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Obama's Higher Ed Plan: Close, but No Cigar


The college affordability plan President Obama has been touting all week was finally released this morning, and universities are already paying close attention. The core idea is relatively simple: Building on the “college scorecard” idea, in which colleges are publicly ranked on criteria including tuition costs, student loan debt, graduation rates and average income of graduates, the new plan ties these indicators to receiving Federal aid. Schools that perform well on these measures will receive more aid, while schools that perform poorly could see their aid diminished or revoked. If everything works as planned, the new rules would put pressure on colleges to lower tuition and focus on teaching skills that will prepare students to be successful in the workforce.

Buried in the proposal were some eye-catching details; as the NYT reports,

Mr. Obama’s proposal urges colleges to experiment with approaches that reduce costs. The plan mentions so-called competency-based degrees, in which college credits are based not on the hours students spend in classrooms, but on how much they can show they know.

Another approach mentioned in the plan is online education through what have become known as “massive open online courses,” or MOOCs, which are mostly free. Mr. Obama will also urge consideration of three-year degree programs and dual enrollment programs in which high school students can begin to earn college credits.

On the one hand, the theory behind this plan is solid. We’ve seen how schools, particularly for-profit “diploma mills”, take advantage of Federal aid while granting students relatively useless degrees and saddling them with a heavy debt burden. In addition, we’ve spoken often about the need for universities to value what students learn over how long they spend sitting in classrooms, and we’ve long been excited about MOOCs, so we’re glad to see the President embrace these ideas as well.

Yet the plan has some key weaknesses that make us doubt that it will have the impact the President hopes. Over at Marginal Revolution, Tyler Cowen notes that rewarding colleges for producing high earners could discourage colleges from accepting less gifted students:

Given that previous educational subsidies mostly are converted into higher rates of tuition and thus captured by the school, the second plank would simply boost the subsidy to high performing colleges.  There are plenty of ways to do that and in any case it doesn’t seem to help today’s marginal students, who probably cannot do well in those environments in any case.  Furthermore colleges with high graduate earnings are very often those located in or near high-paying cities.  Should we be subsidizing on that basis?  Should we be giving colleges an incentive to identify and deny admission to potential lower earners?  Do we really want the federal government helping to crush humanities majors?  And I don’t see that the kind of rating system under discussion here is measuring actual value added, ceteris paribus of course.

It’s still too soon to call the plan a mistake, as much will come down to how exactly these indicators are measured. But there are a number of troubling early signs, and the plan will be difficult to implement on a national scale without some dangerous unintended consequences.

[US President Barack Obama speaks on education at University of Buffalo, the State University of New York, on August 22, 2013 in Buffalo, New York. Photo courtesy of Getty Images]

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  • Corlyss

    Federal aid=a gateway drug

  • Joe Eagar

    I don’t think encouraging universities to focus on potential high earners is a bug.

    I think it’s a feature. At the moment, American society demands that everyone who wants to be middle class attend college, whether they (or their occupation) benefits from having a university education or not.

    One way to reverse this trend is to cut off lower-earner students. The labor market should adjust by accepting more people without college degrees, basing employment more on demonstrated skills than pieces of paper.

    Thinking of higher education as a right is very tempting. But in America, higher education is far too often viewed as a means of enforcing class segregation. The right to attend college has become a compulsion.

  • Jim__L

    So, what kind of world is Obama creating?

    – With college funding policy, high-achieving academics will be sought out by colleges and low-achievers will be cast into the outer darkness. (Ironic that Poli Sci majors might be among them, although lobbying will likely be a high-earning growth industry.)

    – With health-care policy, “high-achieving” fitness obsessives will be sought out by “results-oriented” health plans, and lower “achievers” will be cast into the outer darkness.

    It is absolutely no surprise that the US government is being reshaped to give preferment to this kind of Credentialed Elite at the expense of everyone else (who, in the minds of the Credentialed Elite, can go hang.)

    I wonder when people will realize that those being preferred here are a tiny fraction of the electorate — perhaps no more than 1% — and will actually be fairly easy to topple once the majority figures out how badly we’re being abused.

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