President Barack Obama cited the importance of improving the higher education system in order to make the 21st century the “American century” in a conference call with student journalists Monday.

“We have fallen behind,” Obama said. “In a single generation, we’ve fallen from first to 12th in college graduation rates for young adults. And if we’re serious about building a stronger economy and making sure we succeed in the 21st century, then the single most important step we can take is to make sure that every young person gets the best education possible — because countries that out-educate us today are going to out-compete us tomorrow.”

Inflation in the cost of higher education, Obama said, is the only area in which inflation is higher than health care inflation.

Health care and personnel costs were cited as a contributor to higher education cost inflation. Obama touted the Affordable Care Act health care reform bill as a solution to this. However, Obama identified additional inefficiencies in the design and costs of universities.

“I’ll just give one example, which people may not want to hear,” Obama said, “but when I go to some colleges and universities, public colleges and universities, and I look at the athletic facilities that exist these days, or the food courts or the other things that have to do with the quality of life at universities, it’s sure a lot nicer than it was when I was going to college. Somebody has to pay for that.”

Obama expressed concern that these amenities take focus away from the primary goal of education, while raising tuition costs for students. He said his administration will work with university presidents and college presidents to “figure out how can we get control of costs generally and refocus our priorities and our attention on what the primary function of a university is, and that is to give students the knowledge and skills that they need to have a fulfilling career after they get out — not to provide the best situation for the four years that they’re there.”

Graduation rates were a concern addressed by the president, as he said more than one-third of American college students — and more than half of the nation’s minority students — do not earn a degree, even after six years. Many of these students rack up debt, and without a degree, they are not equipped to overcome their debt.

In addition to graduation rates, the administration plans to focus on ensuring that colleges properly prepare students for the workforce. 

“Community colleges are going to play a critical role in getting there,” Obama said, adding that Jill Biden will hold the first-ever White House summit on community colleges, which will take place Oct. 5.

Regarding job creation, Obama said there are still jobs in a “tough environment” for those with college degrees and skills in math and science or “good, sound communication skills,” adding that nine out of 10 people looking for work can still find it.

“If you think about it,” Obama said, “what we called ‘the greatest generation,’ my grandparents’ generation, they had a situation where unemployment reached 30 percent and they ended up essentially building the entire American middle class to what it was and making this the most powerful economy in the world. So right now we’re going through a tough time, but I have no doubt that you guys are going to be successful.”

The key to creating a workforce with room for college graduates, Obama said, is improving the economy. He mentioned investing in small businesses, helping large businesses, building infrastructure and investing in clean energy as ways to “open up new opportunities.”

Obama ended the call with a message of hope, much like his campaign in 2008.

“I know we’ve gone through a tough time these last two years,” Obama said. “And I do worry sometimes that young folks, having grown up or come of age in difficult economic times, start feeling as if their horizons have to be lowered and they’ve got to set their sights a little bit lower than their parents or their grandparents. And I just want to remind people that you guys all have enormous challenges that you’re going to have to face, but you continue to live in the most vibrant, most dynamic, wealthiest nation on Earth.”

He urged young people to work together as a generation to solve problems that he said are inherited but solvable.

“There’s no reason why the 21st century is not going to be the American Century just like the 20th century was,” Obama said. “And there’s still billions of people around the world who want to come here, and they want to come here because they know that this is, for all our problems, still the land of opportunity.”