The Rule of Three

The past four years have been busy ones for the Department of Education as it’s broadened its reach into higher education. But with all that activity, what have we learned, where are the gaps, and what should the administration’s agenda be for its second term?  No doubt, the administration has and will receive many suggestions (most uninvited), so I will keep it simple and focus on three areas—my “Rule of Three.”

Take a Deep Breath, Step Back, and Do No Harm.  The U.S. Department of Education has had a very busy last four years.  First came the long sought and successful elimination of the private federal student loan program. Next came gainful employment, about which much has already been written. Then came a spate of additional regulations on colleges and universities, new budget proposals to promote college completion and innovation, and tweaks to the student loan program to allow borrowers to tie repayment more closely to their income. I probably missed a few others—as I say, it was a busy few years.

And yet, the most promising and disruptive force unleashed in higher education in the last four years really did not involve the federal government at all. The rapid growth of more online options for students (MOOCs and their various cousins) and the sudden move of traditional colleges to embrace online education—in order to lower costs, respond to public demand, and compete for more students—did not need a federal innovation fund or any regulatory changes blessed by the department. All it required were smart entrepreneurs and a daring college president or two to take the plunge. Now the rush is on. We will see where it leads, but this innovation certainly needs minimal, if any involvement, from the feds. Fear not; that does not mean the department should sit on its hands. There are two areas it should turn its attention next.

Data (Not More of It, Just Better). The Department of Education already collects reams of data on colleges and universities, a lot of which is pretty uninteresting and not relevant to improving quality and answering questions vital to the sector’s improvement. But the department could have already begun to improve its IPEDS system to ensure that students who transfer among multiple schools and who attend part-time are reflected in graduation rates. I am certainly not the first to point this out.  Complete College America, the National Governors Association, and a recent report from the private National Student Clearinghouse all identify these flaws and yet, still no improved system from the department. Maybe it’s coming; the time is well past. Default rates also require better information from the department. What types of students across colleges are more likely to default?  This is all data the department sits on and yet the public still knows very little. That needs to change.

Experimenting with Delivering Student Aid Differently. This has been a taboo topic for years. The federal Pell grant and student loan programs are all predicated on the noble goal of college access. To suggest we need to reconsider who receives that aid and how much of it is to risk being labeled anti-college access or worse. But federal grant aid had tripled in constant dollars since the end of the Clinton administration and has faced repeated shortfalls in recent years. Worse, outstanding federal loans approach $1 trillion, default rates edge upward, college costs for the most part continue to rise, and yet discussion of meaningful changes to the federal loan programs (not income-based repayment which Jason Delisle has brilliantly dissected and our own Andrew Gillen has debated) is largely taboo as well.

It would take some courage, but the department should run a demonstration program along the lines of the distance demonstration program of the Clinton years to explore how to deliver aid differently. What would it look like? Try putting colleges on the hook more for loan repayment, incent students to complete degrees, tie grant eligibility more closely to academic performance, and measure the results.

Admittedly, the Rule of Three is not glamorous. Being cautious about introducing new regulations and focusing on data improvements does not set the heart aflutter, and proposing even a pilot to explore changes to federal grants and loans would invite unwelcome attention from nervous and angry members of Congress and the interest groups who support these programs.  But the Rule of Three is exactly the direction in which the department should head.

*The views expressed are mine and not necessarily those of my employer, Laureate Education.

Photo Credit: Mocafe