Next Steps in Improving Higher Education Regulation

The need for better regulation of higher education is clear. Critics of command and control decry the wastefulness of box-checking and the many other burdens imposed by prescriptive rules that are too often unrelated to education. But the alternative of a creating an overarching performance-based regulatory rating system has also proven to be infeasible. Reforms are clearly needed, and the best way to do so would be to strengthen the management-based accreditation system. The Obama Administration recently proposed legislative changes that would move in this direction. In addition, to continue the pressure on the accreditation system, the Department of Education has created a new webpage to provide the public with more information about accrediting bodies and the institutions they supervise. Although the Department of Education is barred by legislation from requiring accreditors to use specific educational outcomes to evaluate colleges and universities, the administration has published metrics for each institution (including net tuition price, graduation rate, student loan default rates, post-school earnings) on the department’s webpage that describes their accrediting body. This action seeks to pressure accreditors to focus more on these issues in the absence of direct authority. (The administration also urged Congress to reconsider its ban on agency directed outcomes measures.) The administration has also taken steps to promote recent innovations in higher education, announcing that it will allow a small number of colleges and universities to partner with non-traditional educational institutions to create academic programs that can qualify for federal financial aid. This experimental initiative seeks to increase enrollments in programs such as short term certificate programs, computer “boot camps,” MOOCs (massively open online courses), and other personalized online educational programs that provide training to students unconnected to a degree. This new initiative will enable some students to secure Pell grants and federal student loans to participate in these academic programs by involving accredited institutions to partner with those running the programs. In the past, few of these innovative programs have been able to secure accreditation, and therefore students could not access aid. The partnerships allowed under the initiative would enable students to obtain federal aid. As a condition of participation in the initiative, schools would have to have the innovative programs evaluated by an independent (accreditor-like) third party for their effectiveness, and the partnerships would also have to meet jointly established metrics for affordability, student learning, and post-completion job attainment. The administration’s experimental initiative mirrors recent legislation introduced by Senators Michael Bennett (D-CO) and Marco Rubio (R-FL) that would create a separate procedure for institutions to access federal financial aid. Instead of going through an accreditation process, innovative new institutions that meet certain metrics for student achievement and job placement could participate in federal student aid programs. In essence, both the administration and Senators Bennett and Rubio are proposing an alternate, performance-based path for new models of higher education. Instead of trying to change the whole industry, they focus on new entrants into the field and arguing that we should regulate them differently. Performance-based regulation for these new innovators, which are fewer in number and where there is general agreement on what performance measures should be adopted, seems to be a logical approach. The next steps for improving higher education reform, it seems, will not involve imposing a single regulatory approach on the entire industry. In other words, the solution will not be as simple or easy as getting rid of command and control and replacing it with a uniform performance rating system. Rather, the future of higher education will depend on re-adjusting and strengthening the existing approaches to regulating colleges and universities. A revitalized and strengthened accreditation system is needed, and such a strengthened management-based system could be combined with a lessening in certain unhelpful command and control burdens on institutions of higher learning. And even though the Obama Administration’s experience with its proposed college rating system makes clear that an overall performance-based system is not feasible, recent initiatives and legislative proposals suggest that performance evaluation can play a meaningful role in assessing new, targeted innovations. In the end, just as with other areas of regulation, the federal government needs to look carefully at all the policy tools available for improving access, affordability, and quality in the higher education sector. The path forward requires making smarter decisions about when, where, and how to use the right tools