Today, President Obama announced new plans for higher education, outlining an agenda to make college more affordable. With student loan debt now topping $1 trillion and with tuition at public four-year institutions having more than doubled over the past 20 years, the President’s announcement is more than welcome news to anyone that is or has children getting ready to enter college. As is to be expected, the plan presented is merely an outline, and many of the missing details could take it from being a good plan to a terrible one, but it does have a great deal of potential.
For starters, the President would install a new college ranking system that would score institutions on factors such as: promoting access to low-income students; low net cost of attendance; and, outcomes data, such as graduation rates, post-college earnings, and advanced degrees earned. This new ranking system would be tied to an institution’s eligibility to receive federal funding, with students receiving larger grants and better loan terms at higher-ranking institutions. Additionally, schools that graduate higher numbers of Pell grant recipients would receive incentive funding.
The concept of a ratings system is long overdue in higher education. While there are many third-party rankings, such as the ones provided by Forbes or U.S. News and World Report, they are based mostly on inputs and not on the actual performance of the institution. If students are going to be expected to shell out the equivalent of a small car each year they’re in college, they deserve to know what they’re getting for their money. Likewise, tying federal funding to outcomes is sorely needed. There are far too many institutions with graduation rates in the single digits or teens that are unworthy of either the public’s financial support or the time of the students they pretend to serve.
The plan is not without serious potential drawbacks, however. Putting such a large emphasis on graduation rates runs a substantial risk of turning many poor quality or middling institutions into diploma mills, conferring degrees for money rather than student achievement. It also ignores the impact of selectivity on graduation rates.
For example, students that would otherwise be able to go to Harvard are not likely to attend the University of Rio Grande (which has an on-time graduation rate of 15%). One would expect Harvard to have their incoming freshman far better prepared to succeed in college than those of Rio Grande. That Harvard has a better graduation rate than Rio Grande should also thus be expected, rendering graduation unto itself a fairly poor indicator of which school has actually done more to improve the knowledge and skills of their students.
Without some greater form of quality control than what currently exists, it will still be impossible to truly differentiate the good actors in higher education from the bad ones. While some argue that post-college earnings serve as proxy for quality under the notion that ill-prepared students will not do well in the workforce, this more or less doubles down on the existing prestige-based system rather than ends it.
The President’s proposal to promote innovation in higher education through MOOCs (like EdX or Coursera) or other online programs (like the ones offered by Southern New Hampshire University) is illustrative of the problem posed by a lack of quality control and, unfortunately, could be endangered by it. These programs have a great deal of promise, and have lured in many prominent professors and philanthropists. However, their name recognition is still pretty low.
Despite the well-earned praise bestowed upon Western Governors University, for example, many employers have never heard of the place or remain skeptical about it. And if you’re tasked with selecting employees from a pool of three schools you know and one you don’t, there’s a fairly low probability you’re hiring the person from Western Governors unless they’re otherwise head-and-shoulders above the rest.
This creates a self-fulfilling prophecy of sorts. Schools are ranked on the earnings of their graduates. Schools with poor name recognition, or ones that are freshly emerging, have difficulty demonstrating their value to employers immediately, thus yielding lower wages for their graduates. This causes them to become lowly ranked, which only further compounds the problems of their graduates in finding employment, continuing the cycle until the school hits bottom.
President Obama absolutely has the right idea with his proposal. The vast majority of his plan is well considered, well targeted, and could truly make a positive impact on millions of students. But absent other reforms, it also has the potential to create enormously perverse incentives for colleges and universities while doing a grave disservice to the very students it would otherwise help.
Moving towards a competency-based higher education system—a model that the President’s plan also endorses as a promising innovation—would be a good way to go. Overhauling the broken accreditation system to put either a sole or primary focus on academic quality would be another. But without something to control for quality, an otherwise excellent idea could turn into a very bad one.
Domenic Giandomenico joined Democrats for Education Reform in 2013 after devoting more than a decade of his career to ensuring that every student of every age, background, and aspiration has access to the excellent education they deserve.