Higher ed innovator Paul Freedman dishes on future of college, accreditation, and gainful employment


Nov 6, 2014

In the wake of the Department of Education’s release of the new gainful employment regulations, which are intended to protect students from poor-performing career college programs, as well as the release of a new paper out of the American Enterprise Institute titled “Launching New Institutions: Solving the Chicken-or-Egg Problem in American Higher Education,” which is about solving some of the barriers that accreditation poses to innovation by Sylvia Manning, former head of the Higher Learning Commission of the North Central Association of Colleges and Schools, a higher education accrediting body, I had the chance to email with Paul Freedman, founder and former CEO of Altius Education as well as one of the smarter thinkers on the future of higher education.

I’ve written about Paul’s ventures several times before. In 2009 I wrote about Tiffin University’s promising move to combat disruptive innovation by partnering with Altius to create Ivy Bridge College. A few years later I covered Altius’s announcement of its Helix Platform. And most recently I wrote about the Higher Learning Commission’s misguided but predictable decisions that in essence led to the end of the partnership between Tiffin and Altius—and my own take on what that means for how to introduce innovations into higher education.

What follows is our Q&A, edited for grammar, about higher education accreditation, gainful employment, and what Paul sees as promising innovations in the higher education landscape.

Q: Aside from the fact that Sylvia Manning did not disclose her role in the shutting down of the partnership between Altius and Tiffin—an omission that I found surprising and disappointing—what did you think of the recommendations in her paper?

A: The actual chicken-or-egg problem is that accreditation “unapologetically” reinforces best practices with no evidence that they are indeed best. Another way of saying it is that accreditation requires elements of tradition basically because they are traditional.

Tuition has increased roughly 500 percent since 1980 and only 50 percent of graduates can get jobs that require their degree. That’s the problem. Accreditors’ solution to this is to say more of the same.

The FDA—one of Manning’s prime examples in support of the role of accreditation—does a good job because they actually measure outcomes. You can’t get a drug approved if it causes arrhythmia measured to a small fraction of a heartbeat. Higher education accreditation, however, doesn’t measure learning to any scale whatsoever.

Q: What do you think of the new version of the gainful employment regulations?

A: I don’t have an issue with the attempt to create a formula that measures the outcomes of educational programs, nor do I have an issue with shutting off access to Title IV funds for programs that don’t achieve stated measures.

With that said, I’m not a huge proponent of this specific regulation for two reasons. First, focusing on for-profits while ignoring private non-profits is not helpful and potentially harmful. And second, you need to have risk-weighted measures of outcomes otherwise the easiest fix is just to limit access to at-risk students.

I think the first concern is a major one. The outcome data that we do have—as well as my personal experience—suggest that the worst performing programs are actually found at non-profit institutions. I understand the background of course. The administration’s authority for this regulation comes from defining “gainful employment,” which only applies to for-profits and certificate programs at private non-profit and public institutions. This policy, however—and the narrative in education more generally—has created the view that the for-profits are all that is wrong with higher education.  The truth is tuition at non-profits has increased by a factor of five since 1980, and the non-profits are responsible for the majority of student loan debt. Making the debate about a tax status isn’t a pathway to a solution.

If it were up to me, I would want to see a risk-weighted “gainful employment,” and I would want to see it apply to all institutions. Of course, as it turns out, it is not up to me.

Q: Turning to the more positive story lines, where are the most promising hot spots of innovation in higher education right now?

A: There are three places where innovation is occurring in higher education. 1) Outside accreditation; 2) above accreditation; 3) in very rare cases within accredited institutions that are willing to organize properly and take risks.

The most innovation, as measured by students served and financial growth, is occurring completely outside of the accreditation system. Schools like General Assembly, Flatiron, Koru, and dozens of others have popped up over the last few years to serve certain programmatic areas where traditional institutions have been too slow to adapt. These areas include web development, big data analytics, and UI/UX.

These programs are very pragmatic in their approach and clear in the outcomes they are providing. Students pay entirely out-of-pocket to go to these schools because they get jobs. Period. So far the job placement for the schools I mentioned ranges from 85 to 95 percent. I think these models are potentially disruptive to all professional schools.

As for above accreditation, when I was at Altius, I visited with the then-president of WASC, Ralph Wolff at his office. I wore a tie, and he was in a dress shirt.  At the end of the meeting, Ralph put on a tie. I asked him where he was going, and he said “Stanford.” The lesson for me is that if you are Stanford, the accreditor comes to you and wears a tie. If you are anybody else, the situation is reversed.


Michael is a co-founder and distinguished fellow at the Clayton Christensen Institute. He currently works as a principal consultant for Entangled Solutions.