by Alex Katsomitros, The Observatory: http://www.obhe.ac.uk/newsletters/borderless_report_october_2013/obamas_bargain_affording_higher_education
Policy reforms usually come with big words and bigger expectations.
Barack Obama’s higher education reform plan, announced
in August, is no exception.
Τhe plan aims to tackle in one stroke the
two main problems facing the sector in the US: soaring student debt and
high dropout rates.
Technology is seen as a catalyst for change, but the
plan fails to give specific directions for its use.
Value for money
The plan could be called ‘Affordability and how to learn to love it’. Its cornerstone is a new university rating system, College Scorecard,
that will score institutions on affordability, tuition changes, access
and graduation outcomes, including loan repayment.
If the plan is
implemented, federal allocations will be based on these rankings from
2018. The administration's goal is to push universities to reduce
tuition fees and incentivise students to opt for value for money.
This is an interesting twist to rankings. The three big international
ones focus on citation impact, reputation and research output; cost is
ignored and employability is taken into account only in the QS ranking,
but is of minor weighting.
As pointed out by TechCrunch's Gregory Ferenstein,
‘it is the first time that colleges will be judged on how their
graduates perform in the real world’. This may affect the reputation of
institutions that fail to contain costs and produce employable
Even the Ivy League may come under scrutiny for offering
degrees that are too costly or less relevant to the job market;
according to a ranking
by Forbes and the Center for College Affordability and Productivity
that measures student satisfaction, postgraduate success, student debt
and graduation rates, Pomona College in California can be better value
for money than Berkeley or NYU.
Liberal arts colleges may see the College Scorecard as a threat,
as their graduates earn less in the short term.
might also receive a blow, as they receive most of their revenue from
the federal government through student loans, have high dropout rates and are more expensive than public institutions.
by the National Bureau of Economic Research shows that the for-profits
eligible to receive federal funds charge up to 75% more for tuition than
those that are not.
The plan's main goal is to reduce student debt - the time bomb at the heart of the system.
According to a study
by the Federal Reserve Bank of New York City published last March,
student debt is approaching $1trn, having tripled from 2004 to 2012,
while almost one-fifth of borrowers are more than 90 days delinquent.
The White House announcement
acknowledges the issue and notes that 'the average tuition at a public
four-year college has increased by more than 250% over the past three
decades, while incomes for typical families grew by only 16%’.
recognises that state funding has declined, dropout rates have reached
worrying levels (only 58% of full-time students who began college in
2004 earned a four-year degree within 6 years) and loan default rates
To address the problem, the Obama administration will cap loan
repayment at 10% of monthly income for all students.
Not much is said,
however, about decreases in public funding, although this is one of the
main reasons why student debt has soared, as institutions facing cuts
increase fees and recruit more international students to fill the
Technology and MOOCs: Measuring success
Technology is seen as a magic wand to make higher education
affordable. The plan vaguely promotes e-learning as a means of lowering
cost and praises experiments with online provision at Carnegie Mellon
and Arizona State where students graduate earlier, get better grades and
One side-effect of this tech evangelism is the emphasis on 'results'.
The reform aims to reward institutions that 'award credits based on
learning, not on seat-time.'
Examples mentioned in the plan include The University of Southern New Hampshire and Western Governors University, which award low-cost online degrees based on competency tests.
The goal is to make the system more efficient; thus far federal aid
is allocated on the basis of the number of students and their financial
needs, while competency and graduation rates are ignored. This has
exacerbated the problem of dropout rates, which can be up to 75%
at community colleges.
The plan includes penalties for colleges with
high dropout rates and encourages students to graduate on time by
requiring them to complete a percentage of their classes prior to
Increasing emphasis on efficiency in government policy derives from
recent technological advances, such as the increasing importance of algorithms and data in almost every sector of the economy.
A recent O’Reilly report
claims that big data can revolutionise the way healthcare services are
delivered and concludes that more emphasis should be put on 'outcomes
rather than procedures'.
The advent of MOOCs has sparked a similar trend in the education sector.
As suggested by the Observatory's recent horizon scanning report,
the rise of online education may gradually enhance the role of data as a
tool to personalise learning by allowing institutions to 'know
up-to-the-minute how a student is progressing, where they are
struggling, and how to improve’.
Standardised tests will also
increasingly be used, particularly in hard science, to assess student
Technology can lower the cost of provision but it has no answer to
the decrease in public spending, which has pushed up dropout rates and
In the long term, it might create a new 'division between a
personalised elite education available only to the few, and a
standardised mass-produced format that provides a credential with little
opportunity for original thought’, as pointed out to us by Kevin Kinser
It may also affect quality; a weakness of MOOCs is the lack of personal feedback for struggling students. Blended learning perhaps deserves promotion over fully online programmes.
Interests make all the difference
Obama's plan is the first government initiative that endorses and
even institutionalises the 'unbundling' of higher education; it pushes
universities to award credit for 'prior learning' (eg, in high school
and the workplace) and pledges to allow 'federal financial aid to be
used to pay test fees when students seek academic credit for prior
learning, and combining traditional and competency-based courses into a
single program of study.' Many academics will find this contentious.
It could all remain on paper in the absence of political action to
legitimise the use of technology and incentivise universities to use it.
The plan includes, for example, a call for philanthropists,
entrepreneurs and technology leaders to use a 'datapalooza'
released by the government to 'catalyze new private-sector tools,
services, and apps to help students evaluate and select colleges', but
little is said about how this is to happen.
Technology does not have a free hand; political and economic
interests make all the difference. The College Scorecard will require
approval by Congress; in the current climate this of course cannot be
taken for granted.
For-profit providers may also fiercely resist the
release of college and student performance data to the public domain, as
they have done in the past.
Back to reality or back to the future?
The Obama plan is an idiosyncratic mix of realism and futurism. It is
a call to universities to be more realistic in tuition and provision
strategies. A lot of hope is pinned on technology in lowering costs but
the plan does not flesh out how to realise this vision.
There is no
mention of specific measures to legitimise MOOC provision; that is going
to be a hard and politicised process, as demonstrated clearly by the demise of a Bill in California that would have required public universities to award credit for MOOCs.
Traditional American aversion to regulation and the complexity of
their system of government might be a reason for the open-endedness. But
at least the debate over costs is underway.