Federal College Scorecards: A Step in the Wrong Direction

by Lindsey M. Burke

President Obama today announced his plan to, according to the White House, make “college more affordable, tackle rising costs, and improve value for students and their families.” The president rightly praised online learning and competency-based learning – and praised low-cost options offered by colleges like Southern New Hampshire University. Online learning, he noted, can help students master the same learning at a fraction of the cost. President Obama is right – competency-based learning and online options are good policies that hold the potential to dramatically bring down college costs. But that’s where the smart policy ends.

A big part of the president’s plan includes creating a college-rating system – a federal scorecard – to evaluate colleges on measures such as graduation rates, the number of low-income students served (i.e., the percentage of Pell Grant recipients), graduate earnings, and affordability.

Scorecards are a seductive idea. But having the federal government issue scorecards that seek to measure the output of colleges by various criteria would be a mistake.

For one thing, a monopoly government scorecard would inevitably reflect what bureaucrats – rather than parents, students, and local policymakers – determine is or is not important in education. For another, existing institutions that are comfortable within the cocoon of protectionist accreditation would lobby hard, and no doubt effectively, for output measures that define success in their own terms.

That becomes particularly problematic when considering the second part of President Obama’s proposal: to then tie federal student aid to the new rating system by giving larger Pell Grants and lower student-loan interest rates to students who enroll in colleges that fare well on the federal scorecard. What’s the logical outcome?

The administration is certainly not interested in reducing federal higher-education subsidies. The administration is also now determining the metrics by which colleges will be deemed worthy of such subsidies. So the status quo in higher ed gets reinforced, and the barriers to entry for new college start-ups (think Western Governor’s University, MOOCs, or low-cost for-profits) have just become that much more impenetrable.

Moreover, a competing range of such private outcomes-based scorecards already exists, sponsored by such bodies as U.S. News & World ReportForbes, ACTA, and Kiplinger’s. Each of these reflects the differing visions of quality held by different Americans, from post-graduation salary to the likelihood of a well-rounded education. A one-size-fits-all federal rating system is both unnecessary and undeserving of any special distinction over these independent evaluators that parents and students have long utilized.

If the Obama administration truly wants to “shake up” higher ed and bring down college costs, it would address accreditation head-on. The current accreditation system has slowed needed competition and innovation in higher education.

Stuart Butler and I outlined the problems with the existing accreditation regime last year. Accreditation, professional licensing, and other tools that regulate the provision of services have always been something of a double-edged sword.

On the one hand, they can protect consumers from charlatans and low-quality providers. In technical areas where consumers often do not feel able to judge quality accurately – areas such as emergency medical care – they can provide an assurance of excellence. On the other hand, these tools can also become a barrier to entry in a market, enabling existing providers to use licensing to thwart competition. When that happens, licensing does not assure quality; it protects inefficient and inferior products.

With regard to colleges and universities, accreditation has become, first and foremost, a barrier to entry. And the type of federal scorecard the administration is now proposing would likely follow the same path, enabling existing providers to avoid competition.

As a result, accreditation is no longer a good gauge of college quality. Colleges rarely lose accreditation once it is granted, despite widespread recognition that the quality of higher education has been declining for decades. At the same time, colleges slog through the bureaucratic and time-consuming accreditation process in order to access federal subsidies, which constitute an increasingly large share of college budgets. This accreditation system hinders innovation, creates an inflexible college experience for students, and results in accredited courses that are of questionable academic value.

Higher education will remain impervious to change if we don’t address the perverse incentives maintained by the accreditation regime.

Achieving college affordability means decoupling accreditation from federal financial-aid subsidies – a reform that would provide independent entities the opportunity to credential courses and skills.

By favoring knowledge and skill acquisition over seat time, online options and competency-based learning would more accurately measure attained skills and offer future college students the prospect of a better education, increased employability, and lower education costs.

— Lindsey M. Burke is the Will Skillman Fellow in Education at the Heritage Foundation.

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