Last month the U.S. Department of Education announced a new round of experimental sites to test new competency-based education (CBE) models. There is a lot of excitement in the CBE community about this development, which will provide welcome regulatory space for aid distribution formulas, an important structural component to any new form of delivery.
However, buried further down in the department’s press release was an additional announcement that has received scant attention, but which made my pulse quicken:
To continue efforts to increase opportunities for Americans to strengthen their professional skillset, the department is also announcing today that it will collaborate with the Department of Labor to develop a $25 million grant competition for an Online Skills Academy to support the development of a platform to enable high-quality, free or low-cost pathways to degrees, certificates or other employer-recognized credentials.
So here’s my question: might the Online Skills Academy be a first step to creating a new alternative pathway to a degree, one that actually creates a new higher education ecosystem that can sit beside and maybe improve our existing system? I know some people believe we should simply support existing public models to return them to a state of almost-free to students. But that cost would be enormous. And the current system is deeply flawed. Its success rate is not that great, the end product is increasingly suspect, and it renders some layers in the incumbent system winners, while others lose funding support.
I am instead thinking about a nationally offered, extremely low-cost, competency-based model degree program that includes stackable, industry-embraced credentials. One that is endlessly tailored to the student, whether an 18-year-old at a residential college or a 40-year-old single mother in an online program. A system that pays only for success, that creates a whole new ecosystem of providers and supports, and that puts students in control of what they need in order to master competencies and achieve their overarching learning goals.
This is an idea I’ve been thinking about for a while. In fact, at the request of the White House Office of Science and Technology Policy, I last year sketched out a concept for providing free or close-to-free higher education to anyone who wants it. The invitation to brainstorm was irresistible, the challenges to actually deliver such a thing are nearly insurmountable, and what I eventually produced raises more questions than answers. But to my question, “Can I write this as if I were Ruler-for-the-Day?” the answer was yes. And who can say “no” to that opportunity?
What follows below is a slightly modified version of what I provided.
You said I could think big and without constraint, so here goes.
The goal I‘d set out would be to create a “free to all” path to two- and four-year college degrees for anyone who wants one. A college education would be reframed as a fundamental civil right for all Americans seeking a better life in this fast-changing, interconnected global economy.
The challenge would make available to everyone and to every interested organization the core degree experience. By making a high-quality, industry-endorsed degree program virtually free and leveraging just a portion of federal aid dollars, we could create a new learning ecosystem for higher education that sits alongside the incumbent providers (and also allows many of them to reinvent and/or improve themselves) while also creating a springboard for a host of new innovative learning pathways.
I am not suggesting we create a national curriculum for all of higher education, but that we create a national alternative for those who don’t want or can’t afford a traditional option. We could have a debt-free option for all those who want it.
Far from creating a larger role for government, the initiative would invite a wide range of existing providers, entrepreneurs, community-based organizations and others to get into the business of education, while ensuring that the outcome is of high quality and trustworthy and that the government only pays for actual success. For those who want to ensure high-quality education as a right, this model expands access at lower cost.
For those who want to protect the private sector (and inversely keep a small role for government), this model invites entrepreneurial initiatives and approaches.
In my model, which I’m calling “The National College Degree” (NCD) for the moment (I know – there are better brand people than me out there), the core educational experience would be competency-based and cost nothing to the student. NCD would have these components:
An associate degree and bachelor’s degree option. Each would have a mix of core competencies and field-specific competencies (the latter being akin to a major).
The associate degree path would have three mileposts (each equivalent to one third of the way to completion) and the bachelor’s would have six such mileposts.
Mileposts would be credentialed and stackable.
The competencies would have to have the endorsement of major employers or their associations.
It would have to be direct-assessment-based: time is irrelevant and mastery non-negotiable.
The delivery of content would be online and use OER resources.
The assessments would be project-based, using intelligent simulations.
Peer-to-peer learning capabilities would be built in.
Intelligent-learning systems would be available for students needing/wanting them.
Automated assessments and machine grading would be built into the platform.
A high level of rigor and quality would be demanded.
All graduating students would take a national exam (like the Collegiate Learning Assessment) and the degree would only be awarded when the student mastered the competencies in the degree program and had a satisfactory score on the exam.
The system would have to include a secure integrity component – we have to know the student getting the degree did the work and the assessments.
The system would have a career-pathways component utilizing cutting-edge labor-market analytics to map competencies to the range of jobs to which students might aspire.
The eventual program would also have to define a system for competency-unit size (an alternative to the credit hour) that all NCD providers would have to accept. This way we create the new competency-based “exchange rate” and we do not replicate the transfer-credit inefficiencies and irrationality of the credit-hour system, one that results in enormous waste today.
All of the necessary components are out there in some phase of development. The NCD pathway needs to establish the aspirational standard for higher-ed quality, not the floor. It won’t be easy to get a degree because the quality is not compromised; there’s no sliding by.
Imagine posing this as a challenge grant. The challenge grant would be to the consortium that could create what is outlined above so that it meets those broad goals, and creates a system for which there is almost zero cost to deliver. I’d set a goal: cost of delivery to be no more than $200 annually per student for the two-year degree and $400 annually for the four-year degree.
As a result, the developers would have to think about an open-source platform like the one developed by edX, and open-source learning resources like those created by Khan Academy. They would likely need game-design and immersive-learning partners to create the project-based simulations for assessment. There would need to be corporate partners who would collaborate in the creation of competencies and who would then declare they will endorse the NCD and accept it in hiring. More on this near the end.
The US government would make the NCD free to all, covering the $100 per-student annual price of delivery through government subsidy.
Now the powerful part: any person, any organization, could wrap services around the NCD. So we could see intentional, residential-learning communities where the education is free (the NCD), but students pay for the coming-of-age experience, living on some form of traditional campus. We could see faith-based organizations and inner-city churches offering NCD support services in church basement programs (as happens with ESL). We could see high schools integrating the NCD. States could save enormous amounts by reorganizing community colleges around the NCD. Entrepreneurs could build NCD support companies for students who need a-la-carte support services (tutoring in math, help in writing, study groups…). Community agencies like the Urban League could become NCD sites. Individual teachers could offer their services (think Amazon’s Mechanical Turk) with user reviews and ratings that are transparent to all. Really effective faculty would earn an ever-growing following. A whole new learning eco-system could evolve. I could see NCD+ degrees in which organizations build atop NCD.
What I like about this idea is that it implicitly says to the incumbent providers, “Use the NCD or not, but show us how your outcomes stack up against NCDs.” To all others, it says, “Go ahead and build support infrastructure around the NCD and expand access (but know you will only be rewarded for success).”
People would not have to enroll in an NCD program. Wealthy people could still enroll in elite institutions. Less-wealthy students could still take their traditionally delivered loans and Pell Grant dollars to traditional institutions, as they do today.
If I want the values-based curriculum and experience of a denominational school, I can select that for myself. Those wanting to root for a D-I football team can still attend that flagship university. But NCD would lift everyone’s game. Community colleges could elect to reinvent themselves around it or offer compelling new alternatives. The vast tier of middle-level institutions would have to declare what their graduates know, show how they know it and make themselves at least as good as NCD. You are not creating a national curriculum for all of higher ed. You are creating a national alternative for those who don’t want or can’t afford a traditional option. You could have a debt-free option for all those who want it.
The money part. In that ecosystem, people who provide services around the degree pathways need to get paid. I would pay Pell-eligible students $500 each time they hit a milepost, no matter how long it takes to get there. The whole cost of the associate degree would be $1,500 plus $200 in delivery cost. The bachelor’s would be $3,000 plus $400 in delivery cost. The system would only pay for performance. The student could use the $500 to pay providers within the ecosystem or keep the money themselves.
The Education Department would have a “pay the provider” escrow system in which the qualified NCD student could enroll with an ecosystem provider, but the money would only be released to that provider when the student successfully passed the milepost. Think of it as an Educational PayPal. The provider bears the risk, but knows it will be paid if the student is successful.
Think of the benefits:
The government only pays for success (it spends billions on failure now);
No one is deprived a degree because of cost;
Quality is ensured – no grade inflation (no grades – mastery or not) and assessment is validated (using the CLA-like exam).
We create a whole new educational ecosystem that at least runs parallel to the current higher education system, but also helps improve it.
The government would save billions in Pell when NCD scaled.
College becomes a civil right for all Americans.
The well-designed system would not have to be maintained by the government if you wanted to keep government out of it, but it could be a department within the Education Department or contracted out. (Take just $1 billion of the $153 billion in Pell and you’ll have money to spare with this system, while easily covering all the cost of maintaining the system.)
This is a moon shot, but not as complicated or far away as you might think. A lot of the moving parts exist today. We have emerging competency-based delivery models, powerful new learning platforms, ever-improving adaptive learning systems, greater desire among employers and industry to be involved, and bipartisan support for new approaches.
This is not an entirely new idea. Consider, for example, the administration’s 2009 proposal for an Online Skills Laboratory. The $500-million idea was almost funded, but healthcare reform trumped it. However, note the similar thinking:
Create a New Online Skills Laboratory: Online educational software has the potential to help students learn more in less time than they would with traditional classroom instruction alone. Interactive software can tailor instruction to individual students like human tutors do, while simulations and multimedia software offer experiential learning. Online instruction can also be a powerful tool for extending learning opportunities to rural areas or working adults who need to fit their coursework around families and jobs. New open online courses will create new routes for students to gain knowledge, skills and credentials. They will be developed by teams of experts in content knowledge, pedagogy, and technology and made available for modification, adaptation and sharing. The Departments of Defense, Education, and Labor will work together to make the courses freely available through one or more community colleges and the Defense Department’s distributed learning network, explore ways to award academic credit based upon achievement rather than class hours, and rigorously evaluate the results.
You said “Ruler-for-the-Day.” And while I have skated over the myriad challenges and ignored the political realities of trying to get something like this done, I am pretty convinced there is a way to create a new higher education ecosystem for those who cannot flourish in the one with which we live today.
I don’t have any details on the newly announced Online Skills Academy. But to the extent it could provide a prototype for new systems thinking about higher education, it stands to be as powerful as the more-discussed CBE experimental sites that are in the foreground of the press release and subsequent discussion.
I think there is a more subtle, but critically important dimension to the concept outlined above. So much of our discussion and debates over higher education center on curriculums, content and skills – the heart of what education offers, many would argue. But those are increasingly free, easy to replicate and scalable. The messy, expensive and complicated parts of education are the human dimensions. Conceptually, the National College Degree makes the ostensible core of the education experience close to free and devotes more funds to providing students with the human support that works best for them, paying only when that support proves itself effective.
It is not an argument against our incumbent models, but an alternative pathway for those whom the current models don’t work very well. If the degree can be shown to be of genuinely high quality, it will challenge all of us incumbent providers to be better at what we do as well.
Paul LeBlanc is president of Southern New Hampshire University.
A heated Congressional exchange raises the question: does the U.S. government need more power to hold colleges accountable for handling sexual assault cases, or has it already overstepped its authority?
The court of public opinion has not been kind to the for-profit college sector over the last few years. In particular, the reputations of the 15 publicly traded companies that dominate the sector have been tarnished through repeated stories of alleged abuse of federal financial aid programs and students aggressively lured into programs where some end up with unmanageable debt.
But for-profit education did not always operate this way. Some of the same companies barraged by today’s negative headlines were innovators of new business models that served populations left out of the traditional postsecondary education space. Others offered training programs for years before there even was a Higher Education Act that made federal financial aid available to students.
What led so many companies astray is a story of strategic choices made at the height of the 2000s boom. Faced with the means to achieve infinite scalability by tapping into a federal entitlement program, the opportunity to use online learning to cut costs, and motivated by Wall Street cash and its accompanying investor pressures, several companies pursued hypergrowth at all costs. They moved away from traditional missions, pursuing any and all students they could through sophisticated recruitment machines designed to feed the neverending demand for hitting enrollment and earnings targets.
U.S. Department of Education data on students who left school in 2008 and 2009 at the peak of the for-profit college boom show just how bad the strategic emphasis on growth over quality has been. In total, 40 percent of programs offered by publicly traded companies, representing 48 percent of for-profit students in the data, fail one or both of the tests of debt-to-earnings and student loan default that the Education Department is proposing to use to judge the success of career training programs. This includes 44 percent of students enrolled in colleges owned by the Apollo Group, which runs the University of Phoenix. It also includes 90 percent of students at ITT Technical Institutes.
But companies like Strayer and Capella that took a more measured approach to growth look much better in the data. Not a single program at Strayer appears to be leaving graduates overly indebted or headed for default, while just one of Capella’s 96 programs has problems — a bachelor’s degree in health informatics. Capella’s income results are so strong that not a single program had a debt-to-earnings ratio above 1 percent.
The results for Apollo and ITT are particularly troubling because these are two companies with long operating histories that used to be some of the best examples of what successful for-profit education could be. The ITT Technical Institutes actually predate the Higher Education Act by nearly 20 years and were clearly able to recruit and educate students without being wholly reliant upon the federal grants and loans that make up the majority of its revenue. From its founding in the 1970s until the early 2000s, Phoenix would not admit students unless they were 23 or older, were working full-time, and had at least two years of workplace experience. This helped it build and maintain a reputation as a high-quality option for working adults that other colleges were reluctant to educate.
For those seeking to maximize profit, the entitlement nature of the federal student aid programs provides a clear path to unlimited growth. Anyone who meets minimal eligibility criteria qualifies for at least a multithousand-dollar student loan. Low-income students — the ones who just happen to be the least likely to go to college and can be recruited with the least competition — can bring thousands more in additional revenue each and every year through federal Pell Grants. As long as companies could find American students, there was little ceiling to the growth possibilities.
The internet pushed that growth ceiling even higher. Digital coursework could reach students anywhere in the country at a substantially reduced cost. Finding sufficient concentrations of students to justify face-to-face investments like classrooms and more professors became totally unnecessary. The recruitment pool had effectively become anyone with a pulse and an internet connection.
Entitlement programs and distance learning provided an opportunity and means for exceptional growth, but it was Wall Street that came in with the motive. The Apollo Group and ITT became publicly traded in the mid-1990s. At Apollo, enrollments rose from 124,000 in the fall of 2001 to 470,800 in the fall of 2010. ITT, meanwhile, grew from 28,600 to 88,000 over the same period.
Enrollments grew even faster from 2006 on, fueled by cheap credit available elsewhere in the economy and constant demands for showing increased student starts. But such growth pressure can coexist with historical standards and missions only while there’s a glut of students who fit that mold. Once that pool is tapped out, either standards or enrollment targets have to give.
Standards and institutional mission lost. Phoenix removed its enrollment requirements and began placing more emphasis on two-year degrees to students regardless of age or work experience through Axia College. A university with over two decades of experience catering to one type of student immediately started enrolling anyone it could. As former Phoenix Senior Vice President John Murphy wrote in his book Mission Forsaken, “It was a money-spinning financial decision, but a cheerless academic disaster.”
The Education Department data show what an academic disaster looks like in numerical terms. Take Phoenix’s associate degree in office management and supervision. It is the second-largest associate degree program offered by any institution in the country. And more than 9,800 of the 27,500 students who started making payments on federal student loans for this program from October 2008 through the following September ended up defaulting on their debt by the fall of 2012. These individuals had their credit ruined and balances inflated through a host of fees and penalties, and will almost certainly never be able to discharge their debts through bankruptcy.
The office management and supervision program is just one of 20 programs at Phoenix with a default rate of 30 percent or higher. This represents over 32,200 individuals — about the same size as the University of Alabama. Every single one of these programs offers an associate degree. It even includes programs that should have direct market payoff, such as network systems administration (default rate of 44 percent) and information technology (42 percent).
By contrast, Phoenix’s graduate programs do not look so bad. None of them had unacceptable results and just one — a doctorate in higher education management — had a default rate over 15 percent. Two doctoral programs (business administration and organizational leadership) even had typical earnings over $100,000. One has to wonder how many students might have been prevented unnecessary financial harm had Phoenix stuck to its core business model and not pursued such expansion.
Unfortunately, Phoenix provided a case study for other companies to emulate, especially for recruitment. For ITT that meant creating an aggressive recruitment machine that used a “pain funnel” tactic to increase enrollment by preying on students’ fears and insecurities. And since many of those students were low-income, it created new debt products for students who needed money to cover the gap between tuition and federal aid.
The high-growth model has created legal headaches and poor student results for ITT. It has the largest share of students in failing programs of any publicly traded company. ITT also has programs like its $47,000 associate degree in visual communications, where a higher percentage of students default on federal student loans (45 percent) than find jobs in their field (30 percent).
ITT has also run afoul of the Consumer Financial Protection Bureau (CFPB), which sued the company in February for the debt it offered to cover tuition gaps. In its lawsuit the CFPB alleged that ITT lured students into high-priced private student loans with default rates as high as 60 percent and “sacrificed its students’ futures by saddling them with debt on which it knew they would likely default.”
Recent efforts suggest that there may be ways to turn back the tide and get some companies to focus again on students over growth. Chastened by regulatory efforts aimed at reshaping recruitment practices and holding institutions accountable for debt, coupled with lawsuits and investigations against the worst behaviors, many companies have had to reduce enrollment, offer trial periods, and freeze or lower tuition. This includes initiatives like the Kaplan Commitment, which lets students test out classes for three weeks without paying tuition. Or DeVry’s Fixed Tuition Promise, which guarantees costs will not go up as long as students stay enrolled and came one year after a tuition freeze. Hopefully, these changes will result in better outcomes for students.
But short-term improvement is not enough. The last 15 years has shown just how Wall Street can trump old values and prompt reckless behavior if their ambitions and actions are left unchecked. Without a stronger accountability structure around them, there’s no promise that growth at all costs will not return.
Ben Miller is senior policy analyst for the New America Foundation's Education Policy Program.
I approach the topic of the appropriate reach of government regulation into higher education in very much of two minds. On the one hand, I am the president of an independent-minded private college that has been in continuous operation for 139 years and delivers strong outcomes in terms of access, persistence, graduation, employment and post-graduation debt. Regulation from the federal government isn't likely to impose higher performance thresholds than we have already established for ourselves (and consistently achieved), or to improve our performance, but added regulations will very likely impose new costs on us related to compliance, in addition to being just plain irritating.
On the other hand, I serve on the Board of Trustees of the Higher Learning Commission, and that service has opened my eyes both to the broad variety of institutions that the Commission serves and, very frankly, to instances of institutions that have gone awry, that are not serving their students well, that are not good stewards of the federal dollars that flow through their budgets, and that are either unwilling to admit their shortcomings or unable to address them.
The investment that government -- both federal and state -- makes in financial aid to students, who then pay that money to us so that we can use it to deliver our programs, is certainly considerable, and we need to be good stewards of it, so that students are well-served and taxpayers' dollars well-spent. If those ends are to be achieved, some regulation will be necessary.
So, how much is just right? Here’s an answer: the minimum amount necessary to achieve the two goals I just mentioned: ensure that students are well-served and that tax dollars are well-spent
As the reaction from the higher education community to the Department of Education's talk about a federal rating system for colleges and universities demonstrates, those seemingly simply goals I just articulated aren't simple at all once you get into any level of detail in specifying what it means to be "well-served" or "well-spent."
Does "well-served" for example tie out to a minimally acceptable four- or six-year graduation rate? What about open-access institutions whose mission is to prepare underserved students to succeed at a different kind of institution? What about institutions in a situation where graduation may not be the most important goal?
"Well-spent" raises similar questions. If you are an institution with a graduation rate in the 90 percents, but the percent of Pell-eligible students in your student body doesn’t reach the number of Pell-eligible students that somebody in an office in Washington decided was minimally acceptable, does that mean the federal dollars that flowed to your budget through student tuition payments weren't well-spent because they weren't supporting certain policy goals, despite evidence that your program is effective?
These problems aren't new. Every regulated industry faces them, and perhaps as we think about proposed increases in the regulation of higher education a wise thing to do would be to study those industries -- if any -- where the right balance between the actors in the industry and government regulation has been struck.
In the meantime, here are a few thoughts about how much government regulation is just right:
It's too much if it imposes compliance costs and burdens on institutions that plainly are serving students well and being good stewards of tax dollars.
It's not enough if there's demonstrable evidence that there are numbers of institutions with clearly articulated and appropriate mission statements that are not delivering on those missions but are nevertheless consuming significant resources.
It's not enough if there is clear and demonstrable evidence that self-regulation, and by that I mean accreditation, is ineffective.
It's too much if regulation requires an institution that is otherwise flourishing to change its mission in response to the policy goals of whoever happens to be running the U.S. Department of Education at the moment.
It's too much if the net effect is to narrow the diversity of types of higher education institutions in America, the diversity of their missions, of their entry points, and so forth.
It's too much if a compliance industry grows up around regulation.
It's too much if it can't be demonstrated that the net effect of the regulations, after the costs and burdens it imposes, has been to make institutions better serve students and steward tax dollars.
Many institutions of higher education in America don't need more regulation to help or force them do their job. Some do. Regulation that starts from that simple fact is most likely to be good for students, good for higher education, and good for the country.
David R. Anderson is president of St. Olaf College, in Minnesota. This column is adapted from remarks made at the panel on “How Much Government Regulation of Higher Education is Just Right?” at the 2014 Annual Conference of the Higher Learning Commission.