Students may soon be able to use Pell Grants to attend coding boot camps and enroll in MOOCs and other nontraditional programs under an experiment that the Education Department is considering conducting.
The pilot project, which has been in the works for several months, would let colleges contract out entire programs to education-technology companies and retain the programs’ eligibility for federal grants and loans. Colleges are now limited in how much of a program they can outsource.
If successful, the test could open the door to federal student aid for a host of ed-tech upstarts that offer alternatives to traditional degrees, such as badges and microcredentials. Beneficiaries could include providers of massive open online courses like edX and Udacity, and coding schools like General Assembly and Pluralsight.
Details of the experiment are still being worked out, including the thorny question of who would validate the partnerships — existing accreditors, new entrants, or both. On July 30 the department will bring together colleges, companies, and accreditors to discuss issues of quality control.
“They’re trying to sort out, What could this look like?” said Southern New Hampshire University’s president, Paul J. LeBlanc, who has just completed a three-month stint at the department as an adviser on the pilot, dubbed “Project Badger” (after badges). “There is still a lot of internal wrangling with how do we do this well, how do we prevent abuses,” he said.
A department official stressed that no decisions had been made on the pilot, which is known as an “experimental site,” but said the agency was encouraged by “the exciting work” being done on some campuses.
“We’re interested in encouraging more collaborations between institutions and new providers,” the official said.
Accommodating New Players
“Noninstitutional providers,” as the diverse mix of ed-tech companies are collectively known, have become popular with lawmakers, who see them as a way to get more students to earn a postsecondary credential more quickly and at a lower cost. Yet the companies, which don’t offer degrees and don’t rely on the credit hour, don’t fit the mold of traditional accreditation. Finding a way to accommodate them has become a priority for the Obama administration and congressional Republicans alike.
Partnerships between colleges and ed-tech companies have become more common in recent years, with agreements like the one between the University of New Haven and Galvanize, an unaccredited coding school, making national headlines. Still, most of the arrangements have been narrower, with colleges outsourcing their marketing or technology, but not their academic affairs.
That’s partly due to federal rules that bar colleges from outsourcing more than a quarter of a program’s instruction or training — 49.9 percent if the program is approved by an accreditor. Under the rules, programs that exceed those limits lose their ability to award federal aid.
Lifting the caps on outsourcing would pave the way for more partnerships, and allow third parties to play a bigger role in educating students at traditional colleges. As such, the pilot is likely to face pushback from faculty members worried about ceding academic control and from consumer advocates nervous about expanding the role of for-profit companies in higher education. It could also raise alarms among community colleges and some state comprehensive universities, which might lose students to the newly eligible programs.
But Michael B. Horn, a co-founder of the Clayton Christensen Institute for Disruptive Innovation, said he expected the grumbling from faculty members to be muted, in part because the agreements can provide desperately needed revenue to struggling colleges.
“It will ultimately challenge the existing institutional model, but in many ways that is already under threat,” he said. A pilot “gives traditional institutions a window to transform themselves,” he said, “to experiment, and see what does and doesn’t work.”
Ben Miller, senior director for postsecondary education at the Center for American Progress and a frequent critic of for-profit colleges, said he was not worried about letting more companies into the federal student-aid system under a “controlled and supervised” experiment.
“This is the right way to approach letting new players into the system,” he said. “And if they produce good results, it makes sense to allow students to use their aid there.”
Still, not everyone is convinced that the government needs to intervene in the market. Richard Garrett, director of the Observatory on Borderless Higher Education, said he worried that federal subsidies could make the companies less efficient, less driven to innovate. He argued that it might be better to let the fledging companies evolve “without the crutch of public subsidies.”
“A lot of these experiments are young and unproven,” he said. “To me, it feels a bit premature and a bit faddish.”
Quality Control
The debate over opening up the student-aid system to new players comes as the department is preparing guidance for colleges that are seeking access to aid for competency-based programs under another pilot project.
In both experiments, the department is trying to encourage innovation, while safeguarding the student-aid system from fraud and abuse. It’s a difficult balancing act, particularly because there’s disagreement about who should be in charge of quality control.
Some regional accreditors, including groups that represent New England and the West, have said they’re interested in expanding their purview to cover such partnerships. They argue that accreditors, as the original guardians of quality, are best positioned for the task.
“We need to be working within the changing landscape of higher education,” said Mary Ellen Petrisko, president of the Western Association of Schools and Colleges’ Senior College and University Commission.
Asked if accreditors might evaluate partnerships differently than they judge traditional colleges, Ms. Petrisko said no. “I don’t see this as a qualitatively different thing, as far as outcomes are concerned,” she said.
But others argued that the arrangements should be held to a higher standard, with a greater emphasis on student learning and labor-market outcomes.
“This could go wrong really quickly if you don’t have good quality assurances,” said Amy Laitinen, deputy director for higher education at New America.
Ms. Laitinen said she doubts whether the regional accreditors are up to the task, but is encouraged by their willingness to innovate.
Some lawmakers, meanwhile, are calling for the creation of alternative pathways to accreditation. This spring two U.S. senators — Marco Rubio, a Florida Republican, and Michael Bennet, a Colorado Democrat — sought to add language to the budget blueprint for “a new outcome-based process for authorizing innovative higher-education providers.” Last year Sen. Mike Lee, a Utah Republican, introduced a bill that would leave the task to the states. The top Republican on the Senate education committee, Lamar Alexander of Tennessee, has expressed interest in both approaches.
If the department goes ahead with the pilot, it could be “a fertile testing ground for Congress” as it prepares to reauthorize the Higher Education Act, Ms. Laitinen said.
“It will be messy, and it will be hard to do it well,” she said. “But in some ways, that’s the point.”
Kelly Field is a senior reporter covering federal higher-education policy. Contact her at kelly.field@chronicle.com. Or follow her on Twitter @kfieldCHE.
