Romney and Obama Education Advisors On Higher Education

OPINION

Regardless of who is elected president, there will be a significant impact on higher education. The focus will be on supporting academic majors that immediately contribute to the economy—measured by starting salary, supporting students who can complete a degree-program, increasing access only for those who can afford the cost of higher education, and expanding “accountability.” Both presidential candidates promise reducing the cost of education. Both believe immediate implementation of technology—specifically online learning—will achieve learning efficiency.

American Enterprise Institute’s (AEI) Frederick “Rick” Hess invited Romney adviser Martin West, Harvard Graduate School, and Obama adviser Jon Schur, America Achieves, to offer views of the candidates on education. Although the October 16, 2012 meeting had a ‘debate” format, the two participants were respectful of each other and the moderator. All were masters of the issues and relevant knowledge. There were no arguments about facts. [Recordings are not available].

Both agreed Romney and Obama have few differences. Hess had described this:

… there are few stark differences between Mitt Romney and President Obama when it comes to education. Both support more transparency, endorse charter schools, support more intensive teacher evaluation and differentiated pay, and insist that something needs to be done about persistently low-performing schools. However, Romney’s stance differs from Obama on vouchers, treatment of for-profit providers, and appropriate federal role in education.

                            Phi Delta Kappen, 1 October 2012

In the discussion about Obama’s budgets and Romney’s budget plan for higher education, two different perspectives emerged. West criticized the Obama budgets for programs that did not meet expectations. He commented Obama had many programs spending too much money. When Schnur asked how Romney could both support the objectives of these programs and reduce costs, West responded “by funding only those programs and grants that work well.” He implied Romney’s staff could predict which programs would succeed and how well before funding them—that is determine the most efficient and only fund those. The word “industrial” describes Romney’s approach; the word “collaboration” describes the Obama approach. This difference can be expected because of their respective experience as business executive and community organizer.

Both emphasized increasing “accountability” through increased collection, storage and analysis of more data on students and their current and subsequent work. This implies extending the “longitudinal student data” efforts that began several years ago. For several years the U.S. Department of Education has been funding states to create “longitudinal student data” systems. State higher education executives expanded “accountability” through mandate. Now there are federal workforce development grants to extend those longitudinal data systems to include employment data as well. New regulations expand higher education’s data mandate to include workforce data as well.

The Obama administration has used the Department of Education regulatory authority—very broadly interpreted—attempting to force change on higher education. The strategy is regulating financial aid to achieve other objectives. Some examples:

  • “Educational purpose” that limits how a student may use federal financial aid.
  • Definition of “credit hour” as a determinant of course quality, primarily by focusing on inputs to the learning process. With comments that competency could replace “student hours” if the institution could show equal or better results than traditional lectures and laboratories.
  • “Satisfactory progress” to control a student’s path toward a degree and define institutional processes for assisting students who are having difficulty in their program of instruction.
  • “Gainful employment” to focus on those instructional programs that have the highest economic value as measured by salaries.
  • “Consumer information requirements” for detailed public information about college costs, completion rates, and, for some, future employability and income.

Guidance for implementing these regulations is based on the 943 page Federal Student Aid Handbook and the now-obsolete 118 page June 15, 2009 Program Review Guide. Enforcement depends first upon the required annual audit of the federal financial aid program and then Program Reviews by the Department of Education.

These regulations require student academic data, student accounts (at the transaction level), and admissions and financial aid policies and data. Gainful employment now requires the real-time use of Bureau of Labor Statistics workforce data for complex computations for each academic program. These requirements, in turn, increase the cost of administrative IT and workload of financial aid administrators, registrars, and admissions counselors at a time these offices are facing budget reductions. For example, financial counseling, if mandated as suggested in the press, would require 10,400 additional financial aid counselors. Based on NASFAA and BLS data, this would cost the colleges and universities $554 million annually to retain eligibility for federal financial aid

Gainful employment will eliminate federal financial aid in programs that do not pay students enough.

The Higher Education Act  defines a Title IV eligible [for student financial aid] educational program of study as either one offered by a public or non-profit institution leading to a degree, or a program of study offered by any institution that leads to gainful employment in a recognized occupation.

Gainful Employment Operations Manual, U.S. Department of Education, 10 May 2012

One of the goals is reducing the default rate on student loans. Eligibility of academic programs would be based on the earnings of students and their debt based on a Department of Education calculation. This is similar to an underwriting determination for a loan.

The rules are different for proprietary (profit-making) and public and non-profit colleges and universities.

West said Romney would treat all institutions equally regardless of their income tax status. This suggests Romney could extend application of “gainful employment” to all colleges and universities.

Although currently there are limits to the scope of the regulations, Mark Kantrowitz, publisher of FinAid.org commented:

Extending the [gainful employment] rules to all programs at all colleges would require an act of Congress. But Congress is likely to see the gainful employment rules as a ready-made solution the next time constituents complain about above-average tuition inflation at public and non-profit colleges.

Strategies for Complying with Gainful Employment, 28 June 2011

He could also have said gainful employment extended to all academic programs may reduce increasing loan defaults.

It would be difficult for a college or university to continue a program, such as performing arts, for which students would not be eligible for federal financial aid. And  require more complex curriculum management processes to demonstrate compliance.

There is another impact of regulations—uncertainty—that translates into hesitancy to invest in new processes and new information technology systems. Department guidance warns:

This document is not intended to create any substantive or procedural rights enforceable by law. The Guide does not establish any procedures, requirements, or standards for the operation of student financial assistance programs, nor does it bind the U.S. Department of Education to particular procedures, requirements, or standards.

Program Review Guide 2009, U.S. Department of Education

Colleges and universities now have compliance officers and attorneys validate their interpretation. Many establish reserves should their interpretation differ, two to five years later, with an interpretation of an auditor of program reviewer.

Few can disagree with the intent of the regulations—academic program completions, education for a well-paying job, and benefit to society of an educated citizen. But education processes are complex. Simple measures can distort the traditional role of colleges and universities through perverse incentives. Passing every student increases completions. Admitting only fully-prepared and motivated students will improve satisfactory progress. Admitting students only to science, engineering, and accounting and management will meet the test of gainful employment.

But these are actions that colleges and universities are trying to avoid. Reflecting the views of the National Commission on Financing Higher Education (1973), Johann Neem, writing for Inside Higher Ed, commented:

Instead of seeing college as a private investment, we must consider it a public good. If we remember the generation that was educated after World War II, generous public support meant that they could afford — economically — to spend four years studying the subject that most interested or spoke to them, and then they took their education and did millions of things with it that helped us develop a richer society, not just in terms of wealth but in terms of knowledge, art, and citizenship.

Don’t make an economic argument for liberal arts, Inside Higher Education, 23 October 2012

Technology will increase efficiency of both academic and administrative times only when sufficient capital investment is made in instructional technologies and information technologies and new processes have been implemented. The most extensive demand will be the development of course materials—up to $1 million per course (based on commercial training materials and Open University UK’s experience ), and needed replacement of student systems to serve the “new” traditional student. But this will take resources and time.

These issues have not been discussed in the presidential campaigns—there are more important national issues. But “reforming higher education” through regulatory action is unlikely to quickly achieve their broader education goals.

Correction: The cost of 10,400 financial aid administrators was transcribed in error. The amount should be $554 million for compensation. No indirect costs were included; the total cost would be more.

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3 Responses to Romney and Obama Education Advisors On Higher Education

  1. Ken Udas says:

    Jim, first, thank you for this posting and clear articulation of what issues have been part of the dialogue and where there has been no dialogue. I would like to read some of your thoughts about what ultimately happens if either administration pursues national higher education reform through regulation.

    Let’s just say too that the initial outcomes are as you suggest above. Education is cast principally as a private good, good education is of high utility, and utility is measured by direct conversion to starting salary. We can sort of see where this would take us (you pointed to it). Do you think something would trigger a “corrective” agenda? Where would an effective voice for liberal education come from? Would it come at all?

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  3. Phil Hill says:

    I’m with Ken here – “thank you for this posting and clear articulation of what issues have been part of the dialogue and where there has been no dialogue”.