Catholic higher education, the strategic questions are similarly broad and potentially redefining, but the national situation presents an extraordinarily different set of challenges. 
 
Catholic higher education, of course, also grew out of social need.  Women had poor access to higher learning, and it was women religious who provided it in powerful ways that still remain to be recognized by historians of women’s progress in America.  Immigrant groups looked to Catholic universities to provide excellent and faith-based education at an affordable price, as a primary method by which to insert their children into the economic and political mainstream.  (Such is the history of this fine institution.)   In many cases, our institutions welcomed students of color before their local regional institutions.  With great overlap, these institutions served large populations of first-generation students, finding ways to educate those whose families could not afford the more established and expensive institutions.
 
But here, too, government expanded its social outreach and began educating populations that the Catholic community had focused upon serving.   State institutions proliferated and offered subsidized education, very attractive to poorer populations.  Community colleges too provided a local and subsidized education for those who did not have the resources – or the academic preparation – to enter immediately into a baccalaureate program.  Pell grants and other support programs like TRIO programs received generous funds, often funding half the average cost of a public education and a third of the average cost of a private education.  And the government allowed these grant programs to travel to whatever institutions students could enter.   States set up low- rate loan programs, guaranteed them, and subsidized the interest during the college years.  Most states also created scholarships and other support programs that would serve economically challenged students attending in-state private institutions. 
 
In recent decades, however, we have watched the progressive disassembling of this social compact that provided pathways to affordable higher education, particularly for those from families without means.
 
PELL GRANTS.  In 1981, the maximum Pell award would have covered more than half of a student’s annual costs at the average-priced public institution and a quarter of the costs at a private institution.  By 2011, it covered less than a third of public tuitions, and less than one-sixth of a private institution’s tuition.  In short, the value of Pell awards has been cut in half for all students. [3]  
 
Partly this is because the federal government had planned the generosity of their support based on a lower participation rate.  As the economy has shifted toward one that requires higher learning, far larger numbers are seeking higher education, and our government has decided not to fund that level of need.  Partly this is because of the steady increase in the proportion of the federal budget supporting entitlement and defense spending.   But partly, this is also because the cost of higher education is rising at a rate higher than inflation. 
 
LOANS.  For a time, government changed its approach by shifting students’ balance of government aid from grants to loans.  In recent years, we have seen the federal government shift from incentivizing banks to make these loans to bringing the entire loan operation in house through government direct loans.  Done in the name of protecting students from overly greedy banks, in fact, the government had learned how profitable the student loan business was, and began to treat it as a source of income for government purposes rather than as an expense for the public good.   We then watched the administration use the income from student loans  - $5.5 billion in 2012 - to pay for Pell and TRIO grant programs, thereby using students to subsidize other students, something universities with high-tuition, high-aid strategies know well.   This development is, at its baldest, a new source of tax revenue, and a replacement stream of funding for what other tax streams might once have supported. [5]
 
STATE FUNDING.  On top of all this, states have cut both the subsidization of their state universities - forcing them to drastically raise their tuition and fees – as well as the scholarship programs directed to economically disadvantaged students.  Just since 2008 alone, 48 of the 50 states have cut their funding an average of 30 percent per state. [6]
 
At one time, the government argued the wisdom of making a modest investment toward its citizens’ higher education.  It spoke of reaping the rewards of increased income tax revenues and increased businesses and corporate taxes as those businesses located in the U.S. because there was a sufficient workforce here, as well as decreased entitlement costs, prison costs and health costs.  
 
What has happened, however, is the government has now concluded that these goals can be achieved without the level of investment per student that they had once thought necessary.  In short, they learned that they could treat higher education as a private good rather than a public good, but still accomplish a public purpose.  Theoretically, students would still seek higher education for their own sake, so long as students had relatively easy access to loans subsidized during the time of their education.  This way the interest and repayments could be made later when, presumably, graduates had the jobs and income to do so.
 
That has turned out to be true to a point, but not equally so.  For the past ten years, while middle and upper income brackets have seen increased college participation rates, the proportion of the bottom quintile of society who enroll in postsecondary education has been stagnant.  And when they do enroll, they are less likely to enroll in four-year institutions, less likely to enroll in the quality of institution for which they intellectually qualify, and only half as likely to graduate. [7]
 
This is the stuff of social mobility – our “American Dream,” itself.  It turns out that the government was right.  They could maintain and even increase college going while simultaneously reducing the proportion of government grants and shifting the cost toward students using loans.  But they could do so only by reinforcing an uneven playing field for the poor.  It has done so in a time when the percentage of U.S. jobs requiring some level of college education has risen from 28 percent in 1973 to 59 percent in 2008. [8]  The very moment when the lowest economic quintile needs a quality college education the most turns out, cruelly, to be the very moment when it is being made harder for them to achieve.

THE CATHOLIC RESPONSE
So, there’s the interesting difference between the questions facing Catholic health care and Catholic higher education.  In the face of increased government investment in covering the underserved, Catholic health care has the interesting question of whom it will now serve and what services it will provide for perhaps an even needier but smaller number of those who will not be served by government.   As higher education grows ever more important for social mobility and the government decreases the value of its assistance to do so, Catholic higher education encounters more need than ever with fewer resources to deploy to that need.  What should be done?
 
First, let’s admit something upfront.  One simply cannot speak of Catholic higher education as a system.  It is anything but.  This is an unconnected assemblage of 240 independent institutions, often in competition with one another, sponsored by religious congregations that have no history or intention of working together, much less combining their works.  Like health care, we are the largest single provider of private higher education in the country, but that is only because individual wildflowers have bloomed and flourished in multiple places.  It is certainly not the work of the bishops or any centralized body of religious congregations working in concert. 
 
To survive and to provide the quality of education they wish to provide, quite a number of our Catholic institutions have assembled more privileged student bodies able to pay a higher tuition.  This makes sense as Catholics take their place among Jews and Mainline Protestants as among the wealthiest and best educated group in America.  But this too reduces the opportunities for the poor and lower middle classes and fails to meet the level of need within the fastest growing portion of American Catholicism, namely young Hispanics. [9] 
 
Some Catholic institutions have resisted this shift toward higher paying customers, and made themselves somewhat financially vulnerable in the process.  They are generally of small and medium size.  Nearly all are struggling this fall with the Faustian circle of recruiting needy, mission-based populations, while simultaneously recruiting wealthier full-pay students and providing the quality and services that such students expect. They thereby require a net tuition that covers these costs.  Most of them heroically survive on the razor’s edge of quality and mission, and the likelihood of them balancing there for long is increasingly unlikely.
 
Places like St. John’s and DePaul, the two largest Catholic universities in America, have used size as a strategy, assembling a sufficient body of tuition-paying students to be able to support a large number of students who can only pay part of the tuition.  We too skate on the razor’s edge of quality and mission, and we too have to instantly adjust expenses as revenue shifts in any meaningful manner.  But our size gives us more cushion against institutional disaster, and that’s been a blessing. 
 
The challenge with size, of course, is if all the students together feel the “double whammy” of reduced government assistance and reduced family savings since the economic downturn of 2008 (and they do!), then we have a larger gap to fill than most other institutions when it comes to backfilling that need with funded scholarships or unfunded discounts.   It’s a noble mission to serve the poor, but if St. Vincent de Paul’s 80-year-long life was any indication, it never becomes an easy one to fund.  If you serve the poor, you spend your life scrambling to fund the work.  That’s the nature of the commitment. 
 
And the question is larger than how to keep our present institutions afloat.  There are so many more students from the lowest economic strata for whom to provide a meaningful four-year education.  There are so many more Catholics in other regions of the country to be served, where there are few if any Catholic universities nearby to serve them.
 
To be sure, there are some interesting attempts afloat in the Catholic community to address that need:

• The College of St. Benedict just opened a campus in Arizona, the first Catholic university to open in that state. 
• Regis University in Denver has worked hard for many years to provide a Catholic education online for western communities where it just wasn’t practical to build campuses. 
• Colleges in geographic regions where the population has declined are quietly in talks about mergers, such as the recent announcement by St. Bonaventure University and Hilbert College in Western NY.   
• We’ve always had two-year colleges among our Catholic institutions, and two-year degrees within some of our others, but the Jesuits are experimenting with a 48-credit college diploma – not a baccalaureate degree – that they are offering in Africa as a way to provide sufficient higher education at an affordable price to propel people into the careers that are available to them.  Perhaps not everyone needs 120 credits.  Or perhaps additional education can be delivered later on in their careers, as they need it. 
• Many, many of us are turning the focus of our fundraising aggressively toward assembling pools of scholarship money to make up for the loss of government assistance that once helped our students. 
 
What has always been noble about Catholic education is that we have made the decision to maintain quality in what we provide underserved populations.  It’s a terrible business model to create a high-end product for a population that cannot afford a high-end product, but that’s the reason we do it:  namely, to provide a truly life-transforming education for those whose families cannot provide their children with a life-transforming education. 
 
Catholic higher education is about more than charity, of course.  We are in service of the intellectual life itself, and do that through assembling and supporting important departments in many of the fields of study humanity has found of great value.  We also assist the Church’s larger work.  We have: 

• Provided a home for theologians and philosophers, when the rest of American higher education by and large reduced those studies and departments. 
• Created opportunities throughout many disciplines for important conversations of values, conviction and social purpose. 
• Trained ethics professionals for health systems. 
• Trained and certified Directors of Religious Education for parish service. 
• Trained teachers and administrators for Catholic schools and social workers for Catholic Charities and Catholic Relief Services. 
• Educated Catholic students within a Catholic milieu, providing this subset of our larger student body with an “opportunity-for-the-taking” to learn their faith at a more satisfying intellectual level and to encounter actual faith as it is lived within that university community, whether at Sunday mass, retreats, or extensive campus ministry programming, or just in conversation with our full-time resident campus ministers. 
• To the degree that Catholic students took advantage of what we’ve offered them, they have the very blessing of having resources at hand as they passed through the normal adolescent rejection of a childhood faith into something that will support their adult faith life.  (The operant phrase here, of course, is “to the degree that they took advantage.”)
 
Most of our institutions, however, were founded to advance the Church’s social purpose as well as its intellectual and religious purposes.  In challenging times, this too is part of the “mission” that is ours to protect and hopefully even advance.   And so, we have a great deal of work ahead of us.  We could:
 
• Focus our fundraising ever further to keep our social mission true and effective, seeking to offset ourselves what the poor are losing from government. 
• Lobby collectively to keep, rebuild government-funded financial assistance.
• Shift our attention to additional populations and regions with great need.
• Focus more attention on educating the new generations of immigrant Catholics.
• Create a lower-cost product at the higher education level, as Cristo Rey and San Miguel schools have at the secondary level.
• Stop chasing cost-raising prestige in the form of unchecked lessening of teaching load or proliferation of unnecessary doctoral programs, or other ways in which institutions seek to chase the metrics that fuel magazine rankings.
• Ask the religious congregations, as they divest of their patrimonial lands and buildings, to dedicate those resources to this purpose.
• Where our institutions are not likely to succeed, we could sell those lands and buildings and deploy the funds as a foundation for these purposes.
• We could figure out how to better deploy the new electronic tools.
• We could work hard to strengthen a larger social consensus to address poverty at a moment in a young person’s life when they can most easily change their circumstances – their education. 
• Perhaps you have even better ideas.
 
I was walking across the St. John’s campus recently and felt a great deal of pride as I saw the student body you have assembled.  This institution is a blessing for the diverse families of Queens, of New York City, and beyond.  The social mission of the Church is alive and well here.  This is noble work, but even noble work can find itself challenged by prevailing shifts in the social consensus.  The greatest challenge of challenging times is to think beyond saving our own present activity, but to look at the need around us and see what role we might play.  Charity is always an opportunity waiting to be addressed, and human need is always a cry waiting to be heard. 
 
In the end, every age has its own strategic challenges and opportunities.  A charitable heart does what it can as well as it can, and it gives thanks to the God who brings us into his own love and care for his people – as I give thanks today for your own warm welcome back to this very special place.  May God always bless St. John’s University and Catholic higher education more broadly.  May God continue to bless you in whatever work and place you find yourself, and through you, a waiting world.
 
Thank you. 
 
 
[2]Bailey, A, & Periyakoil , VJ. (2013)   End of Life Curriculum Project, a joint project of the US Veterans Administration and SUMMIT, Stanford University Medical School (endoflife.stanford.edu/M15_hospice/where_die_hosp.html).
 
[3] Heller, Donald.  (2013) “Does Federal Financial Aid Drive Up Prices?” American Council on Education, 16.
 
 
[5] Delisle, Jason.  “Putting a Number on Federal Education Spending,” NYTimes, February 27, 2013.   http://economix.blogs.nytimes.com/2013/02/27/putting-a-number-on-federal-education-spending/?_r=0
 
 
[7] Baum, S., Ma, J., and Payea, K.  (2013). Education Pays: The Benefits of Higher Education for Society and Individuals.  The College Board, p. 33-37.  http://trends.collegeboard.org/sites/default/files/education-pays-2013-full-report.pdf
 
 
[9]“U.S. Religious Landscape Survey.” (February 2008).  Pew Research Center, Washington, D.C.: http://religions.pewforum.org/reports, Summary of Key Findings.