What We Need to Hear from the President

August 24, 2013 | Blog

Reviewing the range of responses to President Obama’s plan to reduce college costs, and the questions that are being raised on Twitter, it seems important that the Administration clarify a few things sooner rather than later.

1. This effort to reduce college costs is a first step and thus it is not intended to solve all problems.  The President should say something more specific about the ultimate goal and what it would look like in practice. Are we working towards a free community college education? Are we trying to close achievement gaps?  What is the intended outcome down the road?

2. This is not NCLB for higher education.  The President needs to assure the public that he is not calling for standardized testing, the end of professorial tenure, or a focus on specific fields or majors.  He is trying to help more Americans access the quality post secondary education they seek, not water down quality or redefine what matters.

3. This is an effort to protect public higher education, not destroy it.  This needs to be said loud and clear, and the President’s commitment to community colleges in particular must be emphasized.  Too many community college leaders are distressed at the roll-out of these plans, and I did not think that was intended.

4. This is also not an attempt to end for-profit or private higher education.  The purpose is to ensure that Title IV is spent in ways that support national needs, not to define the entire range of opportunities that can exist.  It is certainly possible to support private and for-profit educational providers without insisting that the federal government should also subsidize them.

5.  The President is not insisting that everyone must go to college-– he is  trying to help make the American Dream a reality by decoupling family income from educational opportunities.

Now, if I’m correct that these are all statements the President and his Administration can agree with, let’s move on to figuring out how to take aim at the underlying inefficiencies in the current financial aid system using institutional accountability.

I think it would be a mistake to subject all institutions to metrics anytime in the near future. Most colleges and universities are good actors, keeping college costs down as long as states do their part. What we need to do as a starting point is to get a handle on (a) the bad actors and (b) federal investments that are ineffective and unnecessary.

Which schools fall into those categories? Here’s a start.

BAD ACTORS

1. Institutions whose primary revenue source is Title IV.  Let’s say those who get at least 75% of funding from Pell and/or student loans, for example.  These schools aren’t operating based on market demand but rather are propped up by federal aid.

2. Institutions with selective admissions (say less than 75% admitted) and low average graduation rates (less than 50% over 5 years).

INEFFECTIVE, UNNECESSARY INVESTMENTS

1. Institutions with large endowments per student.

2. Institutions serving very few Pell recipients (regardless of whether this is due to admissions practices, costs, or a decision to simply be small).

If we could ensure that federal student aid no longer supported these schools, we would see fewer students attend these schools, their prices would likely fall (or they would close), and/or at minimum we’d save money that could be spent elsewhere.

If that were the first stage, then the Department of Education could begin by publishing these lists of problematic schools, issuing a warning that they have three years to get off the list or lose Title IV.

The other big issue is how to get states back to the table.  There could be a separate list of states that are put on probation based on a failure to match federal investments in higher education with state investments.  All colleges and universities in those states should be put at risk of losing Title IV– including the privates and for-profits– and given 5 years to address the problems.

None of this is perfect, of course, but they get us thinking about a more targeted, incremental approach to reform.  What do you think? What would you include?

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