Can the President Solve Higher Ed's Problems?

By Sandy Baum

Recently, President Obama made some dramatic proposals directed at making higher education less expensive and colleges and universities more accountable. In the days since, it has become clear to most observers that effective solutions will require a little more thought and a lot more evidence.

For those who have been more focused on the carnage in the Middle East, the 50th anniversary of the March on Washington, or the end of summer vacation: Obama vowed to develop a rating system that would evaluate all postsecondary institutions in the U.S. based on a set of criteria including graduation rates, enrollment of low-income students, student debt, and the earnings of graduates. He proposed eventually (during the next president's term) linking the federal financial aid for which individual students are eligible to these ratings. Other ideas, such as improving the protections for students repaying their education loans, providing incentives for institutions to do a better job of educating low-income students, and supporting cost-saving innovations, are getting less attention.

I made my views on the President's proposals known in an essay in the Chronicle of Higher Education, co-authored with Michael McPherson.

There is virtually no chance that student aid will be linked to a rating system, and not much chance that every school will be tagged with a grade anytime soon. But we should think about why Obama gave so much attention to this issue and how we might do a better job of developing the roles of federal and state governments in assuring that as many people as possible have access to high-quality postsecondary education.

Many Americans have followed the lead of the media and believe that virtually all students suffer under the burden of staggering debt and that college is unaffordable for all but a select few. In reality, most students borrow reasonably and repay their loans with some discomfort, but not with undue suffering.

College prices have gone up faster than average prices in the economy for decades. In the public sector, prices have risen particularly rapidly in recent years as state funding has not kept up with enrollment increases. Many people have seen their incomes declining if they are lucky enough to be employed and the value of their savings dwindling if they are lucky enough to have been able to set anything aside outside of home equity.

But two-thirds of high school graduates go straight to college and many others enroll later. Sticker prices for a full year in college range from the highly publicized $50,000-plus -- which includes room and board, not just educational costs -- to about $3,000. Moreover, about 60 percent of undergraduates get grant aid and pay less than the sticker price.

But the issues of college access, affordability, and completion do deserve our attention. Low-income students are much less likely to enroll in college than those from more affluent families and much less likely to graduate if they do enroll. Many adults who need postsecondary education to find reasonable jobs struggle to succeed in college while supporting themselves and their families. And it is increasingly true that while there are many low-wage jobs that don't require education beyond high school, almost any job that will provide a reasonable standard of living requires some amount of postsecondary education.

The federal government has taken up quite a bit of the slack as states have pulled back on supporting higher education. States primarily fund public colleges, allowing them to charge lower tuition rates. The federal government primarily funds students to help them pay the tuition.

This was originally conceived as a partnership. These days it looks more like a tug of war, with the states looking to the federal government to make up for the decline in the per-student support they provide, and the federal government trying to leverage the student aid dollars it supplies to manipulate state and institutional policies.

The states established, manage, and control the colleges attended by most American students. The federal government has a strong interest in assuring that their student aid money is well-spent and that students across the country have strong educational opportunities. But they can't and shouldn't micromanage the system.

We need better data on which students make it through higher education and what happens to them afterwards. We need more research on the effectiveness of innovative teaching methods and institutional structures. We need a better understanding of how students access and process available information and make decisions about what and where to study -- decisions that will affect the rest of their lives. And we should acknowledge that we have a strong and varied system of higher education institutions, providing a wide range of opportunities for students.

But some of these institutions -- licensed by states, accredited by federally recognized bodies, and funded through federal student aid -- do their students more harm than good, and so maybe should lose accreditation and access to federal funds. We should be able to tackle that problem without racing towards comprehensive solutions that sound simple but risk harming many of the students they are designed to help. 

Sandy Baum is a senior fellow at the Urban Institute and a senior fellow at the George Washington University Graduate School of Education and Human Development. This piece originally appeared on the Urban Institute's MetroTrends blog.

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