With tuition on the rise and student loan debt surpassing $1 trillion, President Barack Obama unveiled his plan to make college more affordable in an August 22 speech at SUNY-Buffalo.
The President’s three-part plan emphasizes “pay-for-performance” measures to shape who gets federal funds; promoting “new competition between colleges” to encourage innovation; and assistance to manage student debt.
Higher education advocates say the Obama plan has some potential upsides, such as expanding programs that limit a student’s loan repayments to 10% of discretionary income. But they are concerned that the centerpiece of the plan – a nationwide rankings system for colleges that would determine allocation of financial aid – is deeply flawed.
Ranking System
The point of the ranking system, Obama said, would be to rate colleges “on who’s offering the best value, so students and taxpayers get a bigger bang for their buck.” It would rate colleges in three areas – affordability, graduation rates and earnings of graduates – and would tie some of the $150 billion in annual federal student aid to institutional performance based on these rankings. Students that choose “good” colleges as defined by the White House rating system, would receive increased Pell grants and larger subsidized loans, and “bad” schools would see financial aid money reduced or perhaps eliminated.
“It is time to stop subsidizing schools that are not producing good results, and reward schools that deliver for American students and our future,” the president said in Buffalo.
In its coverage of Obama’s speech, The New York Times noted that evaluating graduates’ earnings marks “a new data point, and one that experts say is especially tricky to make meaningful.”
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A Commodity?
“The president’s plan is a ‘market’-based solution based on the premise that if people understand what they are buying, they will shop around,” said Rudy Fichtenbaum, president of the American Association of University Professors (AAUP) and a professor of economics at Ohio’s Wright State University. “That sounds fine if you believe education is a commodity.” But in reality, he wrote, it is easier to set up a rating system than to make sure it is accurate or useful. “Not everything that can be counted counts, and not everything that counts can be counted,” Fichtenbaum cautioned.
“The fundamental problem with the president’s proposal,” Fichtenbaum continued, “is that it does not get at the root cause of skyrocketing tuition” – the slashing of state funding for public higher education. “A report card based on poorly defined metrics” will not reverse that trend, he said.
Obama’s pay-for-performance scheme was also criticized by the American Federation of Teachers (AFT). “We fear,” wrote the AFT’s Nicole Hochsprung, “that a ratings system will create perverse incentives that will devalue community colleges and non-degree-seeking learning, disincentivize colleges from admitting students with disadvantaged backgrounds, and devalue teaching and learning in favor of what is easy to measure.”
Fichtenbaum warned that rewards and punishments based on graduation rates, without new resources to reverse decades of disinvestment in public universities, “will lead to more testing and dumbing down of the curriculum,” resulting in “a decline in the quality of higher education in the name of increasing graduation rates.”
Obama’s plan comes at a time when State aid for public higher education has plummeted 28% per student since the 2007-2008 fiscal year, after adjusting for inflation, according to the Center for Budget and Policy Priorities (see August 2013 Clarion). During that time, CBPP says annual tuition at four-year annual colleges grew 27%.
Public Funding
“If we were truly interested in controlling or reducing tuition,” Fichtenbaum said, “we would increase public funding of higher education both at the state and federal level by taxing the rich, particularly the top 1% who have…been the recipients of the lion’s share of income growth since the 1970s.”
Obama’s plan also calls on colleges to experiment with novel approaches to reduce the cost of obtaining a degree, such as massive open online courses (MOOCs); competency-based degrees that aim to calculate college credits based on students showing what they know, not on contact hours spent in the classroom; three-year degree programs; or dual-enrollment programs for high school students who want to earn college credits.
Incentive Grants
The president is seeking $1.25 billion in incentive grants to disburse to states and colleges that “innovate” in line with his favored reforms. The AFT panned the initiative as “Race to the Top Goes to College” – referring to the $4 billion competitive grant program launched in Obama’s first term that aimed to coax cash-strapped states toward educational policy changes prescribed by backers of corporate-style “school reforms.” Among the latter is the Bill and Melinda Gates Foundation, which also helped shape Obama’s higher education proposals.
“We want a plan that encourages investment in all states,” the AFT’s Hochsprung explained. “A plan with winners and losers will mean that some students are left with a more expensive college education through no fault of their own.”
The Obama administration can move forward on its own to establish a ratings system. However, most of its other proposals will have to be translated into legislation and approved by Congress, which many experts think will prove difficult.
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