• Reinventing Higher Education: The Promise of Innovation
    Reinventing Higher Education: The Promise of Innovation
    by Ben Wildavsky
  • Accountability in American Higher Education (Education Policy)
    Accountability in American Higher Education (Education Policy)
    Palgrave Macmillan

California's Groundbreaking State Online Education Plan

California is currently home to two of the most important things happening in higher education, one good, one bad. The good thing is the rapid advancement of cheap and free online courses offered by companies like Udacity and Coursera. The bad thing is the catastrophic failure of California lawmakers to provide enough money to support basic access to foundational courses at community colleges. Tomorrow, California Senate President pro Tem Darrell Steinberg is will announce a plan that essentially tries to use the one to fix the other. This groundbreaking initiative has broad implications for the nature, financing, and regulation of higher learning.

As of today nearly half a million students are on waiting lists for basic courses in California’s public higher education system, increasing the cost and duration of college and reducing the number of students who ultimately earn degrees. This is a human tragedy and a policy failure on a massive scale. Under the plan, waitlisted students would be able to take online classes that have been approved by California’s Open Education Resources Council, a faculty-led body that was created by recent Steinberg-sponsored legislation creating free open textbooks. ACE certification would be a point in course's favor. Students would have to take in-person proctored exams to pass the courses. Public colleges and universities in California would be required to accept those courses for credit.  

It seems commonsensical, and it is. But the policy represents a huge departure from standard policy arrangements in two important ways. First, the organizations providing the courses would not have to be accredited colleges and universities. They could be MOOCs, but also low-cost course providers like Straighterline, or perhaps a venture led by textbook companies whose offerings increasingly blur the distinction between textbook and course. This would represent a major breach in the regulatory wall that has long kept credit-granting privileges and public subsidies confined to organizations that have been certified as colleges by other colleges, with all of the cultural and financial structures that designation implies. This idea is very consistent with the policy ideas put forth by President Obama in his State of the Union last month, as well as by Senator Marco Rubio in the SOTU response.

Second, it represents state lawmakers taking long-overdue responsibility for the critical issue of credit transfer. It’s in the best interests of taxpayers and students for credits earned at one public higher education institution in a state to seamlessly transfer to other higher education institutions in the state -- particularly a state like California, which forces huge numbers of students to begin their path toward a bachelor’s degree in a community college. The best interests of individual colleges, by contrast, may be different. Not accepting a transferred course means the student has to take, and pay for, that course again.

None of this should assume away the question of quality control. Not all online courses are good enough, which is why starting with ACE-certified courses--Straighterline offers more than 50 of them--plus faculty review is a good idea. Limiting the program to waitlisted students means nobody is being displaced on the labor side of things in the short term. In the long run, however, this kind of plan represents an undeniable re-ordering of long-established regulatory, financial and institutional arrangements, moving closer to a world where traditional colleges are only a subset of the larger world of higher education. 


President Obama's Bold Plan to Reshape American Higher Education

As a rule, speechwriters put the most dramatic parts of a president’s agenda front and center in televised speeches, leaving the boring policy details to the supplemental notes. Last night, the Obama administration did the opposite: the higher education section of the State of the Union address was much the same as last year’s, focusing intensely on college affordability and putting institutions on notice that the gravy train of public support for rising prices would have to end. But the truly earth-shaking policy initiatives were left for the supplemental policy document released directly after the speech, in which the Obama administration proposed the biggest change to federal higher education policy since at least the Higher Education Amendments of 1972.

Those laws created what would become the Pell Grant program for low-income students, which has grown to a $40 billion pillar of government support for higher learning. The Pell grant is a voucher system--any eligible student can use their grant to pay tuition at any accredited college of their choice.

The key words in that sentence are “accredited” and “college.” There are lots of ways to learn, but Pell grants can only be used to purchase learning from organizations that fit the model of colleges as we know them today. And who decides, legally, what a “college” is? Accreditors, a group of independent non-profit organizations run by...colleges as we know them today. By controlling access to Pell grants, student loans, and other forms of financial aid, existing colleges determine the price, structure, and character of higher learning. This regulatory monopoly has had severe and sadly predictable negative effects on price and innovation in higher learning. To compete on a level financial playing field, you have to teach, spend, and ultimately charge like established institutions.

The Obama administration wants to change all of that:

The President will call on Congress to consider value, affordability, and student outcomes in making determinations about which colleges and universities receive access to federal student aid, either by incorporating measures of value and affordability into the existing accreditation system; or by establishing a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal student aid based on performance and results.

Last year, similar language tying federal aid to “value” was explicitly limited to a group of relatively minor aid programs. The Pell grant and loan programs that make up $140 billion in annual aid were excluded. No such restrictions appear here (although the President did refer to only “certain types” of aid in the speech itself.) But the real kicker is at the end: a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal student aid based on performance and results.

The existing accreditation club has been around since the end of the 19th century. It has had an exclusive franchise on determining federal financial aid eligibility since the middle of the 20th century. Opening a new doorway to the Title IV financial aid system would be an enormous change, particularly when coupled with the phrase “higher education models and colleges.” The clear implication is that the higher education models that would eligible for federal financial aid through the alternate accreditation system wouldn’t have to be colleges at all. They could be any providers of higher education that meet standards of “performance and results.”

Shortly after the speech, American Federation of Teachers president Randi Weingarten tweeted a response to this proposal, warning that it was a “huge opening for profiteers.” This is exactly wrong. The financial aid profiteering that occurred over the last decade happened because the old accreditation system was left in place. Whatever college that one might think plundered the treasury was a college, duly accredited by a non-profit organization that lacked the wisdom or capacity to prevent plundering. Obama is proposing creating new standards of quality and accountability that don’t exist today. It is an anti-plundering plan.

There is a clearly a great deal of innovation happening in higher education right now. Much of it is happening online, although it would be a mistake to assume that all innovation is technological and vice versa. The upward spiral of college costs isn’t going to be arrested by government price controls. Only intense new competition from high-quality, low-cost providers will create the kind of market pressure needed to change the way colleges spend, teach, and price their services. But that competition will never thrive if innovators are forced by incumbents to adopt expensive, centuries-old organizational models in order to have equal access to financial aid.

It will fall to the administration to flesh out the details of this proposal in coming weeks. Here are some of the components I’d like to see:

  • A new set of eligibility criteria for Title IV aid that would provide less money than the current system--say, a maximum of $5,000 per equivalent of 60 credits, which is less than half of what the maximum Pell grant provides today--in exchange for more transparency and quality assurance than accreditors now require. This ensures that only organizations that can provide great educational services to a large number of students for very affordable prices would be eligible. 
  • Approval through the new accreditation system at the course level. Right now, only organizations that provide whole degree programs can receive aid. But what if you want to specialize and provide nothing other than the world’s greatest Linear Algebra class at a super-affordable price? If we assume a student takes 20 courses over two years (60 credits / 3 credits per) that comes to $250 per course or course-equivalent. That’s low enough that this policy would catalyze a market for people who want to pay for higher education services with the official quality assurance imprimatur of the federal government out of their own pocket, even if they don’t qualify for federal aid.

  • Pay for student success, not enrollment. Right now colleges can suck up most or all of a student’s grant aid even if students drop out and don’t learn anything. Under the new system, higher education providers would only get paid if students succeed. This could also be used to finance Prior Learning Assessment of what students already know, which is currently ineligible for federal aid.

  • Mandatory credit transfer. It’s high time that quality control in higher education actually function where it counts: when students assemble, as most do, credits earned from multiple institutions into credentials with value in the labor market. Any credits earned from the new accreditation system should be automatically transferable to any college or higher education provider receiving federal financial aid under the new or the old system.

I’d also advocate for a combination of absolute requirements and human judgment in approving higher education providers through the new system. The mandatory elements would be transparent learning goals, transparent evaluation and assessment processes, and transparent and timely results. In other words, you have to say what you're trying to accomplish, how you evaluate student success, and how many students are actually successful. In addition, applicants should be judged on a combination of broader criteria including:

  • Organizational capacity. If Harvard and MIT form a non-profit to do this, their capacity, academic and financial resources should carry weight. If Carl Wieman wants to get in the Physics 101 business, his status as a Nobel prize winner and researcher on best practices in teaching introductory physics should work in his favor. If Pixar wants to teach computer animation, Wall-E should count in their favor. (Cars 2, less so.)

  • National educational and workforce priorities. We don't have to subsidize everything anyone happens to want to teach or happens to want to learn (another change from the existing system, where this is more or less the case). We can make choices about what's strategic, needed, and important.

  • Rigor: Organizations that are not only transparent about their goals and evaluation processes but are objectively rigorous in their expectations should get preference.

  • Credible external audit and evaluation procedures.

More to come.



The Mystery of Moral Blindness

There are two quotes from the Penn State scandal that I can’t get out of my mind. This:

In a confidential note, [former senior vice president for finance and business Gary C.] Schultz wrote, “Behavior—at best inappropriate @ worst sexual improprieties.” He also noted, “Is this the opening of Pandora’s box?” and “Other children?”


“This approach [of failing to alert authorities] is acceptable to me,”  [Penn State President] Spanier wrote in an e-mail to Mr. Schultz and [Athletic Director] Curley. “The only downside for us is if the message isn’t ‘heard’ and acted upon, and we then become vulnerable for not having reported it.”But that can be assessed down the road,” he continued. “The approach you outline is humane and a reasonable way to proceed.”

Is there some possible context that could put these words in a different light? Because these are the thoughts of moral monsters. Pandora’s box contained all the world’s evils and calamities. Who could see a group of molested children that way? Yes, I know it’s a stock phrase. But it’s actually quite apt–if you believe that the university’s reputation is the only thing that matters, then a group of suddenly-revealed underage rape victims is indeed a pestilence loosed upon the land.

Spanier’s email is even worse. The “only downside” is becoming vulnerable for not reporting it. The only downside? Not the downside of letting a child predator loose to rape again? Again, this sentence is coherent only when spoken by a person who has lost all humanity–the only downside for us. 

It’s abundantly clear that people who have been educated and acculturated in all of society’s norms of moral behavior will nonetheless commit indefensible acts if placed in particular environments. So people who hawk cancer-causing cigarettes or environmental pollutants sleep soundly at night. War does this, and politics does this too. Death, power, money, sex–organizations built around these powerful forces can drain the humanity of the people within them.

But I’ve always assumed that public universities were in a different category. At their worst: aloof, pedantic, elitist in the wrong way. But not this. I am struggling to understand what went so wrong, and I hope that Schultz, Spanier, and others try, as at least a small part of their penance, to explain.  How could they look at those children and be so blind?


Court Strikes Down "Gainful Employment" Repayment Rate Threshold That Was Embarrassingly Low to Begin With

Last year the Obama administration implemented "gainful employment" regulations designed to identify higher education programs, primarily in the for-profit sector, that load students up with debt in exchange for low-value credentials and degrees. The trade association representing for-profits promptly filed a lawsuit, and won a significant court victory yesterday when a federal District Court Judge ruled that the U.S. Department of Education failed to justify one part of the regulations. Because the part in question is intertwined with the regulations as a whole, implementation of "gainful" is now on hold. The U.S. Department of Education will need to appeal the decision and/or craft new regulations. But it's important to keep in mind what the decision did and did not say – and to remember how disassociated this debate can become from common-sense notions of success in higher education.

Significantly, the judge rejected most of the broad attacks on "gainful." The Department does, he said, have the authority to interpret the phrase "gainful employment" and craft regulations accordingly. "Concerned about inadequate programs and unscrupulous institutions," he wrote, "the Department has gone looking for rats in ratholes—as the statute empowers it to do.” So this is not a question of whether the federal government can regulate higher education this way – only how. 

Where the Department fell short, according to the judge, was in justifiying one prong of the three-prong test used to evaluate job-focused higher education programs. Under the rules, programs are evaluated on three measures: a debt-to-earning ratio (that is, how big your loans are compared to how much money you're making), a debt-to-discretionary-earnings ratio, and a loan repayment rate. The first two measures were valid, he said, because the Department had presented research backing up the specific thresholds they chose. The 35 percent repayment rate threshold, by contrast, was essentially chosen as a number that would land on some Goldilocks middle ground between identifying too many and too few programs. This is arbirtrary, according to the judge, and since the three measures work together in determining eligibility for financial aid, the whole regulatory apparatus is suspended.

Before talking about what's next, let's pause for a moment and consider that number. Thirty-five percent?  The for-profit industry's trade group is standing up in front of the world and saying it can't live with a rule that excludes programs from federal financial aid only if two-thirds of students are failing to pay loans back and–emphasis, and–the program also fails both debt-to-income measures, for three out of four years. Thirty-five percent is an embarrassingly low number. The problem with requiring a research basis for a repayment rate threshold is that "embarrassingly low" isn't a concept that can be proven empirically. It relies on the informed, expert judgement of the U.S. Department of Education.

But think of it this way: Does there exist, somewhere in the realm of logic and reason, a cogent argument for a threshold below 35 percent? Could any credible person explain the public policy rationale for allowing programs to access federal financial aid when graduates are twice as likely to be in non-repayment as otherwise? I think not. And that's why the Obama Administration can't use this setback as an excuse for backing down from a worthy fight. Obviously, the decision must be appealed in court. But there are many other things that may or may not happen besides. The Department can move aggressively to fix and improve the regulations, or it can dilly-dally and allow them to die a slow death. Some of the original champions of "gainful" don't work for the administration any more, and it remains to be seen whether their successors are willing to do the right thing and bear the political heat that will inevitably come from standing up on behalf of students.


Grappling With Higher Education's Gordian Knot

Earlier this year I had a chance to spend some time in San Francisco and Silicon Valley, talking to a host of venture capitalists and ed tech startup companies about the recent surge of investment and entrepreneurialism in the education sector. It was fascinating and, coming from the traditionally-minded, government-focused world of Washington, DC, a lot like visiting a foreign country.

So it was fun to see many of the same people again last month, this time closer to home, on the top floor of Microstrategy’s semi-circular glass headquarters in Tyson’s Corner, Virginia. The meeting was co-hosted by Michael Saylor and former Lotus 1-2-3 CEO and current investor/philanthropist Mitch Kapor. One of the featured guests was Aneesh Chopra, the charismatic former Chief Technology Officer for the United States of America and rumored candidate for the Lieutenant Governor of Virginia who was once described by Jon Stewart during aDaily Show broadcast as the “Indian George Clooney.” 

My friend Michael Staton was there, representing the college social networking and student engagement company he founded, Inigral. So were the guys from New Charter University, a recently-launched low-cost online university startup, and Eren Baldi from the online learning platform Udemy, along with a collection of tech people, for-profit college executives, and Obama administration representatives. 

Michael Saylor got the ball rolling by talking about how many of the ideas now percolating in the policy and startup worlds are not entirely new. In 2000, at the height of his wealth, Saylor announced that he was going to donate $100 million to create a free online university. The dot-com bust put the dampers on that for a while, but now Saylor is ready to try again. He explained that back in 2000, eons ago, the idea everyone had was to tape great lecturers and broadcast them over the Internet. Unfortunately, the Internet wasn’t ready--people were still on dial-up connections and streaming technology was underdeveloped. The easy way to make money, Saylor noted, was to go the Mark Cuban route of building a cool-seeming (and long-since gone defunct) streaming audio/video site called, sell it to Yahoo! for $6 billion in Yahoo! stock, sell all of said Yahoo! stock before the bubble burst, and buying the Dallas Mavericks. The hard way is to wait until the technology infrastructure catches up and then found a non-profit organization that distributes free open-source college courses to anyone who wants them, which is what he, Saylor, has done with the eponymous

The subsequent conversation goes for several hours and repeatedly circles around the various legal and regulatory complexities that make it difficult for non-traditional online universities to compete with entrenched competitors. Accreditation, access to financial aid, credit transfer, regulatory compliance, the list goes on.  

At one point, Saylor says something along the lines of, “This all sounds really, really complicated. It’s hard for me to get my head around. I really doubt these problems can actually be solved. This credit transfer stuff is like trying to figure out how to fix the system of inter-library loans when what you should do instead is download the contents of the New York Public Library to every child’s iPad, which would cost about a nickel.” In other words, maybe we need to think about totally different solutions. Saylor is said to be fond of historical analogies and there’s a distinctly Gordian feel to his vision of solving the contemporary higher education knot.  

The one other person in the room who talks this way is Eren Bali, the teen mathematics prodigy who made his way from a rural village in eastern Turkey to Silicon Valley and his own rapidly-growing company. He doesn’t understand why we’re talking about colleges and college degrees, he says. You can find good college courses in thousands of subjects on the Internet, for free. His company is adding more every day. And you can find out what you need to know about someone by looking at their blog, Facebook profile, Twitter feed, and other forms of social media. These things provide way more interesting information than a resume or a college transcript. Everything you need to learn and prove what you’ve learned is online and costs nothing. What else do people really need?

Saylor and Bali are voicing the biggest unanswered question about the future of higher education worldwide. In one scenario, the existing institutions continue to adapt and run things for the forseeable future. Some embrace technology, others don’t, and the former end up consolidating wealth and power. A week earlier, Harvard had announced that it was joining MIT to form edX, another entrant in the coming war for supremacy in owning a dominant and incredibly lucrative online platform on which students and education providers meet. It’s hard to bet against institutions that are so wealthy, entrenched in the power structure, and own such phenomenally valuable brands.

In the other scenario, the whole system collapses under the weight of its expense and lack of an authentic core of plausible evidence that the students paying so much for higher education are actually learning anything. College itself becomes archaic and is replaced by a whole new collection of institutions.  

It all starts to sound like a massive East Coast / West Coast battle between America’s most prestigious research universities and most ambitious entrepreneurs for control over 21st century global higher education, a fight between the two parts of our economy most often cited as America’s key competitive assets in the struggle for continued dominance and prosperity. Who, exactly, the Biggie and Tupac are remains to be seen.