College 101: A Call for New Colleges (Part 5 of 5)

An established set of US colleges, largely fixed in number, has dominated our higher education sector for the last 50 years.

Dense law and a powerful college accreditation system protect these established colleges from new entrants, back them with large public subsidies, and leave them free to mop up student enrollment and to raise prices relentlessly.  To date, the college establishment has resisted or avoided almost all forms of hard-nosed accountability, including accountability for the employment and salary outcomes of their graduates.

What will it take for this college sector to improve in a meaningful and lasting way?

What new higher education policy will create a US college sector that is far less expensive to families and our governments and far more successful at graduating students with job-ready skills and knowledge?

The answer, in my view, is an immediate, committed, and intelligently planned move by Congress and the US Department of Education (USDOE) to create a pathway for new colleges – true greenfield startups – to enter higher education.

With new entry into the college sector – and only with new entry – will come the new designs, drastic cost reductions, and outcome leaps that we need.


OTHER POSTS IN THIS SERIES


A. The Limits of Policy Reform of the Establishment

Before I turn to my plea for new entry into higher education, I should recognize that it surely makes good sense to regulate anew and again the college establishment.  It is after all the establishment.  As I type this, the establishment – that unchanging set of 3,200 colleges about which I have been writing here – is educating some 20 million American college students.  It needs incremental regulatory attention, of course.

The project of designing the next best wave of college oversight plays out perennially in Washington, D.C.   Higher education policy, in contrast to K-12 policy, is heavily centralized in Washington, D.C. since so much of public funding for college, unlike public funding for K-12 schools, originates in Washington.

In my opinion, recent history in Washington, D.C. is a story, on the one hand, of good efforts and clear thinking at higher education policy reform and, on the other hand, of the drag and incrementalism that invariably arise in trying to regulate an entrenched status quo.

A few observations on this point:

  • Slow Progress on Accountability in the Establishment.  The US Department of Education, in the Obama era and in prior administrations as well, showed genuine interest in requiring colleges to collect and publish quality outcome data, particularly on the economic and employment consequences of a degree.

For obvious reasons, this policy agenda makes sense and needs to be pursued.  If implemented fully, it would sharpen consumer choice, augment competition among colleges, and create a data backdrop against which the government could revoke or curtail funding for underperforming colleges.

Unfortunately, as far as I can tell, the project – while clear-headed and implemented diligently – has struggled to break through in practice.  I have yet to meet a college-goer who can shop among colleges with reliable, complete data on their jobs outcomes.  And I know of few colleges (other than the for-profit colleges that were rightly and heavily scrutinized in recent years) that have come under meaningful pressure for lack of outcomes.

  • Modest Accreditation Reform in the Establishment.  Relatedly, several past administrations have sought to pressure accreditors – particularly the six large regional accreditors that review most of our colleges and powerfully control the flow of public aid into colleges – to evaluate colleges based on outcomes and, ideally, to approve new college models more speedily.

(Note: college accreditors are private membership organizations comprised of, paid for, and governed by the very colleges they evaluate.  They are generally beyond the direct regulatory reach of the US Department of Education, even though Congress has chosen legislatively to limit students’ use of federal grants and subsidized loans to accredited institutions.)

The Obama administration’s critical interest in accreditors was backed with encouraging candor.  At one point, US Secretary of Education, Arne Duncan, dubbed accreditors “watchdogs that don’t bark.”  That summation of things seems fair.  The the six large regional college accreditors in the US, in monitoring 3000+ colleges between 2000 and 2015, revoked institutional accreditation only 26 times.¹

In the end though, efforts stretching back over multiple administrations have made only small progress, as far as I can tell, towards redirecting the hidden world of accreditation.  It remains in place and largely unchanged.

  • Loud Calls for Increased Aid to the Establishment.  Over the last few years, even as the college establishment has carried on mainly untouched by hard-nosed accountability or accreditation reform, calls for more public aid to colleges have intensified among voters and elected politicians.

College is so expensive now that voters – up and down the income ladder and across the political spectrum – feel panic and demand relief.  Recall, about two-thirds of US households can no longer afford college without the Pell Grant, a federally subsidized loan, or some other form of public college assistance.

Proposals for increased public aid for college range widely in their specifics. Most frequently heard of late are proposals for free or price-controlled public college.  Also popular these days are demands for increases to the Pell Grant, debt forgiveness programs, and other forms of student-side relief.

Increasing aid to higher education would generate all manner of effects in higher education and in society.  I will not cover them in any detail here.  I will just make one cautionary point: more public funding for college will not, in itself, drive institutional change on college campuses.  It does not correlate with cost containment, innovation, accountability, or quality improvement by colleges.

In fact, if history is any lesson, the opposite is likely.  Our governments have funded colleges lavishly for 50 years and – in the absence of new entry and accountability – the college establishment has responded with higher prices, expansion, and yawning results.

In all, Washington, D.C. of course needs to carry on regulating (again) the college establishment.  It needs to reach for another round of regulations aimed at accountability, governance, and funding reform inside the status quo.

That this incremental regulatory project is worthwhile does not make it adequate, though.  It is likely, in my view, to yield the same slow progress over the next 10 years as it has over the past 15 years.  I cannot imagine a regulatory program clever, powerful, and persistent enough to trip our 3,200 existing colleges, en masse, into meaningful and lasting innovation, cost containment, and quality improvement.

We need more than just another wave of regulation aimed at existing colleges. We also need new colleges.

B.  New Entry: The Centerpiece of Reform

Higher education in the US has been voucher-ized.  Nobody set out to voucherize it, as far as I know.  But that is in fact what has happened.

College students, as we stand now, can shop among 3,200 private and public colleges and make autonomous purchase decisions with their publicly issued loans and grants. College students can chose.

What college students lack – and what public policy should seek to encourage – are better choices, from a wider, more entrepreneurial, and more competitive set of colleges.

Public policy and its downstream accreditors should no longer constrain college students’ use of their publicly funded loans and grants to merely the accredited college establishment, free from new entry and pressure to innovate.

We should allow for startup nonprofits to enter the college sector and, with a blank slate, to pursue innovative designs and lower costs.

One way to enable entry into the college sector is for Congress and the US Department of Education (USDOE) to stand up a new national accreditor that would oversee greenfield college startups. This new accreditor would specialize in reviewing, approving, and monitoring high-quality college startups that seek break-though innovation, cost reductions, and results.

As designed now, the higher education sector makes new college formation almost impossible. To become a fully functioning college – one that can grant degrees and accept students with federal financial aid – a would-be college startup, first of all, needs to convince a state board of higher education to approve it under state law.

A college startup then needs, in addition, to seek and win accreditation from an accreditation agency recognized by the USDOE. This latter requirement, earning accreditation, creates an almost insurmountable barrier to entry. Existing accreditors are not designed or inclined to approve college startups. New colleges are almost never formed, as a result.

Congress and the US Department of Education can remedy this flaw in accreditation. Between them, they have full statutory and regulatory authority over accreditors. If so moved, Congress and the USDOE can create the accreditor for which I am arguing here, one that would focus on evaluating, approving, and overseeing college startups.

In setting up this new accreditor, Congress and the USDOE should require it to hold college startups accountable mercilessly, clearly, and intelligently for results and cost reductions. The new accreditor should be as demanding of college startups as existing accreditors are forgiving of the establishment colleges.

The new colleges that I envision would be founded, in many cases, by educators and social entrepreneurs who currently work in education and workforce development nonprofits. These practitioners have acquired from experience all manner of ideas about college design and delivery, but they have never been permitted to do the work directly.

If a crop of new colleges can thrive and grow as I predict they will – if they can mount models that strongly lower costs and that deliver high-quality outcomes – then students will flock to them since demand for better, cheaper colleges options is enormous. And at some point, the best of established colleges will respond. They will have no choice.

You will notice that I conspicuously refrain from specifying the particular designs of these novel colleges. I say merely that they must deliver good degree and jobs outcomes for less money. The accreditor that I propose should do the same. It should actively encourage design experimentation and variety among a new crop of college startups, in return for ruthless accountability for outcomes and costs reductions.

In all, the time has come to invite new actors to take a run at designing and running colleges. In the years ahead, we cannot rely exclusively on incremental improvement and further regulation of the college establishment, as necessary as those tasks are.

We now need a new batch of colleges – built from the ground up, founded by social and education entrepreneurs, and freed from the fixed costs, fixed mindsets, and fixed incentives of existing colleges.

It is time for outsiders to come inside.


 

Footnotes:

(1) Fuller, Andrea and Douglas Belkin. The Watchdogs of College Education Rarely Bite.” The Wall Street Journal. <www.wsj.com/articles/the-watchdogs-of-college-education-rarely-bite-1434594602>