College 101: The Syllabus (Part 1 of 5)

From our charter school here in Boston, we have sent 11 classes of high school graduates to college since we first opened our doors in 2000. We work hard in our high school to find good colleges for our students – colleges where they can earn a quality degree, at an affordable price — and we continue to believe profoundly in college as a pathway to economic safety for our students.

But, in interacting the US college sector over the last decade, we have witnessed firsthand the uneven quality and skyrocketing costs of the US college sector. We now worry about its general state.

To help innovate in higher education, we recently started our own college and jobs program, called Match Beyond. Match Beyond helps young adults across Boston (only a few of whom are alumni from our own school) re-engage in college and find their way to a good job. Match Beyond offers its students access to an online degree that is low-cost, rigorous, and flexible (offered by College for America, an arm of Southern New Hampshire University) and supports them with academic coaches and jobs counselors. You can read more about Match Beyond here, and I will write about it at a later date.

Against this backdrop, I will take a look in this 5-part blog series at the evolution of US colleges over the last five decades. In the last installment of the blog, I will offer a forward-looking suggestion for higher education policy.

The story will go roughly like this:

College 101: Soaring Student Enrollment in a Fixed Set of Accredited Colleges (Part 2 of 5)

College enrollment in the United States has exploded over the last half century, up from about 4 million students in the late 1950s to more than 20 million students today. 65% of US high school graduates now enroll in college.

College enrollment growth has been driven partly by a large increase in the number of high school graduates in the US and partly by large public subsidies for higher education.

That college is increasingly common in American society is generally good news. Going to college is – or at least, should be – a recipe for all kinds of good outcomes for students and society.

But there is a glaring oddity in the college expansion story of the last 50 years.

Namely, for the last several decades, college enrollment growth has been monopolized by a nearly finite set of about 3,200 incumbent colleges.

These 3,200 colleges are a mix of public and private colleges and of 2-year and 4-year colleges. They are approved in state law, have been around for a long time, and have status as accredited institutions — a status that grants them unique access to large public subsidies.

For more than 30 years, this set of colleges — this largely unchanging group of 3,200 accredited colleges — has enrolled over 90% of college students, even as the absolute number of college students has grown six-fold.

College 101: Government Subsidies and Related College Price Inflation (Part 3 of 5)

A second head-scratcher in the story of US higher education over the last 50 years is the price of college.

College is one of the most subsidized goods in our society. Federal and state subsidies to colleges total approximately $200 billion annually. These large subsidies include public aid directly to colleges, as well as public aid to students (in the form of student grants, notably the Pell Grant, and in the form of government-backed college loans).

The main beneficiary of this public money is the college establishment (the existing universe of 3,200 institutions) since it has the sole right (given accreditation rules and related regulations) to collect tuition payments that rely on Pell grants, government subsidized college loans, and other forms of public financial aid.

From their sole position as eventual recipients of public aid for higher education, accredited colleges have raised their prices consistently and substantially for decades. For example, college revenues – fueled by public subsidies and related price increases by incumbent colleges – have grown at 7% per year for the last 25 years.

Caught in this inflationary cycle (i.e. a cycle where the government increases aid and the college establishment raises price) are students and families who increasingly deplete household income and take out large loans to meet the ever-rising price of college. Another vulnerable party in this cycle is our government, which constantly issues college-related debt marked by hard-to-predict long-term default rates.

College 101: Worrisome and Sparse Data on College Outcomes (Part 4 of 5)

A final point of concern in the story of US colleges is accountability.

Good data on college quality is hard to find, and the data sets that are available to us – on college graduation rates, on students’ perceptions of college quality, and on employers’ perceptions of job readiness among graduates – tell a worrisome story.

For example, approximately 50% of college entrants never graduate. Moreover, this general graduation rate deteriorates starkly among students of color, students from low income backgrounds, and students at 2-year colleges. For example, just 28% of students who enroll in 2-year colleges graduate within 3 years.

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

To close, I will offer a suggestion for higher education policy.

Unless higher education policy changes sharply, the college establishment is likely to remain protected (via accreditation, statutes and regulations) from competition and in full command of public aid, prices and enrollment. Also, as things stand now, our elected officials are likely to vote for more public aid for college since students and families of all political stripes are in distress, an investment that, under the current structure of higher education, would probably not lead to better outcomes and would merely support the status quo.

To break from this default, we need strong and fundamental reform.

And it should come, in my view, in the form of a substantial, tightly regulated move by Congress and the US Department of Education to liberalize entry into the college sector.

We need a new class of college organizations to design and deliver college in innovative, specialized, and lower cost ways.

Specifically, Congress and the US Department of Education should permit hundreds – and then thousands – of high-quality non-profits and operating companies that need qualified employees to provide college-level education. These new organizations should be allowed to enter higher education free of the conventional hurdles put up by accreditation agencies and state boards of higher education, and they should be regulated directly by the federal government.

As these new entrants arrive in higher education, students should be allowed to use student-side federal financial aid – notably, their federal student loans and their Pell grants — on their offerings. No longer should we constrain college students’ use of their publicly funded loans and grants to the accredited college establishment.

In exchange for status as institutions of higher education and for access to students with federal financial aid, the new operators should be held accountable mercilessly, clearly, and intelligently by the US Department of Education for high graduation rates and good employment outcomes. The government should approve and re-approve only those new college entrants that produce.  Our government should be as demanding of the new actors as it has been forgiving of the old actors.

Welcome to College 101.

I will send out one part of this 5-part blog series each week or two over the next two months.

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