{"id":7147,"date":"2023-07-29T08:12:57","date_gmt":"2023-07-29T08:12:57","guid":{"rendered":"https:\/\/mysourcefunding.com\/leadership\/lowering-costs-increasing-value-for-students\/"},"modified":"2023-07-29T08:12:58","modified_gmt":"2023-07-29T08:12:58","slug":"lowering-costs-increasing-value-for-students","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=7147","title":{"rendered":"Lowering Costs, Increasing Value For Students"},"content":{"rendered":"
\n

In an effort to move policy forward that encourages more value for students, colleges and universities, and taxpayers, the House Subcommittee on Higher Education and Workforce Investment held a hearing July 27 at which I testified along with Stig Leschly of the Postsecondary Commission, Andrew Gillen of the Texas Public Policy Foundation, and Stephanie Cellini of George Washington University. The following is an excerpt of the written testimony I submitted.<\/em><\/p>\n

In our current system of higher education, we pay for what we get. Because the government underwrites significant portions of the higher education system, it means that students and families are not the only \u201ccustomers\u201d of colleges and universities. Taxpayers are as well.<\/p>\n

There\u2019s a saying in efficient markets for goods and services. The customer is always right. What they demand is ultimately met. If Apple doesn\u2019t offer an iPhone that delivers value, customers look elsewhere, and Apple has a choice: improve or wither.<\/p>\n

In higher education, what the government\u2014and therefore the taxpayer\u2014is paying for is enrollment of students. Not employment. Not learning. Not life outcomes.<\/p>\n

Now combine that with four realities:<\/p>\n

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1) higher education is an experience good\u2014it\u2019s hard to understand its value or utility until after it\u2019s been used;<\/p>\n

2) the price of colleges and universities to individual students is opaque, as the actual price is often not revealed until after admission. What\u2019s more, the price charged generally changes from year to year;<\/p>\n

3) the money from the federal government often has the feeling of being free to the student\u2014the repayment terms for loans, for example, feel far off in what students assume will be a brighter future\u2014and schools often use loans to imply that the price of the school is lower than it actually is; and<\/p>\n

4) according to the data we collected for our book Choosing College<\/em>, students attend college for a variety of nuanced reasons, many of which don\u2019t pertain directly to economic return.<\/p>\n

The result of all this is, simply put, that there are far too few incentives in place for institutions to focus on student outcomes in terms of financial returns, employment, and learning. From the perspective of the taxpayer customer, that lack of focus on ultimate economic value to the student should be unacceptable.<\/p>\n

The result is that higher education has long been on an unsustainable cost trajectory. Since 1970, spending by public colleges and universities rose from nearly $104 billion in today\u2019s dollars to $420 billion by 2020. Altogether, post-secondary institutions now spend more than $670 billion per year\u2014and for what? Completion rates remain stagnant with nearly 40% of students failing to graduate from 4-year institutions within 6 years; significant outcomes gaps persist; and nearly 1\/3 of all institutions leave their students with zero economic return after accounting for the cost of attendance, according to the Postsecondary Value Commission.<\/p>\n

The federal government\u2019s answer to this quandary since 1965 has been accreditors\u2014agencies that now play the role of gatekeeper to federal financial aid. But accreditors were not built to play a quality assurance role. They were designed originally as peer-review organizations to determine what is a college and to help institutions improve. They may do that well, but they aren\u2019t good at focusing on student outcomes\u2014nor does federal policy incentivize them to do so, as only one of the 10 standards that dictates what accreditors monitor pertains to outcomes. According to the report from the Postsecondary Commission titled \u201cOversight of Academic Quality and Student Outcomes by Accreditors of US Higher Education,\u201d \u201clow graduation rates, high loan default rates, and low median student earnings did not increase the likelihood that an accreditor would take disciplinary action towards a college.\u201d What\u2019s more, only 11 percent of the 5,195 colleges in the report\u2019s sample experienced one or more disciplinary actions related to student outcomes or academic program quality.<\/p>\n

Because accreditation is an all-or-nothing game, once you have access to it, you get access to federal dollars. And once you have access to federal dollars, you can enroll students and make them feel like the education is subsidized and significantly less expensive than it ultimately is. Indeed, the instinct to create regulations focused on inputs\u2014how a college or university operates through mechanisms like regulating a school\u2019s contracts with third-party entities\u2014instead of its outcomes, only exacerbates this problem.<\/p>\n

The regulation of inputs \u2014 how a college does its work \u2014 only locks institutions into set ways of doing things. It inhibits innovation. It encourages a focus on compliance, not value. And colleges pass the cost of compliance on to students in the form of higher tuition. That\u2019s a downward spiral that, as can be seen plainly in the results of higher costs and poor outcomes, has not worked.<\/p>\n

Policy should instead focus on student outcomes and empower\u2014yes, free up\u2014schools to figure out the best ways to deliver value for students and taxpayers.<\/p>\n

What would a better market look like? For starters, up-front price transparency so students knew what they would pay on the front-end and not have any surprises.<\/p>\n

What would better incentives look like? Congress could pass policy to require that colleges share in the risk when student borrowers don\u2019t repay what they take out in loans.<\/p>\n

That will result in schools and programs like Western Governors University, BYU Idaho, Georgia Tech\u2019s online master\u2019s of computer science, the Quantic School of Business and Technology, and the University of Illinois\u2019 iMBA program that are actually innovative\u2014meaning lower costs and better economic returns to the student.<\/p>\n

To be clear: The taxpayer customers of higher education should not tolerate bad college programs\u2014be they online or brick-and-mortar\u2014that offer miserable returns on investment for students.<\/p>\n

This should be in the interests of traditional colleges and universities. At a time where their enrollments and reputations are both declining, they should want to be freed from regulatory burden that doesn\u2019t support students and reinvigorate themselves by not just offering cheap marketing talk about their value for students, but by aligning their bottom-line interests with those of students. By way of example, witness how traditional liberal-arts colleges like DePauw University in Ohio and Colby College in Maine have created what amount to employment guarantees.<\/p>\n

The road ahead can be bright for students, schools, and American society with a focus on outcomes and value, not inputs and empty promises.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In an effort to move policy forward that encourages more value for students, colleges and universities, and taxpayers, the House Subcommittee on Higher Education and Workforce Investment held a hearing July 27 at which I testified along with Stig Leschly of the Postsecondary Commission, Andrew Gillen of the Texas Public Policy Foundation, and Stephanie Cellini […]<\/p>\n","protected":false},"author":1,"featured_media":7148,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[76],"tags":[],"class_list":{"0":"post-7147","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-leadership"},"yoast_head":"\nLowering Costs, Increasing Value For Students | Brandiary<\/title>\n<meta name=\"description\" content=\"In an effort to move policy forward that encourages more value for students, colleges and universities, and taxpayers, the House 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