On Higher-Ed Reform, Some Encouragement from Obama

by David Wilezol

On the whole, it was refreshing to see Obama acknowledge in his higher-education-reform speech in Buffalo today what even many liberals such as Matt Yglesias know to be true: “The liberal idea of pumping more federal dollars into the system — something his administration has done enthusiastically — has failed to deliver affordability.” Failed it has. Decades of federal subsidies for students, usually in the form of student loans, have pushed costs to the point that tuition has risen over 1,100 percent since 1978.

So whither higher education in Obama’s second term? He seems to be putting institutions on notice that inflating the cost of college is not only ruinous to students, but deserving of moral approbation. His reforms “won’t all be popular with everyone — including some who’ve made higher education their business — but it’s past time that more of our colleges work better for the students they exist to serve.”

The most meaningful of these reforms is the introduction of a ranking system that will tie federal money to affordability and academic outcomes. Just how much money will be tied to these factors is in question. But this is the idea that conservatives want to see more of; Bill Bennett and I have written so in our book.

The idea is laudable. The president sees the merits of getting colleges to start competing on the basis of price and quality, not on a perception of prestige. In the past half-century, schools have pumped hundreds of millions of dollars into building lavish student centers, recruiting star faculty, and expanding sports programs, all to make their campuses attractive to students who can pay full price. For everyone else, there’s a student loan. Linking aid to academic outcomes and affordability will help tighten the money spigot that federal student loans opened decades ago.

Moreoer, the president is receptive to adopting two of the most quiet but effective reforms in higher ed. One is merely shortening the length of time that it takes to get a B.A., from four years to three. The other is the embrace of competency-based education. In competency-based programs, students can earn  credits by demonstrating mastery of subjects, not completing a course. Students don’t have to take time-consuming and expensive classes for material they already know. Instead, they test out of the class, or show proof of mastery in the form of, for instance, an already completed AP test, professional certification, or standardized test score.

What I do worry about in the president’s reform agenda is the ability of schools to goose the rankings system by lowering the quality of their academics (hence getting more people to pass through). Comparing institutions is also difficult. Will the perennially excellent schools sure to be found at the top of the rankings have any incentive not to keep hiking tuition, knowing their product is so coveted? Not every school has the same business model — how can we reasonably compare Yeshiva University to Michigan State?

Lastly, to link federal money to a school’s access, affordability, and outcomes sounds great, but the student loan is still the primary means of delivering subsidies to higher education. Is the president prepared to call for a linkage of an individual’s academic performance to his borrowing limit? That is the reform that would go the furthest in reducing student debt burdens. But given the president’s insistence on government being an agent of economic mobility, it seems unlikely.

 — David Wilezol is a producer for Bill Bennett’s Morning in America and the co-author, with Bill Bennett, of Is College Worth It?