We can’t address higher education’s challenges without innovation

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Feb 8, 2018

College, we can’t afford you. Tuition at many of America’s top schools now tops $50,000, living expenses easily add another $15,000, and course materials and transportation push the costs even higher. Millennials are so overburdened with debt they are saving nothing, and delaying having children, getting married, and buying houses. As the economy becomes more turbulent and oriented toward high-skill jobs, higher education is more important than ever before—but for millions of Americans, it’s also never been more out of reach.

There are a few ideas on the table to address the issue. One that’s unlikely to work is free college. In the last election, Democrat Bernie Sanders gave voice to the concerns of indebted millennials and called for free tuition, a policy later adopted by Hillary Clinton. While free college proposals do stand to make college more accessible in the short term, it’s at best a bait-and-switch solution. Having states or the federal government write the check takes the burden off of students and parents—until they get their tax bill.  Nothing in free college proposals addresses the underlying drivers of costs in higher education. We need a higher education system that we can afford.

Another (even worse) idea, proposed by colleges themselves, is that Congress allow schools to cooperate to set tuition prices and financial aid policies. (These types of activities are also known as price fixing and collusion.) The unlikely claim of the National Association of Independent Colleges and Universities is that allowing collusion would lower tuition, especially for low income students. This is laughable, not least because a group of 23 colleges already has such a waiver, and has seen tuition rise faster than other schools. Anti-trust laws are in place to help consumers—in this case, students and their families. It’s unclear what collusion would do to halt the run-up in costs inherent in the current business model of college.

Beyond the bad ideas

But while free college and collusion are dead-ends, there is a solution: innovation. The good news is a small group of college presidents and higher education innovators are building credible pathways to reducing costs and improving outcomes for students.

These programs are providing high quality education at radically affordable price points. They have the potential to align curriculum with the needs of the workforce. Their focus on outcomes could move the entire industry away from an insular focus on prestige to a real engagement with helping students succeed. And yet, NAICU suggests that collusion is the answer to what ails college; pandering politicians offer to make college free.

The real solution is innovation around business models and instructional models, and as we point out in a recent policy brief, there is much that Congress can do to support innovators.

Three ways Congress can help innovation thrive—and protect students

First, current accreditation practices give little weight to programmatic outcomes or student satisfaction; instead they focus on making sure schools stick to the traditional recipe including faculty governance and lots of committees. If you wanted to know how your child was doing in school, would you inspect their backpack to make sure they had pencils and paper? More likely, you take a look at their grades. Congress should press accreditors to do the same: graduation rates, student employment outcomes, ability to repay student loans, and student satisfaction should matter to the accreditation process.

Second, regulation of online and competency-based education needs to be brought into the 21st century. The definition of ‘distance education’ still includes VHS tapes, and notes that microwave transmission is acceptable. But it also requires that interaction between faculty and students should be “regular and substantive,” a provision that has been interpreted to mean that faculty must initiate the majority of interactions for online programs to qualify for federal financial aid programs. The overwhelming majority of brick-and-mortar schools would fail this test—in plenty of large lecture halls across the country, faculty may not interact directly with their students at all, let alone initiate the interaction. Many online programs are breaking the faculty role down into its component parts—lecturer, mentor, curriculum designer—and reducing costs and improving outcomes in the process. Their efforts should be supported, not thwarted.

Third, efforts to improve higher education and hold schools accountable are stymied by a lack of data. With both costs and outcomes shrouded in mystery, parents and students struggle to make smart investments in higher education. Even basic metrics like graduation rates are hard to come by—the current statistics don’t reflect transfer students or any students who don’t start as first-time, full-time freshman. Moving to an individual student record system could shed much-needed light on an industry that is bringing in half a trillion dollars and spending it in the dark.

Collusion won’t fix higher education’s business model issues, and neither will free college plans. Congress should focus on writing rules of the road that can allow promising innovations to thrive and grow.

 

Alana leads the Institute’s higher education research and works to find solutions for a more affordable system that better serves both students and employers. In this role, Alana analyzes disruptive forces changing the higher education landscape.