K-12 Education

College Excellence Director Responds to Obama’s Plan to Control Costs

September 4, 2013  • Josh Wyner

Joshua Wyner is the executive director of the Aspen Institute College Excellence Program, which aims to strengthen practice and develop leadership that substantially improves college student success.

In September, thousands of students are showing up on college campuses across the country with big dreams. But only about half will finish the credential they’re hoping to achieve.  Others will complete their degrees only to find out that they have still not learned many things employers expect them to know — be it expository writing, precise measurement, or customer relations. And most will graduate with debt, adding to a national student debt load that already exceeds $1 trillion.

In late August, President Obama challenged colleges to improve student outcomes and lower costs, so that more students who arrive this fall will ultimately succeed.  To spur reform, the President promised to provide students and families better information with which to choose colleges, and to tie federal higher education funding to measures of quality and cost.  In short, the President’s message was clear: colleges must improve their performance on their own, or policymakers will increasingly use whatever tools are at their disposal to force them to.

Several factors — including the recent recession and global competition — have converged to cause federal and state policymakers to examine, now more than ever before, how big a bang Americans are getting for their higher education buck. They have found that, for the past several decades, graduation rates have remained in the 50th percentile, the amount students study is decreasing, and costs have been rising at a rate that far outstrips inflation.  

Perhaps what’s most troubling is increasing numbers of students and families are questioning the value of a higher education. There is a risk that, by citing the clear need for improvement, policymakers will deepen public skepticism about higher education at a time when a college degree is more strongly correlated to an individual’s economic success than ever before.  

The strengths of the US college and university system remain clear. Our nation has among the highest college participation rates anywhere, delivers college degrees that remain the best ticket to the middle class (and beyond), and attracts millions of international students to the education US colleges and universities provide. The alarm bell Obama sounds does not signal a broken system that should be avoided, but rather one that must significantly improve outcomes to meet the demands of students’ aspirations and our nation’s need for human capital in a global, knowledge-based economy.  

In his speech and in the administration’s policies, Obama has signaled which outcomes he views as mattering most: costs, graduation rates, and employment and earnings after graduation. Indeed, more and more information has been steadily coming out on each in recent years.  

For a few years, colleges receiving federal aid dollars have been required to post on their websites “net cost calculators” that help students and families understand the true cost of college rather than the one-size-fits-all “sticker price,” which many students don’t actually pay. More recently, the Department of Education has made cost information available for comparison on its web-based college affordability center

Graduation rates for all colleges and universities have for several years been posted on the federal government’s College Navigator, an online searchable database. And, when students apply for federal financial aid or loans, they are automatically provided graduation rates for every college they indicate they will apply to.

Employment and earnings results for college graduates have, until now, been reported mostly at the state level, with several publishing earnings outcome data for graduates of different programs at different colleges. If passed, a bill introduced this year by Sens. Ron Wyden (D-Ore.) and Marco Rubio (R-FL) would provide a national data source that would track individual student outcomes through higher education and then into the labor markets. 

Moving to a world in which consumer choice and government funding are based on accurate assessments of cost and quality won’t be easy. Notwithstanding significant recent efforts to publish available information, our nation still lacks centralized data systems with comprehensive information on completion, or costs, or employment/earnings outcomes. Even as information continues to improve, it will remain complicated for governments to thoughtfully assess and compare quality at thousands of colleges, each with dozens (and often hundreds) of unique programs and very different student bodies. And translating that complex web of information to students and families will be challenging, especially through the din of increasing amounts of advertising from mostly for-profit, mostly online colleges.  

But this work must be done. With nothing else to go on, consumers have long chosen colleges based on factors that have nothing to do with quality, such as sticker price tuition or proximity to home. As a result, evidence shows that many students choose colleges with weaker outcomes than they could have afforded and gotten into. 

Policymakers too have long made funding decisions that seemingly run counter to the public interest. During the recent economic recession, for example, 40 of 50 states cut higher education funding, most of them applying formulaic reductions that treat colleges with different costs and different outcomes as though they are the same. But evidence shows that different colleges achieve variable outcomes at dissimilar costs — even when they have similar programs and student bodies. 

Reasonable people can disagree about whether and how assessments of quality should be used by regulators, consumers, or both. But it is hard to argue for maintaining a status quo in which costs are escalating, graduation rates are static, and what students learn does not fully match what they and our economy need after they graduate. Our nation has developed systems to assess quality in other complex contexts — from hospital care, to car safety, to K-12 education — as the essential starting point for improvement. The need to strengthen higher education demands the same.