President Obama has promised to “shake up” higher education, and his college-affordability plan, unveiled last week in a speech at the University at Buffalo, would do just that.
If enacted by Congress, his proposals would transform how higher education is financed in America, tying federal aid to college and student performance, and compelling states to spend more on public institutions. The plan would make student-loan debt repayment more manageable for borrowers and advance new modes of learning, such as massive open online courses and competency-based education.
But the ambitious plan, which builds on state-based experiments in performance-based financing and on the Obama administration’s own budget proposals, relies on largely untested theories about what drives student and college behavior. No one really knows if the ideas would make higher education more affordable, and even some of the president’s supporters have fretted about the potential unintended consequences of his plan to rate colleges, and to allocate aid based on those ratings.
Getting the plan through Congress won’t be easy, either. Republicans have resisted efforts to link student aid to costs and learning outcomes in the past, arguing that the federal government should not pick winners and losers among colleges. In a statement issued after the president’s speech, the chairman of the House of Representatives education committee, Rep. John Kline of Minnesota, warned that rating colleges could stifle innovation and lead to “federal price controls.”
Sen. Lamar Alexander of Tennessee, the top Republican on the Senate education committee, worried about “turning Washington into a sort of national school board for our colleges and universities.”
While Republicans might back the president’s efforts to tighten academic-progress requirements for student-aid recipients, that idea probably would not get much support from Democrats and student groups. And given budget constraints, there’s almost no chance that Congressional appropriators will provide the $1.25-billion the president is seeking in incentive grants for states and colleges.
Still, Mr. Obama can move a few pieces of the plan on his own, including his proposal to create a new college-rating system based on measures of access, affordability, and student outcomes. He can encourage more student borrowers to enroll in federal income-based repayment options. And he can use the Education Department’s “experimental sites” authority to test new ways of awarding federal student aid, such as allowing it to go to high-school students taking college courses or to pay for tests that measure prior learning and competencies.
Empowering Consumers?
Just publishing the ratings could help prospective students cut through the clutter of data and make more-informed decisions about where to attend college, said Robert Shireman, a former top Education Department official. The key, he said, would be to make it simple, well designed, and visible to students and guidance counselors.
Publishing the ratings could also build political support for awarding government funds based on results, by shining a light on poorly performing institutions, said Amy Laitinen, deputy director for higher education at the New America Foundation.
“It will make it harder for Congress to justify continuing to spend money on failing institutions,” she said.
Skeptics say there’s little evidence that would-be students are aware of existing information on college performance, or that it influences their choice of where to enroll. As one senior Republican aide put it, prospective students don’t look at low graduation rates and assume they’ll fail—they wonder, “What’s wrong with all those other suckers?”
Taking college ratings to the next level and tying them to financial aid might actually reduce political support for student aid, because it would shift money away from colleges in some appropriators’ districts, the aide said.
“If the money isn’t going to schools in their districts, why the hell would they fund Pell anymore?” the aide asked. “By keeping it student-based, there is equal pressure on every member to support Pell.”
College lobbyists, meanwhile, are uneasy about plans to rate their institutions based on imperfect data. They point out that some of the data the administration is proposing to use are incomplete or unavailable, including federal graduation rates that don’t take account all students, and earnings data that are still missing from the government’s College Scorecard comparison tool. (Ms. Laitinen said it’s ironic that college lobbyists are bemoaning the lack of good data when they played a major role in thwarting efforts to create a “unit record” system, to track student outcomes more broadly.)
‘Perverse Incentives’
Even some of Mr. Obama’s strongest supporters have expressed only lukewarm support for the college-ratings idea. After his speech in Buffalo, the U.S. Public Interest Research Group issued a statement that praised the president’s efforts to provide students with “more options and better information,” but did not endorse the ratings proposal. Ethan Senack, the group’s higher-education associate, said it was not taking a position on the plan.
The Institute for College Access and Success, known as Ticas, said it welcomed efforts to “reward colleges that prioritize access, affordability, quality, and student success,” but warned that it would be “easy to do this poorly and hard to do it well.”
The biggest concern among student and consumer groups is that the ratings would encourage colleges to dumb down their standards or turn away at-risk students. Some fear the earnings information could discourage students from pursuing low-paying public-service professions, such as teaching and social work. Ultimately, they ask, is it really fair to deny federal aid to students because their college charges too much or because their state cut spending on higher education, forcing the college to raise tuition?
In a similar vein, they worry that requiring students to complete a certain percentage of their classes before receiving continued student-aid funds, as the president proposed, could penalize nontraditional students, who often take longer to complete their programs because of work and family obligations.
“If you got the incentives right, you could get more students to graduate,” said Rory O’Sullivan, policy and research director of the Young Invincibles, an advocacy group representing 18- to 34-year-olds. “But you don’t want to unintentionally punish students who face the biggest barriers to completion.”
The secretary of education, Arne Duncan, told reporters on Thursday that the administration shared advocates’ concerns about “perverse incentives” and would “take its time developing the new rating system.” In a fact sheet describing the president’s plan, the White House promised to hold public hearings around the country to gather input from students, parents, state leaders, college presidents, and others to develop gauges that would “put a fundamental premium on measuring value and ensure that access for those with economic or other disadvantages are encouraged, not discouraged.”
A related challenge will be choosing data that are meaningful to all students, given the wide variation in net prices and postgraduate earnings within institutions, said Ben Castleman, an acting assistant professor of education at the University of Virginia who has studied how prospective students make decisions.
“It’s important to choose elements that will give students a good sense of their potential for success,” he said.
Untested Ideas
The president’s plan to tie aid to college performance builds on his previous proposal to expand the Perkins Loan program and award additional aid to colleges that keep tuition down, provide “good value,” and serve low-income students effectively. That idea, which has appeared in various forms in the last five presidential budgets, hasn’t gotten much traction in Congress, though some college and advocacy groups have embraced it.
More than a dozen states appropriate some money to colleges based on performance measures, such as credit or degree completion. But only a handful allocate a large portion of their tax dollars using such formulas, and it’s too soon to say whether the nascent experiments are working.
In Tennessee, the first state to appropriate nearly all of its higher-education money based on outcomes, the policy has led to more support for struggling students, along with improvements in remedial education. Still, some faculty members say they’ve felt pressure to water down their courses to get more students to graduate.
The idea of using student aid as an incentive for students’ timely progress is being tested by the nonprofit research group MDRC, with support from the Bill & Melinda Gates Foundation. The project provides students with extra aid if they take a minimum course load and maintain a C average—an effort to encourage them to complete college faster. Early results suggest that the additional aid has had a “modest” effect on student achievement but little impact on retention.
President Obama has taken a slightly different approach from the research group, proposing stricter standards of “satisfactory academic progress” for existing aid, not new money. That idea—"a nod to shared responsibility"—is more likely to get support from Republicans than Democrats, said Andrew P. Kelly, director of the Center on Higher Education Reform at the American Enterprise Institute.
MDRC, along with Ticas, is also testing the idea of disbursing Pell Grants gradually, rather than in lump-sum payments at the start of each semester. The hope is that the incremental sums will let working students spend more time on academics. So far, the groups have tested whether the idea is feasible but not whether it is effective, said Robert J. Ivry, a senior vice president of MDRC. He said researchers don’t yet know whether the project can be scaled up, or what the effects of doing so would be.
Mr. Kelly predicted “tough sledding” for all of the president’s performance-based proposals, noting that even his base is ambivalent about the ideas.
“I’m not sure who his constituency is,” he said. Even if student and consumer groups get on board, they’re outmatched by the college lobby “when it comes to money and influence.”
Ultimately, the most that may come from President Obama’s bold agenda to curb college costs is increased transparency (for good or bad), and an increased enrollment in income-based repayment. In the end, the president can’t remake higher education on his own. He can only shine a light on its problems, and exhort states and colleges to step up and do more.
Beckie Supiano contributed to this article.
