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Talking Policy During the Shutdown: Obama Education Plan Part II

October 9, 2013, 9:23 am

obama-nd-458x310Some of you may be starved for real policy conversations as we all wait to see if  Rep. Michelle Bachmann is correct that we have entered the Last Days.

Should the Last Days not be imminent, however, people will still need to go to college. Therefore, today we are delighted to post part II of a series on President Obama’s plan for higher education by guest blogger Judith C. Brown. The conversation began here on September 22 2013.

How to Combat Rising College Costs, Make College More Affordable, and Provide Better Information so Prospective Students May Decide What is Best Value for Them: Further Comments on President Obama’s Higher Education Plan

President Obama’s plan for higher education seeks to address very real challenges: the rising costs of providing a higher education, the decreasing ability of prospective students to afford it, and the inadequacy as well as inaccessibility of information that prospective students need to make knowledgeable decisions. The solutions he proposes, as I noted in an earlier post, are a mixed bag of ideas, some good and some bad. So here are some thoughts on other steps that the federal government could take to address the challenges noted in the president’s report while avoiding some of his problematic proposals.

Reducing Costs:

  • Provide increased federal funding for pre-K education: Obviously this is not directly in higher education but as the next bullet point makes clear, a significant portion of college and university budgets is spent on remedial and academic support programs for students who enter college with a high school diploma but without the basic skills and knowledge expected of a high school graduate. Numerous studies over the years have shown that pre-K education helps to narrow the K-12 performance gaps between socio-economically disadvantaged students and those who are better off. Moreover, they show that this is money well-spent because it is less expensive to try to remedy educational gaps before they become wider with each year of schooling.
  • Reconfigure college remedial programs: While the most recent NAEP long-term trend assessment tests of 17-year old students show some improvement in reading and mathematics among Blacks and Hispanics, most of those changes in reading took place prior to 1988 and in math prior to 1990-1992. Moreover the overall trend for all 17-year olds has remained flat with a performance level that leads 45% of undergraduates and 60% of community college students have to take at least one non-credit bearing remedial course in college, costing their institutions well over $1 billion annually. Yet the success of these courses is mixed at best. Many students find them boring and discouraging, resulting in higher drop out rates as they face longer times to degree completion and uncertain success. The president’s plan should use his proposed First in the World Fund to encourage and ascertain the success of experiments like the one recently adopted by Connecticut, limiting the number of semesters of remediation at public institutions and embedding remedial support in credit bearing college-level courses. Such programs might put pressure on high schools and their students to aim for greater college readiness; they might be more successful retaining entering college students who need academic support; they would lower the institutional costs of seeing students through to degree completion; and the would make college more affordable for at-risk students.
  • Use Federal Funds to Encourage the Application of Appropriate Cost-Saving Digital Technologies: Strictly speaking this is an item that is already mentioned in the president’s plan, but I thought I’d mention it anyway because as evident in on of my previous posts, I don’t believe that digital technologies are the cure-all to the high costs of higher education that some people, particularly in the political world, think they are.  At the same time, I don’t think they are always the soul-killing, job-killing, providers of pseudo-education that some people in the educational world think they are. There are interesting experiments going on right now using digital technologies in college courses – some are successful, some are not; some are cost saving, some are not. Given the cost of higher education, it behooves us to explore the educational uses of technology and to determine where, when, and how to apply them. The federal government is a useful source of funds for these experiments as long as both the federal government and institutions of higher education approach them with an open mind as to whether the results warrant acceptance, rejection, or modification based not just on financial criteria but on educational ones as well.
  • Reduce administrative costs through technology.  Having been an administrator at several universities and having seen how new digital systems can reduce costs, and provide better information to faculty, students, and staff, I’m often dismayed to see the persistence at colleges and universities of outdated, expensive, hard-to-use technology that does not give the users the information they need in a cost-effective, user friendly manner. Using federal funds to innovate in this area would reduce administrative costs and free-up funds for educational purposes.
  • Other Cost Reductions: All of us can think of other cost-reducing measures. The colleges and universities attended by most students, however, are public institutions and primarily under the purview of state governments. It is these governments and boards of trustees, usually appointed by state governors, which must create the pressures or incentives to reduce certain costs. Two examples are the spending arms-race for presidential salaries, which should be based on ranges linked partly to the average salaries of full professors rather than to the executives of large corporations; and the arms-race for high profile intercollegiate athletics, which are a net financial drain on nearly all colleges and consume a growing share of operating budgets for what are essentially money-losing athletic entertainment businesses.

Increasing Affordability:

  • Simplify the Free Application for Federal Student Aid (FAFSA): Many Pell Grant eligible students don’t apply because FAFSA, which has been simplified recently, is still too daunting to fill out. Such students don’t have the kinds of financial assets that the form asks about in some of its questions. Further simplification of the form would rarely increase the amount allocated to individual grantees while significantly increasing the number of eligible applicants and reducing the unit cost of processing the forms.
  • Make Pell Grants More Flexible: Pell Grants to help the most economically disadvantaged students were created as a one-size-fits-all model when there were fewer adult students in college. A recent College Board Report has made several suggestions for making the Pell Grants more flexible, creating different paths for students under age 24 and those who are older. It also suggests giving students more funding if they choose to enroll for more than 12 credits per semester or if wish to continue attending during summer terms. This would speed their time to degree and enable them to enter or reenter the labor market sooner, thereby reducing the opportunity cost of going to college.
  • Extend Pay As you Earn Loans:  The President proposed allowing all student borrowers to cap their federal student loan payments at 10% of their monthly income. He also proposed a variety of measures to inform borrowers who have have problems with their federal student debts about the options available to them and to help them enroll in the Pay as You Earn and Income-Based Repayment plans when they file their taxes. The programs to inform borrowers are expensive to administer, unlikely to reach all who need it, and, as we know from recent experience, unlikely to be used even by those who are eligible. Why not make these programs the default option on federal tax forms, calculated automatically based on information entered by the borrower and by the federal government?
  • Change the Bankruptcy Laws: Educational loans are the only ones exempt from discharge through bankruptcy. To those worried about a moral hazard problem, consider that the evidence from other types of debts, even during the worst days of the last recession, does not support such a concern. A bankruptcy declaration is a pretty dramatic move with dire consequences. People do not avail themselves of this option lightly.

Providing Better Information: 

  • Improve the College Score Card: Currently the Score Card displays information for each institution on the average net price (cost of attendance minus grants and scholarships), the graduation rate of first-time undergraduates who did not transfer to another institution, the median amount borrowed from the federal government by students, and the percent defaulting on federal loans within 3 years of entering the repayment. It does not yet provide data on post-graduation employment but hopes to do so in the future. On each of these measures, it also provides information on whether each institutions ranks high, medium, or low compared to others of its type. However, while it’s a start, the Score Card is slow and clumsy, and the information it provides is far from being as useful as it should be for prospective students. Take, for example, “average net price.” Individual students need to know the net price for them because the “average” is the product of vastly different net prices for families with vastly different financial resources. To find out the individual net price a student faces, s/he is better off going to the College Abacus, where by entering a few simple numbers about their financial resources students obtain good estimates of the net prices they would incur at several institutions of their choice. And without having to reenter their financial information, they can change the list of institutions repeatedly for additional comparisons. Until the federal government creates that kind fast, easy to use one-stop website, with robust data, students will make scant use of the Score Card.
  • Gainful Employment and Disclosure: The Education Department is still working on revised regulations governing education programs at eligible institutions (primarily community colleges and for-profits) intended to prepare students for gainful employment in a recognized occupation. Whatever the regulations turn out to be, the federal government should ensure that programs (not just institutions) that don’t meet the department’s standards or the accreditation and licensing standards of their states, disclose those facts in their websites and in advertisements to prospective students. These disclosures should be included in the Scorecard so as to reduce the kinds of abuses reported in Senate hearings on this issue several years ago. Additionally, if institutions fail to disclose the status of their programs, the Education Department and the new US Consumer Protection Bureau should take action against them. Needless to say, as the accreditors of programs and institutions, the states should have acted on this problem years ago, but most failed to do so. The bottom line is: schools and programs that don’t meet the minimum standards of expected performance should not be accredited by the states, should not receive Title IV funds, and should not be allowed to engage in deceptive advertising without incurring sufficiently stiff penalties to deter them from such practices in the future.
  • Making Good (not perfect) Information More Accessible: If Congress approves the creation of a database for individual student records so the federal government could provide more accurate information to the public, there is still the challenge of making the information easily available to students and their families. We know from current experience that simply creating a website doesn’t mean that students and their families will know about it or use it. The Department of Education could take several lessons from the advertising industry to develop a proactive marketing plan aimed at high school and college students, parents, teachers, guidance counselors, principals, and others in the field of education to advertise where prospective students can obtain easily understood information about colleges and where they might get help with the application process.

The above are a few ideas for how to help higher education reduce costs, increase affordability, and convey useful information to prospective students. Undoubtedly readers will come up with additional ideas for solving these challenges. The goal is to urge President Obama and Secretary of Education Duncan to abandon the inherently flawed and contentious parts of their proposal and to request that they adopt instead more straightforward steps, like the ones above, that in combination address some of the major problems of American higher education today.

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