WASHINGTON -- Weeks after the U.S. Education Department issued softened regulations designed to ensure that vocational programs prepare graduates for "gainful employment," House Republicans made abundantly clear Friday that, in their view, the rules had not been eased nearly enough, and that they would continue to oppose them.
Like ancient Rome in its waning days, American higher education is corrupted by excess. According to a now infamous 2003 New York Times article, for instance, Ohio State University boasts a massive facility its peers call the "Taj Mahal," which features kayaking, canoeing, a ropes course and massages. Washington State University possesses the largest Jacuzzi on the West Coast, a tub that can accommodate up to 53 people. And that just scratches the surface. One reads regularly about tens of millions spent to install new football stadium skyboxes; about gourmet cafeteria cuisine; and even about student rioting to celebrate athletic success.
Examine for-profit colleges, however, and one observes quite the opposite. There are no water parks, skyboxes or Jacuzzis. Typical is a campus of DeVry University, as described by the Berkeley professor David Kirp in Shakespeare, Einstein, and the Bottom Line: The "campus off Highway 88 in Fremont, California ... looks like one of the high-tech companies in the area. It's low-slung and functional, built with an eye to use, not aesthetics. With its long corridors of classrooms and labs ... it could be a community college, though without the gym or student center."
"Market forces" are often blamed for indulgences at traditional universities, as they are in the recent Futures Project report "Correcting Course," and for exploitation of students at for-profit colleges. But how can the market produce such contrasting corruptions: excessive opulence in presumably well-intentioned nonprofit universities, and dirty dealings at essentially amenity-free for-profit institutions? Moreover, how can for-profit schools' opponents continue to smear for-profit institutions as threats to students, as Rep. Maxine Waters (D-CA) did in recent Congressional testimony, while traditional colleges are typically portrayed as ivy-walled treasures dedicated only to seeking truth?
To a large extent, the answer, at least to the second question, is a failure to understand the practical difference between "for-profit" and "nonprofit."
First, look at nonprofit institutions. "Universities share one characteristic with compulsive gamblers and exiled royalty," writes the former Harvard University president Derek Bok in Universities in the Marketplace, "there is never enough money to satisfy their desires." Bok's point is unmistakable: Universities always work to maximize their revenue. Why? Because, like most of us, they always have things they'd do if only they had more money. William F. Massy, a former Stanford vice president, calls it a drive for "value fulfillment" in his book Honoring the Trust, further explaining that "because value fulfillment is open ended, no respectable university will run out of worthwhile things to do."
That makes sense. The term "value fulfillment," however, suggests that universities use additional money only for altruistic ends, while the reality is that nonprofit universities can be driven as much by greed as anyone else. For instance, as the Ohio University economist Richard Vedder explains in Going Broke by Degree: Why College Costs Too Much, university presidents often indulgently use new revenue "to fund large salary increases, add staff members ... build more luxurious facilities, and expand research projects."
For-profit institutions also try to maximize their revenue. But in addition to maximizing revenue, for-profit schools want to minimize their expenses. That's why they don't have any football stadiums or massage therapists. Simply, maximum revenue and minimum expenses yield maximum profit.
That does not mean, as their critics suggest, that they will necessarily exploit their students. The only way for-profit schools can maximize their revenue, after all, is by bringing in as many students as possible. They can't, therefore, reduce expenses to any point below which they can provide the education students are willing to pay for. Kirp's discussion of DeVry helps confirm this. "Instruction is more intense than in most community colleges and regional universities ... and it is often better as well." Moreover, "graduates do get hired ... DeVry's proudest boast has been that within six months of graduation, 95 percent of graduates are working, and not behind the McDonald's counter but at jobs with a future."
Are for-profit schools perfect? Hardly. As their critics regularly point out, for-profit education's past is checkered by scams and frauds. And it still has troublemakers. In January, "60 Minutes" aired an expose on questionable practices at Career Education Corporation, which runs 82 for-profit campuses. But general hostility to for-profit education, its past, and the ongoing scrutiny it receives as a result force for-profit schools to police themselves.
As Nicholas J. Glakas, president of the Career College Association, told members of the U.S. House Committee on Education and the Workforce last week, his association's members are "committed to and focused on compliance" with the law. "We have to be because of our past." He also explained, though, that accusations against for-profit schools are often sensationalized, noting that the "60 Minutes" piece focused on only "three students out of 100,000" at "2 of 82 branch campuses" of just "one publicly traded company."
So when scams occur in for-profit schools, or traditional colleges purchase ever-grander amenities, has the market failed? No, because a truly free market hasn't even been allowed to exist.
According to the College Board, almost 60 percent of students in both nonprofit and for-profit colleges receive financial aid, primarily from the federal government. In addition, according to the U.S. Department of Education, more than a third of public universities' revenue comes from state governments rather than consumers. Supply and demand have been crippled. Because a large percentage of their funds come from state governments, public schools aren't bound by students' demands. Moreover, most students use other people's money -- in the form of taxpayer-funded grants and loans -- when deciding what they are willing to pay for at any school.
The solution to the problem is to let the market work, and with the federal Higher Education Act due to be reauthorized this year, a window of opportunity is starting to open.
Ideally, the federal government should cease providing grants and subsidized loans to students, and states should no longer furnish block appropriations for their colleges. Such solutions, though, are likely politically impossible.
What would be politically feasible, however, would be for states to do something like what Colorado will begin doing next fall. Rather than sending funds directly to its colleges and universities, the state will send money to students, who can either take it to the state school of their choice, or use half of it at one of three approved private schools.
The federal government, for its part, should phase out all grant and loan programs for wealthy and middle-class students. For the poor, it could offer loans that students wouldn't have to start paying back until after they graduate and begin earning a college graduate's salary, making them ultimately responsible for paying for their own education, but allowing them to do so when they've begun to reap its benefits.
Making all consumers pay their own way through college would infuse effective demand into college financing. Suddenly, the frills of traditional higher education, or taking a chance on potentially shady for-profit schools, would look a lot less enticing. The market would finally get to work.
Neal McCluskey is an education policy analyst at the Cato Institute's Center for Educational Freedom.
In my work as Oregon’s college evaluator, I am often asked why state approval is not "as good as accreditation" or "equivalent to accreditation."
We may be about to find out, to our sorrow: One version of the Higher Education Act reauthorization legislation moving through Congress quietly allows states to become federally recognized accreditors. A senior official in the U.S. Department of Education has confirmed that one part of the legislation would eliminate an existing provision that says state agencies can be recognized as federally approved accreditors only if they were recognized by the education secretary before October 1, 1991. Only one, the New York State Board of Regents, met the grandfather provision. By striking the grandfather provision, any state agency would be eligible to seek recognition.
If such a provision becomes law, we will see exactly why some states refuse to recognize degrees issued under the authority of other states: It is quite possible to be state-approved and a low-quality degree provider.Which states allow poor institutions to be approved to issue degrees?
Here are the Seven Sorry Sisters: Alabama (split authority for assessing and recognizing degrees), Hawaii (poor standards, excellent enforcement of what little there is), Idaho (poor standards, split authority), Mississippi (poor standards, political interference), Missouri (poor standards, political interference), New Mexico (grandfathered some mystery degree suppliers) and of course the now infamous Wyoming (poor standards, political indifference or active support of poor schools).
Wyoming considers degree mills and other bottom-feeders to be a source of economic development. You’d think that oil prices would relieve their need to support degree mills. Even the Japanese television network NHK sent a crew to Wyoming to warn Japanese citizens about the cluster of supposed colleges there: Does the state care so little for foreign trade it does not care that 10 percent of the households in Japan saw that program? You’d think that Vice President Dick Cheney and U.S. Senator Mike Enzi, who now chairs the committee responsible for education, would care more about the appalling reputation of their home state. Where is Alan Simpson when we need him?
In the world of college evaluation, these seven state names ring out like George Carlin’s “Seven Words You Can’t Say On Television,” and those of us responsible for safeguarding the quality of degrees in other states often apply some of those words to so-called “colleges” approved to operate in these states -- so-called “colleges” like Breyer State University in Alabama and Idaho (which “State” does this for-profit represent, anyway?).
There are some dishonorable mentions, too, such as California, where the standards are not bad but enforcement has been lax and the process awash in well-heeled lobbyists. The new director of California’s approval agency, Barbara Ward, seems much tougher than recent placeholders -- trust someone trained as a nurse to carry a big needle and be prepared to use it.
The obverse of this coin is that in some states, regulatory standards are higher than the standards of national accreditors, as Oregon discovered when we came across an accredited college with two senior officials sporting fake degrees. The national accreditors, the Accrediting Commission of Career Schools and Colleges of Technology and the Accrediting Bureau of Health Education Schools, had not noticed this until we mentioned it to them. What exactly do they review, if they completely ignore people’s qualifications?
The notion that membership in an accrediting association is voluntary is, of course, one of the polite fictions that higher education officials sometimes say out loud when they are too far from most listeners to inspire a round of laughter. In fact, losing accreditation is not far removed from a death sentence for almost any college, because without accreditation, students are not eligible for federal financial aid, and without such aid, most of them can’t go to school – at least to that school.
For this reason, if Congress ever decoupled aid eligibility from accreditation by one of the existing accreditors -- for example, by allowing state governments to become accreditors -- the “national” accreditors of schools would dry up and blow away by dawn the next day: They serve no purpose except as trade associations and milking machines for federal aid dollars.
The Libertarian View of Degrees
One view of the purpose and function of college degrees suggests that the government need not concern itself with whether a degree is issued by an accredited college or even a real college. This might be considered the classic libertarian view: that employers, clients and other people should come to their own conclusions, based on their own research, regarding whether a credential called a “degree” by the entity that issued (or printed) it is appropriate for a particular job or need. This view is universally propounded by the owners of degree mills, who become wealthy by selling degrees to people who think they can get away with using them this way.
The libertarian view is tempting, but presupposes a capacity and inclination to evaluate that most employers have always lacked and always will, while of course an average private citizen is even more removed from that ability and inclination. Who will actually do the research that the hypothetical perfect employer should do?
Consider the complexities of the U.S. accreditation system, the proliferation of fake accreditors complete with names nearly identical to real ones (there were at least two fake DETCs, imitating the real Distance Education Training Council, in 2005), phone numbers, carefully falsified lists of approved schools, Web sites showing buildings far from where the owners had ever been and other accoutrements.
To the morass of bogus accreditors in the U.S., add the world. Hundreds of jurisdictions, mostly not English-speaking, issuing a bewildering array of credentials under regimens not quite like American postsecondary education. Add a layer of corruption in some states and countries, a genial indifference in others, a nearly universal lack of enforcement capacity and you have a recipe for academic goulash that even governments are hard-pressed to render into proper compartments. In the past 10 days my office has worked with national officials in England, Sweden, The Netherlands, Canada and Australia to sort out suspicious degree validations. Very few businesses and almost no private citizens are capable of doing this without an exhausting allocation of time and resources. It does not and will not happen.
Should state governments accredit colleges?
State governments, not accreditors or the federal government, are the best potential guarantors of degree program quality at all but the major research universities, but only if they take their duty seriously, set and maintain high standards and keep politicians from yanking on the strings of approval as happens routinely in some states. Today, fewer than a dozen states have truly solid standards, most are mediocre and several, including the Seven Sorry Sisters, are quite poor.
If Congress is serious about allowing states to become accreditors, there must be a reason. I can think of at least two reasons. First, such an action would kill off many existing accreditors without having their work added to the U.S. Department of Education (which no one in their right mind, Democrat, Republican or Martian, wants to enlarge). This would count as devolutionary federalism (acceptable to both parties under the right conditions).
The second reason is the one that is never spoken aloud. There will be enormous, irresistible pressure on many state governments to accredit small religious schools that could never get accredited even by specialized religious accreditors today. The potential bounty in financial aid dollars for all of those church-basement colleges is incalculable.
Remember that another provision of the same proposed statute would prohibit even regionally accredited universities from screening out transfer course work based on the nature of the accreditor. Follow the bread crumbs and the net result will be a huge bubble of low-end courses being hosed through the academic pipeline, with the current Congressional leadership cranking the nozzle.
The possibility of such an outcome should provide impetus to the discussions that have gone on for many years regarding the need for some uniformity (presumably at a level higher than that of the Seven Sorry Sister states) in standards for state approval of colleges. We need a “model code” for state college approvals, something that leading states can agree to (with interstate recognition of degrees) and that states with poor standards can aspire to.
The universe of 50 state laws, some excellent and some abysmal, allows poor schools to venue-shop and then claim that their state approval makes them good schools when they are little better than diploma mills. We must do better.
Should states accredit colleges? Only if they can do it well. Today’s record is mixed, and Congress should not give states the power to accredit (or allow the Department of Education to give states the power) until they have proven that their own houses are in order. That day has not yet come.
Alan L. Contreras
Alan L. Contreras has been administrator of the Oregon Office of Degree Authorization, a unit of the Oregon Student Assistance Commission, since 1999. His views do not necessarily represent those of the commission.
Somehow I missed the meeting where the nation decided to exit public higher education. I was, after all, chief financial officer of a public university.
This is no fantasy. This drama is under way across the nation.
The story line so far is that healthcare and public safety costs finally have squeezed out higher education. Institutions will always find ways to survive. The casualties are the poor students, with the ability but neither the money nor the savvy to navigate falling student aid and rising tuition.
The meeting we need, which no one has called, has this agenda: Why aren’t we discussing the fact that scrambled state and federal priorities are shutting down public higher education and strangling access? And preventing creation of a decent work force?
Some of the leading scholars of higher education – people like Mike McPherson, Morton Owen Schapiro, and Tom Kane, participants in the Forum for the Future of Higher Education -- have clearly shown how soaring costs of Medicaid and infrastructure are pushing higher education out of the food chain of state general funds. Those forces are colliding to shut down the public university system in this nation, preventing thousands and thousands from leading self-supporting lives. We all know this and yet no one has a plan to respond.
I learned this the hard way when I was CFO of the University of Hawaii system, an $800 million, 45,000-student, 10-campus public system for a few years, during a notorious hurricane between the president, the governor and the Board of Regents.
The funding issues were the underlying driver of the tensions there. And all 50 states had the same issues. Yet no one state was talking to the other. Or to the federal government. Not for lack of interest. The avoidance arose from fatigue, from lack of skill and, to a large degree, lack of courage.
No one seems to be focusing on this crisis or crafting a plan to deal with it. The higher education associations are busy fighting for every dollar in current reauthorization bills. Although this is a national problem, it plays itself out most intensely in individual states, And the tension involving Medicaid and state general funds and tuition becomes another zero-sum games at the state houses, where there is no more money.
My goal is to pose a few irreverent questions to shake loose better thinking. Here goes.
Point: Who among us is accountable for those who are not now in college but who ought to be? Those who have the ability but not the money or the savvy to navigate the system? No one. Why not? In education discussions, a balanced institutional budget, public or private, is the operating metric. If the institutions are operating and solvent, no one asks who is not enrolled. As a society, shouldn’t a measure include those able students who are shut out?
Point: Some say, looking to the Founding Fathers who left education out of the Constitution, that the U.S. shouldn’t have a national higher education policy. I’d say we already do.
I’ll illustrate by picking on Williams College and on Yale. My schools. I know they can take it. The implied federal subsidy per student at Williams and Yale is somewhere between $25,000 and $35,000 per year. I get that figure from conservative estimates of the tax-exempt endowment returns and of the tax-deductible donations each year. I am a CFO. Those are the numbers. This is at least twice the cost for a student at any community college.
Our national policy, then, is that the indoor golf-driving nets at Williams, built by tax-deducted dollars, are more important than Pell Grants for community college students working a night shift and going to school. No one has changed the federal tax policy here lately. In federal debate, Pell Grants are always at risk and eligibility changes often.
Point: Commercial-bank interest subsidies for student loans are also more important than Pell Grants for those community college students. That’s our current national policy.
Point: Our national policy is that we can’t find more money for student aid. Yet billions appear for Katrina overnight. This may be deficit spending and raises all sorts of questions to debate. It is our policy that Katrina is more important than creating a work force to sustain the nation.
Point: What about indirect-cost reimbursement for federal research? This varies from 36.5 percent at the University of Hawaii to 60 percent at many fancier schools. This means that the MIT Stata Center, designed by Frank Gehry at who knows what per square foot, is more important than a Pell Grant for community college student. Why not a more modest building in exchange for a few more $350 single-mother childcare Pell Grant payments? So the single mother can stay in school. I wish I were making this up.
Next point: This is about money. The debate within higher education is to justify the costs, not to examine the cost fundamentals.
The drivers, higher education leaders say, are health insurance, wireless Internet fees, premium dining plans. While funding drops, the argument goes, costs have to rise. What, though, is the fundamental cost driver of higher education? Isn’t that the unexamined assumption that a degree must be four years worth of credits? Which most students cannot complete even in five years? Why must a college degree be four academic years and 32 credits, one semester at a time? That model is from the 14th century at the University of Bologna. The pedagogical design constraint in that era was the shortage of books. Would we send an injured or sick child today to a 14th century hospital? Is that what we are doing in higher education?
Point: The past 50 years have produced what scientists and educators call the cognitive revolution. We know so much more about learning. How could we use that knowledge to show young people all that excites our best scientists and scholars in their research every day? Why do we ignore what we know about knowing?
Point. Politics. I’ve yet to meet a college president with a plan to improve national funding for higher education. Meetings in Washington are often about specific earmarks (read: pork) for one institution. Higher education leaders, I believe, underestimate what they can accomplish to the good, for everyone. I can cite no better example than from conversations that I’ve had as part of a Federal Reserve of Chicago project. Many of the Midwest’s leaders have expressed concern that there is nothing they can do. The problems are just too huge. I disagree, I’ve said. Look at their Congressional delegation: Michigan. Illinois. Wisconsin. Indiana. Iowa. Even presidential hopefuls among your senators.
Good ideas count. Help these senators and members of Congress. Give them something to propose. Other states are missing the same chance to lead.
Point: As a society, we know how to educate people. But we don’t need a Manhattan Project or all sorts of high-risk research to start. We know what to do. Why not take a swing at it?
Point -- or question. Have university CFOs, myself included, failed? Miserably so, I’d say. It’s our job to attract sufficient capital to the work. That’s not happening. Operating or long-term.
Why can’t we CFOs demonstrate the value of higher education in a way that leads to investment? Isn’t this our job? I’ve never met a finer group than those CFO colleagues. As a profession, we have let the job become budget triage, not capital formation. I don’t know why, but I can’t interest the National Association of College and University Business Officers in a talk on why we’ve failed. As a profession, we have to face down this failure. These funding issues are our problem.
Point: Do we know our customer? If there are any Gallup-type surveys on what students want in education, I haven’t seen them. I do not mean dropping standards or giving away the store. How can providers, colleges and universities, help? Why do we know more about how much caffeine students want in what form each day than we do about learning preferences? Look at what this young population has done to the music industry. No more albums. They want the music song by song.
Point: What about innovation? Strong economies need innovators. Educators must set the example. I don’t mean to replace faculty. Again, what’s the opportunity here? Look at the iPod and education. My daughter carries her language lab for Arabic with her. Look at the new short books, No-Nonsense Guides or The Oxford series A Very Short Introduction to dozens of topics, from A -- Ancient Philosophy to W – Wittgenstein, with stops at Darwin, Descartes, Design, Intelligence, Music, Shakespeare and Socrates. What about the Quick Study Bar Charts? At least the new dean of my Yale School of Management ought to be alarmed at how good that $4.95 Management guide is. Why does so much curriculum restate what’s available elsewhere? What about all the new skills we need?
These tools are not a substitute for a degree. They are not the quality of a seminar with a great teacher. These tools are excellent sources to topics once available by the semester only. What is the opportunity for liberating faculty here?
Point: Where are the students? They don’t seem even to vote. To every student who came to my office with a complaint, always justified, I asked, “Are you registered to vote?” Never. Puzzled looks at what difference that made. No one has greater direct, immediate interest in voting than a public college and university student, I would explain. A few hundred postcards to the statehouse can get the money for repairs. A few thousand would change the world. Whatever I said was wrong. Only one listened. And he did, after a year, end up with a million dollar earmark from the governor for dormitory work.
Point: And this one troubles me most of all. Are we talking about education or about politics? Do we really want everyone to have a great education? Cynics might say that as a society we’d rather pay welfare and Medicaid than for an education. This is less competition for the rest of us. Is that where we are? Even a cynic would have to admit that education is cheaper (read: lower taxes) than social services.
We are stuck. I can’t describe the U.S. higher ed situation better than my colleague Adam Kahane, in his excellent, slim and readable book Solving Tough Problems – An Open Way of Talking, Listening, and Creating New Realities (Berrett-Koehler Publishers, Inc., 2004).
Problems are tough because they are complex in three ways. They are dynamically complex, which means that cause and effect are far apart in space and time, and so are hard to grasp from firsthand experience. They are generatively complex, which means they are unfolding in unfamiliar and unpredictable ways. And they are socially complex, which means that the people, and so the problems, become polarized and stuck.
Point: Last one. So what? Why does it matter if we support national policies that shut out poor students? How can we not support the typical student at a state college and community college? We all know these students. They are 25. They have families. They work the night shift at McDonald's to contribute to the rent for their parents and grandparents. And then still, these students get to school. Every day they display motivation beyond the imagination of anyone at any of my schools. How can we hold them back?
I know well that my passion can run ahead of the data. I test myself wherever I go. I’ve found that the person serving coffee or pumping gas or bagging groceries is usually a student, regardless of their age. I mean the airport van driver who wants to go to school but hasn’t heard of a Pell Grant. Ask these people. That’s why we have to do better.
Wick Sloane is Chief Operating Officer of Generon Consulting in Massachusetts and a visiting fellow on higher education finance at the Federal Reserve Bank of Chicago. This essay is adapted from a speech he gave at a meeting sponsored by the bank in November. The views expressed here are his own. Â
Federal policy is a strange bird. Though our representatives in Washington will tell us otherwise, rational problem solving simply has very little to do with it. Log rolling, appeasing special interests, political expediency -- all these things are critical to it. But figuring out the best, most efficient way to solve a problem? Irrelevant.
Case in point: the Academic Competitiveness Grants program. A component of the 2006 budget reconciliation bill, the program will provide $3.75 billion to Pell Grant-qualified students who choose to study science, math, engineering, or high-demand languages in college. It is designed to take on what many believe to be two of the nation’s most pressing challenges: improving access to higher education, and preparing American students to compete in a globalized world.
So what’s the problem? Well, it turns out this program would require students to actually show a modicum of aptitude in math or science to qualify for a grant. To be eligible, students would have to have a minimum grade point average, go to school full-time, and have completed a “rigorous” high school curriculum. Of course, for an initiative intended to fund the training of the next generation of scientists and mathematicians, those do not seem like unreasonable demands – except to people in Washington.
“The small student aid program in the bill will only help a fraction of those needing assistance and abandons the federal commitment to prioritize the neediest students,” complained Senator Edward M. Kennedy (D-Mass.). Similarly, Edward M. Elmendorf, senior vice president for government relations at the American Association of State Colleges and Universities, lamented that the grants are more of a “merit-based program” than one aimed at “bringing people who are have-nots into scientific and other fields in a way that’s meaningful.”
Because to be eligible for a Competitiveness Grant a student would also have to be eligible for a Pell Grant, Elmendorf is wrong that the program would neglect financial “have-nots.” It might bypass students who “have not” the aptitude to succeed in math or science, certainly, but isn’t the main point of the program to help produce good scientists and engineers? Not if you’re a politician or higher education lobbyist.
You see, everyone is driven to maximize his or her happiness, or what economists call “utility.” For politicians, that means holding public office and wielding as much power as possible. For denizens of the ivory tower, it’s getting to conduct ground-breaking research, or maximize the prestige of their departments or schools. (Most probably also wouldn’t turn down a raise.) Finally, for students it means paying as little as possible for college.
Understanding this, it is easy to see why the sensible restrictions in the Competitive Grants program make no sense in the calculus of Washington: Politicians gain power when they make as many voters as possible happy, colleges and their employees are pleased when they have more money to do all the things they want to do, and students are content when someone else is paying their bills. They all maximize their utility through programs that get money to as many people as possible, not through programs that are narrowly tailored to efficiently and effectively address a specific problem.
The animosity toward Competitiveness Grants in Washington is just a small example of the irrational results produced by the greed-fueled federal policy making process. Indeed, the same dynamic that has made a seemingly well-engineered program into political kryptonite has created higher education’s biggest problem: rampant tuition inflation.
Here’s how it works: People who want to go to college complain to their representatives in Washington that higher education is too expensive. Politicians, in turn, boost aid to get the petitioners’ votes. Colleges, because they know students can now pay it, then raise their tuition to get more money to conduct research, pay higher salaries, and build nicer amenities to attract the now better-healed students. But then the people who complained originally are priced out of college again … and the cycle repeats.
The only people involved in this self-perpetuating system who do not get direct benefits from it are taxpayers, the folks stuck paying the bills. Indeed, in just the past 10ten years the amount of inflation-adjusted money taxpayers have had to shell out to finance federal student aid ballooned from $16.0 billion to $28.4 billion, a 78 percent increase.
So why don’t taxpayers put a halt to the spiral? After all, don’t they get to vote just like everyone else? Unfortunately, it’s almost impossible for them to target a specific use of their money and say “that’s the problem – eliminate it!” After all, in addition to forking out dough for student aid, taxpayers are footing the bill for the war in Iraq, space shuttles, bridges to nowhere, federal highways, expensive Department of Defense wrenches, and so on. In contrast, higher education advocates lobby only for their specific desires, as do all other special interests, rendering the taxpaying public like a lion trying to guard a meal from jackals and buzzards – it might be able to scare a few off, but it can’t stop them all.
While this system gives many universities, students, and politicians what they want, it produces a ton of waste and irrationality, including granting diplomas to hundreds of thousands of people whose skills and abilities aren’t even close to college level. A December report from the National Center for Education Statistics bears bares this out, finding that in 2003 less than a third of college graduates (not including those with advanced degrees) were sufficiently literate to understand complex prose, and only a quarter could analyze complex documents. Data from Jeremy Rifkin, president of the Foundation on Economic Trends, also illustrates the wages of the system’s irrationality. In 2004 he reported that more than 35 percent of recent college graduates took jobs that did not require a college degree.
As troubling as these educational outcomes are, however, the most perverse result of all of higher education’s federal free-riding will likely be visited on the ivory tower itself: Motivated by increasing frustration with skyrocketing tuition, as well as ever-growing federal expenditures on higher education, in September U.S. Secretary of Education Margaret Spellings announced the formation of a commission charged with designing a “national strategy for higher education.” Such a strategy will almost certainly translate into the federal government asserting a lot more control over American higher education than it does now. Indeed, the commission’s chairman, Charles Miller, helped craft the Texas predecessor to the No Child Left Behind Act and is already pushing a national test for college students. But a national strategy that even approximates NCLB will ensure the demise of American higher education.
By imposing a single “standard” on colleges and universities, rather than letting students decide for themselves what they want from their schools, the free market attributes that have made American higher education the envy of the world will be eradicated. It is only when schools compete for students by offering widely varying curricula and programs that they innovate and excel, just as competing for customers drives the success of car manufacturers, computer companies, pharmaceutical corporations, and all the other industries whose progress we benefit from every day. Take the competition out of higher education by standardizing what they must teach, however, and you can kiss innovation and excellence goodbye.
And therein lies the irony. By using the coercive power of the federal government to enrich itself and its students, American higher education has set itself up to lose the freedom that made it great in the first place, sowing the seeds of its own destruction. But, in the end, it seems that’s just how things go in the mad, mad world of federal policymaking.
Neal McCluskey is an education policy analyst at the Cato Institute’s Center for Educational Freedom.
Accountability, not access, has been the central concern of this Congress in its fitful efforts to reauthorize the Higher Education Act. The House of Representatives has especially shown itself deaf to constructive arguments for improving access to higher education for the next generation of young Americans, and dizzy about what sensible accountability measures should look like. The version of the legislation approved last week by House members has merit only because it lacks some of the strange and ugly accountability provisions proposed during the past three years, though a few vestiges of these bad ideas remain.
Why should colleges and universities be subject to any scheme of accountability? Because the Higher Education Act authorizes billions of dollars in grants and loans for lower-income students as it aims to make college accessible for all. This aid goes directly to students selecting from among a very broad array of institutions: private, public and proprietary; small and large; residential, commuter and on-line. Not unreasonably, the federal government wants to ensure that the resources being provided are used only at credible institutions. Hence, its insistence on accountability.
The financial limits on student aid were largely set in February when Congress hacked $12 billion from loan funds available to many of those same low-income students. With that action, the federal government shifted even more of the burden of access onto families and institutions of higher education, despite knowing that the next generation of college aspirants will be both significantly more numerous and significantly less affluent.
Now the Congress is at work on the legislation’s accountability provisions, and regardless of allocating far fewer dollars members of both chambers are considering still more intrusive forms of accountability. They appear to have been guided by no defensible conception of what is appropriate accountability.
Colleges and universities serve an especially important role for the nation -- a public purpose -- and they do so whether they are public or private or proprietary in status. The nation has a keen interest in their success. And in an era of heightened economic competition from the European Union, China, India and elsewhere, never has that interest been stronger.
In parallel with other kinds of institutions that serve the public interest, colleges and universities should make themselves publicly accountable for their performance in four dimensions: Are they honest, safe, fair, and effective? These are legitimate questions we ask about a wide variety of businesses: food and drug companies, banks, insurance and investment firms, nursing homes and hospitals, and many more.
Are they honest? Is it possible to read the financial accounts of colleges and universities to see that they conduct their business affairs honestly and transparently? Do they use the funds they receive from the federal government for the intended purposes?
Are they safe? Colleges and universities can be intense environments. Especially with regard to residential colleges and universities, do students face unacceptable risks due to fire, crime, sexual harassment or other preventable hazards?
Are they fair? Do colleges and universities make their programs genuinely available to all, without discrimination on grounds irrelevant to their missions? Given this nation’s checkered history with regard to race, sex, and disability, this is a kind of scrutiny that should be faced by any public-serving institution.
Existing federal laws quite appropriately govern measures dealing with all of these issues already. For the most part, accountability in each area can best be accomplished by asking colleges and universities to disclose information about their performance in a common and, hopefully, simple manner. No doubt measures for dealing with this required disclosure could be improved. But these three questions have not been the focus of debate during this reauthorization.
On the other hand, Congress has devoted considerable attention to a question that, while completely legitimate, has been poorly understood:
Are they effective? Do students who enroll really learn what colleges and universities claim to teach? This question should certainly be front and center in the debate over accountability.
Institutions of higher education deserve sharp criticism for past failure to design and carry out measures of effectiveness. Broadly speaking, the accreditation process has been our approach to asking and answering this question. For too long, accreditation focused on whether a college or university had adequate resources to accomplish its mission. This was later supplanted by a focus on whether an institution had appropriate processes. But over the past decade, accreditation has finally come to focus on what it should -- assessment of learning.
An appropriate approach to the question of effectiveness must be multiple, independent and professionally grounded. We need multiple measures of whether students are learning because of the wide variety of kinds of missions in American higher education; institutions do not all have identical purposes. Whichever standards a college or university chooses to demonstrate effectiveness, they should not be a creation of the institution itself -- nor of government officials -- but rather the independent development of professional educators joined in widely recognized and accepted associations.
Earlham College has used the National Survey of Student Engagement since its inception. We have made significant use of its findings both for re-accreditation and for improvement of what we do. We are also now using the Collegiate Learning Assessment. I believe these are the best new measures of effectiveness, but we need many more such instruments so that colleges and universities and choose the ones most appropriate to assessing fulfillment of learning in the scope of their particular missions.
Until the 11th hour, the House version of the Higher Education Act contained a provision that would have allowed states to become accreditors, a role they are ill equipped to play. Happily, that provision now has been eliminated. Meanwhile, however, the Commission on the Future of Higher Education, appointed by U.S. Secretary of Education Margaret Spellings, is flirting with the idea of proposing a mandatory one-size-fits-all national test.
Much of the drama of the accountability debate has focused on a fifth and inappropriate issue: affordability. Again until the 11th hour, the House version of the bill contained price control provisions. While these largely have been removed, the bill still requires some institutions that increase their price more rapidly than inflation to appoint a special committee that must include outsiders to review their finances. This is an inappropriate intrusion on autonomy, especially for private institutions.
Why is affordability an inappropriate aspect of accountability? Because in the United States we look to the market to “get the prices right,” not heavy-handed regulation or accountability provisions. Any student looking to attend a college or university has thousands of choices available to him or her at a range of tuition rates. Most have dozens of choices within close commuting distance. There is plenty of competition among higher education institutions.
Let’s keep the accountability debate focused on these four key issues: honesty, safety, fairness, and effectiveness. With regard to the last and most important of these, let’s put our best efforts into developing multiple, independent, professionally grounded measures. And let’s get back to the other key issue, which is: How do we provide access to higher education for the next generation of Americans?
Douglas C. Bennett is president and professor of politics at Earlham College, in Indiana.
CAMBRIDGE, MASS. -- Edward Moore Kennedy, the senior U.S. senator who struggled through Harvard his first time through, returned to his alma mater Monday afternoon for a convocation all his own, to receive a Doctor of Laws earned through his relentless championing, in 46 years in the Senate, of the weak and the poor and the sick.
“I’m proud to be here for him today,” said John Patti, who works for the Harvard Facilities Maintenance Organization. “He’s a very sincere, honest person. He’s there for the people. We like him.” Patti was on duty, outside of Sanders Theatre, filled with 1,600 of the 8,000 people who had sought tickets to the event.
The sentiment was the same downstairs, by the dining hall. “When I think of Kennedy, I think of Massachusetts. I think of good things.” said Kerry Maiato, a dining hall worker on a break, watching Portuguese soccer on television. “I think of a leader,” said Rui Silva, his colleague.
Harvard has held only 13 one-man, one-degree ceremonies. The most recent was September 18, 1998, for the South African President Nelson Mandela. The first, to which Senator Kennedy referred in his remarks, was April 3, 1776.
“Now I have something in common with George Washington -- other than being born on February 22,” Senator Kennedy said after receiving his degree. “It is not, as I had once hoped, being President. It is instead this rare privilege of receiving an honorary degree from Harvard at a special convocation.” Harvard held the special ceremony because Kennedy, stricken with brain cancer, had been unable to attend commencement last spring.
This afternoon, with a trumpet fanfare, Kennedy entered and walked slowly across the stage to the first of many standing ovations. He handed his silver-handled cane to his wife as he sat. Kennedy left his cane behind when he walked across the stage to embrace the cellist and Harvard alumnus Yo Yo Ma and shake the hand of the current Harvard student and pianist, Charlie Albright, who had played two Gershwin preludes. He left the cane behind when he walked to receive his degree and address the crowd himself.
After a prayer from the Rev. Peter J. Gomes, Harvard's chaplain, James Onstad, Harvard ’09, sang an a capella rendition of “America the Beautiful.” The audience was invited to sing the fourth verse. Senator Kennedy gently mouthed all the words. Harvard granted Vice President-elect Joe Biden a decent seat in the audience, across an aisle from his colleagues, Sens. John F. Kerry Jr. and Christopher J. Dodd. Jeanne Shaheen, U.S. senator-elect from New Hampshire, was there, with Nikki Tsongas and Barney Frank from Congress.
I went to cheer for the College Cost Reduction and Affordability Act of 2007, yet another of the
Photo: Peter Agoos
accomplishments for which Senator Kennedy sought no fanfare. And which, I fear, we, the people, take for granted as just something Senator Kennedy does.
My day began when I arrived in the parking lot of Bunker Hill Community College for the 7 a.m. class I teach there. The parking lot is almost empty then. As usual, an old sedan from Massachusetts and another from New Hampshire were already there. As usual, I parked a few spaces away to grant some privacy to the students asleep in the cars. Without Senator Kennedy’s lifetime of work, I wonder if those two would be able to be in school at all. I despair for my students as I pray for Senator Kennedy’s health. No one in the U.S. Senate comes close to Kennedy’s compassion for students who are poor, never mind his legislative skills.
In plain speaking, for the 2007 College Cost Reduction Act, Kennedy, first, took $20 billion over five years away from line items that sent the money to banks and financial institutions as loan subsidies and fees. That’s not a typo. From banks. Kennedy took $20 billion headed to banks, with all their lobbyists, campaign donations and influence, and sent the money instead directly to poor students as increased grants and less expensive loans. Shifting billions from the powerful to the poor is not supposed to be possible in Washington today.
“Senator Kennedy realized that student loan defaults most affected lower-income students. He knows how to get things done. He, more than any other elected official, is responsible for the size and shape of federal education policy as it exists today,” Terry W. Hartle, a Kennedy education staffer from 1986 to 1993 and now senior vice president for government and public affairs at the American Council on Education, told me by phone Monday morning. “Senator Kennedy has been a leader in every educational piece of legislation since the 1963 Vocational Education Act.”
The question I can’t shake is how Senator Kennedy became such a champion for the people he called, in his remarks, “the ones who need your help the most.”
I kept asking.
“He grew up in pretty comfortable surroundings, but he does not let that get in the way of helping people,” said Julia Mario, a graduate of the College of New Jersey, and a member of the Harvard events staff.
“He’s an expert in the politics of helping,” said Paolo Cueva, a 2007 Harvard government major who was on the events staff because she couldn’t get a ticket to the event. “I worked in the Senator’s Boston Office. He changed my life. When I went to work there, I thought I was going to find politics and backstabbing and all that. Everyone in the office is friends. Everyone loves to get there in the morning and no one wants to leave. Everyone works their butts off. When we got the message that he was sick, he just gave the word that we should keep on working. It’s the politics of caring.”
Colleen Richards Powell, another former Kennedy staffer there, told me, “He’s about hope and possibility and resilience.”
Before the ceremony I asked the question of Caroline Kennedy, the senator’s niece. “It’s just part of who he is,” she said.
Senator Kennedy, ending his remarks to another standing ovation, reminded me that how Kennedy became a champion of the poor is not the point. I’m glad, for my students, that he is that champion. “I have lived a blessed time,” he said. “Now, with you, I look forward to a new time of aspiration and high achievement for our nation and the world.”
Recent headlines have been full of disappointment for Americans, particularly regarding institutions that affect their daily lives. First it was the banks who argued that they were “too big to fail” in asking for a federal bailout and then proceeded to award obscene bonuses to their executives. Then it was the automakers, who made a mockery of the maxim “what’s good for General Motors is good for the country” when CEOs of the “big three” took corporate jets to Washington to plead for their own rescue package.
Now, it seems, higher education is joining the list. As colleges and universities hike tuition and cap enrollments while pleading for billions of federal dollars, we have new evidence that public disappointment and disillusionment with higher education are building rapidly. Through new opinion research conducted by our organization, the National Center for Public Policy and Higher Education, and Public Agenda, the American public is sending messages that colleges and universities and state and federal policymakers cannot afford to ignore. These messages include:
Alma mater has become Higher Ed, Inc. While most academics bristle at the admonition for higher education to run more like a business, that is exactly what’s happening in the public’s view, and they’re not sure they like it. We were surprised enough when more than half of Americans voiced the belief three years ago that colleges and universities are more interested in their bottom lines than in providing a good education for students. We have been even more surprised -- and dismayed -- to see that figure jump almost 10 percentage points in just three years.
Let’s be clear. The public is not saying that they do not want higher education institutions to focus on efficiency and effectiveness. In fact, they believe colleges and universities could educate more students with the resources they have. When they see tuition rates outpacing the average family’s paycheck even in times of economic distress, or read stories about excessive compensation of college presidents or about universities bailing out athletic programs while furloughing faculty, it isn’t hard to see how people might be just a bit skeptical about higher education’s priorities.
We can walk and chew gum when it comes to balancing access, quality and cost. In some of our earlier research, we uncovered a pervasive belief among college presidents that cost, access, and quality are locked in a zero-sum game, one that we dubbed “the iron triangle.” Expanding access means either increasing costs or sacrificing quality, containing costs requires limited access or skimping on quality, and so on. As in previous recessions, we are seeing this belief in action in the states, as some of our largest public college and university systems are freezing or rolling back enrollment and/or hiking tuition in the name of preserving quality.
The problem is that a growing majority of Americans just don’t buy that line of argument. More than half of those surveyed agree with the statements that colleges could spend less and still provide a quality education and that colleges could serve more students without hiking prices or damaging quality. These numbers have held steady over the past three years, which is not surprising, given that most people are experiencing significant changes in the workplace due to the recession, international competition, and technological change. They have not seen evidence of parallel innovations in higher education, and they’re wondering why.
We can’t live without higher education, but can we live with it? Simply put, people are feeling trapped. The “squeeze play” -- the combination of beliefs that higher education is essential but that many qualified students are being shut out -- continues and the majority agreeing with both of these statements has reached record highs. This trend is likely to continue as the economy continues to punish the undereducated most severely, and the fiscal slump prompts more tuition hikes and enrollment caps in the face of severe national economic distress. As the squeeze on students and families intensifies and confidence in the altruistic mission of colleges erodes, higher education’s position in the competition for public resources when the economy recovers may be seriously undermined.
So what does this mean?
For colleges and universities and their advocates in Washington, the message being sent by the public is clear. Spending time and money explaining why higher education is essential to the nation’s future is not the answer. Our data show very plainly that the American people get it when it comes to the need for higher education. But those same data also depict a public that is quickly becoming increasingly skeptical of the leadership and management of colleges and universities.
Rather than acknowledging the public’s concerns, some higher education lobbyists and advocates instead criticize the public as uninformed. While the average American may not understand the details of the higher education enterprise, the point is that the American people are anxious, frustrated, and not convinced that colleges and universities are being managed in ways that are consistent with their values. A PR campaign will not fix that. In this case, actions truly will speak louder than words.
For policy makers at the state and federal levels, these numbers represent a signal that voters are increasingly interested in what they are doing and will do to keep higher education affordable and accessible. The answers will not be easy in this campaign season, with the federal stimulus tapering off and many states facing severe budget shortfalls.
The inconvenient but unavoidable truth is that the time has come to talk about real changes in how higher education is funded and delivered.
The authors of the Government Accountability Office’s for-profit secret shopper investigation pulled off a statistically impressive feat in August. Let’s set aside for the moment that on Nov. 30, the government watchdog quietly revealed that its influential testimony on for-profit colleges was riddled with errors, with 16 of the 28 findings requiring revisions. More interesting is the fact that all 16 of the errors run in the same direction -- casting for-profits in the worst possible light. The odds of all 16 pointing in the same direction by chance? A cool 1 in 65,536.
Even the most fastidious make the occasional mistake. But the GAO, the $570 million-a- year organization responsible for ensuring that Congress gets clean audits, unbiased accounting, and avowedly objective policy analysis, is expected to adhere to a more scrupulous standard. This makes such a string of errors particularly disconcerting.
In fact, the GAO is constituted precisely to avoid such miscues. Its report-vetting process entails GAO employees who are not involved with the project conducting a sentence-by-sentence review of the draft report, checking the factual foundation for each claim against the appropriate primary source. While the research is compiled and proofed, legislators who requested the investigation may keep in routine contact with the GAO to stay apprised of the inquiry.
The GAO issues hundreds of reports a year, and by most accounts revisions of the kind released two weeks ago are almost unheard of. As a former GAO assistant director who worked at GAO for a decade on issues including higher education explained to us Wednesday, the organization’s rigorous review process leaves little or no room for error.
He said, “[It is] extremely rare for the GAO to issue corrected testimony or reports. In fact, in my 10 years that I was there, I never once saw that happen.” He went on to say, “It is stunning to me, given [the GAO] process, how this many errors could have happened. It raises a lot of questions as to the pressure the GAO was under. . . . They must be sweating bullets over at GAO.”
What kinds of mistakes are we talking about here? The corrections were generally changes in emphasis or wording that altered the complexion of the finding. For instance, the original report claimed that a financial aid officer purposely ignored an undercover applicant’s supposed $250,000 in savings when calculating eligibility for financial aid. What the report neglected to reveal was that the financial aid representative did so “upon request by applicant.” This does not necessarily exonerate the financial aid officer, but it does raise questions about the impetus for the inappropriate behavior.
In another instance, an applicant went from being informed that he or she “could take out the maximum in student loans” despite not actually needing that much (revised) to being told that he or she “should” (original) do so. And in a different scenario, a for-profit official supposedly told an applicant that massage therapists could earn up to $100 an hour -- when the review showed that the official actually said that the applicant could expect to earn up to $30 an hour, a figure that is below the Bureau of Labor Statistics’ estimate of $34 for therapists in California.
The list goes on and on. Each of the GAO’s 16 corrections indicates that the recorded evidence was presented in an inaccurate or incomplete fashion, in every case portraying for-profits in a negative light.
What happened? Our source speculated that the pressure of issuing the report in time for Sen. Tom Harkin’s Aug. 4 committee hearing and in time to support the issuance of the Department of Education “gainful employment” regulations led GAO investigators to be less careful than normal.
The problem is that the “we were in a hurry” defense doesn’t explain why the errors all point in the same direction — one that happens to reflect the policy preferences of the chairman of the Senate HELP committee and of administration appointees at the Department of Education. Lanny Davis, the veteran Clinton hand who has now taken to the barricades for the for-profit providers, told us Wednesday that he thinks there is an obvious distinction between “gross incompetence” and “setting out to deceive” — and that the original GAO report crosses the line. “Given that all 16 of the so-called mistakes portrayed career colleges in a negative light, I believe there is no sliver of possibility that this was not an intentional distortion of the truth by somebody with an agenda or somebody who was pushed into doing it,” Davis argued.
The issue goes beyond incompetence or politically motivated misinformation in a government report; the message of the GAO’s initial publication has been “baked in” to the Harkin hearings and the Department of Education’s rulemaking on gainful employment.
Our GAO source observed that the original report’s finding that all of the investigated providers were up to no good was “woven into the overarching narrative that there are a lot of bad actors out there that have to be dealt with.” Even though the GAO’s revisions were substantial enough to merit a public correction, the narrative has crystallized and been wielded by Harkin and Department officials to press the case for their agendas as recently as this week (see Harkin’s December 14 speech on the Senate floor). Even more troubling, despite finally acknowledging the litany of errors that permeate the report, GAO spokespeople have asserted that “nothing changed with the overall message of the report, and nothing changed with any of our findings."
The bigger question is whether we can be confident that the GAO has caught all of the errors or is being honest with the report’s critics. The former GAO official speculated that the recent corrections could be just the "tip of the iceberg in terms of the mistakes made in the report. It calls into question the entire report because it shows that there were not sufficient quality controls in place for whatever reason.” Complicating things is that the GAO is not subject to Freedom of Information Act Requests, which makes getting to the bottom of things just a bit difficult. (Of course, the Department of Education is subject to FOIA requests, and the advocates for the career college sector have filed suit to obtain the primary source materials.)
Regardless of how this gets sorted out, this affair has crippled efforts to talk honestly about problems that need to be addressed. It is hardly shocking that there are unscrupulous for-profit providers trafficking in misinformation and misusing federal student aid dollars. Every sector, public and private, faces such problems. And the practices of all providers that collect public funds deserve to be scrutinized and monitored. The government has every right to police how its student aid dollars are being spent.
But trampling public confidence in an esteemed federal watchdog helps no one — not the individual students that are being taken advantage of by fly-by-night providers, not the colleges that are acting in good faith, not the bureaucrats charged with regulating the sector, and not the taxpayers who wish to root out corruption in student lending.
Frederick M. Hess and Andrew P. Kelly
Frederick M. Hess and Andrew P. Kelly are director of education policy studies and a research fellow in education policy studies, respectively, at the American Enterprise Institute.
Friday's op-ed in these pages, “Sweating Bullets at the GAO,” by representatives of the American Enterprise Institute, offers a lopsided, inaccurate depiction of the Government Accountability Office's recent update to its Aug. 4 report on the recruiting practices at for-profit colleges.
First and foremost, the authors ignore the fact that these updates did not alter the very troubling findings or conclusion of the report. While the GAO made some revisions and clarifications of the long list of misleading practices it documented, the finding stands -- every single school its investigators visited engaged in misrepresentation, deception or outright fraud.
In an attempt to paint the GAO’s update as a dramatic development, the authors cite an anonymous source who claims that the GAO rarely issues this sort of revision.
That’s just not true. According to the GAO’s spokesman, GAO has issued 12 such revisions in the last year alone, including a similar one in September. Additionally, their assertion that all of the edits were made to correct “errors” that cast “for-profits in the worst possible light” is misinformed. Many are simple clarifications, and some bolster the GAO’s findings.
And let’s not forget -- the GAO’s discovery of fraudulent or deceptive recruiting tactics was just the tip of the iceberg. My Committee has issued three reports based on data we collected from 30 for-profit education companies that raise several more serious concerns about whether many for-profit colleges have the best interests of their students at heart.
We’ve found that 95 percent of for-profit students end up saddled with debt (as compared with 16 percent of community college students), and that 57 percent of students at 16 for-profit schools withdrew without a diploma in a single year. Most recently, we documented a startling increase in the amount of military education benefits flowing into this sector in the last year.
Given the findings of this investigation, it’s no surprise that the for-profit education industry has turned the full force of its multimillion dollar lobbying operation on the GAO in an attempt to muddy the waters and distract from the growing consensus that their industry needs greater regulatory oversight.
Far from “sweating bullets,” the GAO is helping to illuminate a growing problem.
Senator Tom Harkin, a Democrat from Iowa, is chairman of the Senate Committee on Health, Education, Labor and Pensions.