Feb. 3, 2006

An Agenda Begins to Emerge

As the Education Department’s closely watched higher education commission continued its public deliberations Thursday, at its third open meeting, members of the panel shed light on some of the directions in which it might be heading, as its various subcommittees reported on the work they’ve been doing behind the scenes thus far.

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The subcommittees of the Secretary of Education’s Commission on the Future of Higher Education all dealt with differing terrain — on such subjects as accessibility, affordability, quality, work force development, and accountability — and the conversation was, like many of the commission’s discussions, highly diffuse and disjointed. Still, some common patterns and areas of possible consensus emerged.

Foremost among them, with the recognition that they are preliminary:

• Colleges and state and federal governments must do a far better job of making higher education available and affordable to all Americans, especially the most financially needy students and the increasing number who are adults. Possible recommendations for achieving this goal included strongly emphasizing need-based financial aid (and perhaps actively discouraging colleges and states from awarding aid based on merit); instituting incentives for colleges to control their costs and the prices they charge students; and encouraging lifelong learning, perhaps by making existing tax credits for such learning deductible or by creating new federal tax incentives for employers and employees to establish such accounts. (The commission’s “quality” task force, headed by James Duderstadt, the former University of Michigan president, called for the creation of transportable education savings accounts that would make lifelong learning available, “almost as a civil right,” to all Americans.)

• Higher education institutions (collectively, with or without the government’s help) must be more “transparent” in collecting and giving the public useful information about their activities and their performance. Topics about which colleges should provide more and better information, the various panels suggested, are on their costs and prices, how their graduates fare in the employment market, and — here’s the biggie — their success in imparting knowledge and, more importantly, skills like critical thinking, to their students.

“We must do a better job of measuring institutional performance of colleges and universities,” said Charles Miller, the commission’s chairman. “Without a transparent information system, accountability today is only guessing.”

Miller said the commission was kicking around the possibility of creating a national “consumer friendly” index or “regime” containing a range of information about institutions’ performance. He emphasized that “none of these [ideas] are mandatory,” or would be imposed by the federal government.

But David Ward, president of the American Council on Education, many of whose member colleges are on edge about the prospect of federal directives to report complicated information in oversimplified ways, pressed the question. “Do you see a way of changing higher education by means of exhorting institutional reform? Or is there a sense of a regulatory agenda, whether we like it or not, because that is conceivably one way of getting there faster?”

Miller reiterated: “I don’t see any way to regulate it or mandate it. We can give it a lot of encouragement and notice. But I think [a lot of these changes] are going to happen even if we didn’t have a recommendation today,” because students and families, policy makers, and employers are increasingly demanding such information, he said.

The rest of Thursday’s meeting, which took place in San Diego, was focused on “innovation” in higher education. The conversation, which included discussion of how well higher education was serving industry and new ways of delivering instruction, such as online learning (which focused on Western Governors, Kaplan, and Capella Universities), largely turned into a debate about the pros and cons of the for-profit higher education sector and how its behavior might inform the commission’s work.

A panel of Wall Street analysts and investors offered a largely upbeat assessment of for-profit institutions, particularly for investors but also for students. Much of the praise focused on such traits of for-profit institutions as the ability to nimbly change curriculums and to measure whether every dollar they spend is producing a favorable return, financially and otherwise. Trace Urdan, the senior research analyst at R.W. Baird, compared those approaches favorably to what he called the “Soviet style factories” of some public institutions (which didn’t go over well with Charlene Nunley, president of Montgomery College, who in defending the performance of community colleges, icily identified herself as “president of a Soviet style factory.”

Howard Block, managing director and senior research analyst at Banc of America, agreed that for-profit institutions have proven to be a phenomenal success for investors, and acknowledged that as an analyst, he has bullishly promoted them as an investment, because of their scale, the access to higher education that they provide, particularly to adult students, and their innovation. But “as a citizen,” Block said, “I harbor great concerns about these companies,” because for-profit companies often “are not enhancing the quality of education” available to American students, “nor are they sufficiently accountable.”

Block said he worried about students who enrolled at for-profit institutions, often accumulating significant debt in the process, in the sometimes mistaken expectation that they could parlay that institution into a better job and a higher wage. While he urged more accurate reporting on students’ job outcomes, Block said the institutions are not entirely to blame for the problem. “Society shares much of the blame,” he said, because “we constantly tout the wage premium for higher education,” but not every degree or other academic credential necessarily helps graduates get a leg up.

He added: “For-profits are overselling the promise of education because society is overselling it for them.”

The commission continues its meeting today.

— Doug Lederman

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