How Republicans Can Improve Higher Education

Published November 7, 2014

Washington Post

Ramesh Ponnuru is a senior editor at National Review, a columnist for Bloomberg View and a visiting fellow at the American Enterprise Institute. Yuval Levin is the editor of National Affairs and a fellow at the Ethics and Public Policy Center.

With two years to go before the next presidential election, Republicans are beginning to contemplate the post-Obama era. For six years, they have offered themselves as a check on the president’s overreach. But now they must do more to show voters that conservatism is not just a brake on liberalism but also a better way to govern.

Republicans would be wise to begin by focusing on practical problems that concern large numbers of voters and could be greatly alleviated by a straightforward application of conservative and libertarian principles. Perhaps the foremost example is higher education, which has never been prominent on the conservative agenda but should become so now.

The basic problems to be addressed are well known. First, the cost of college is skyrocketing. Tuition has tripled over three decades, adjusted for inflation. A year at a private university costs, on average, more than half an American family’s annual income. For many students and parents, this bill requires going deeply into debt.

Second, although a college degree continues to provide an important economic advantage, the earnings of college graduates have been sliding for more than a decade, and many recent graduates have failed to find work in their fields that requires a college diploma. American families are stuck paying more for less because the alternative is even worse.

Third, many who bear these costs don’t even get what they pay for. Students are taking longer to complete bachelor’s degrees, and a great many drop out. According to the National Center for Education Statistics, only 59 percent of freshmen entering full-time degree programs in 2006 had graduated six years later.

Higher costs, lower value, growing debt and a lack of better alternatives add up to a bad deal for students and parents, and they know it. When apoll conducted for National Journal last year asked Americans to rate public policies that might improve their financial security, 38 percent picked making higher education more affordable; lowering health costs came in second at 26 percent.

The Democrats’ solutions tend to focus on making student-loan programs more generous and offering loan forgiveness to those who cannot repay. But these policies would risk inflating tuition further and exacerbating the bad incentives that colleges confront.

Exploding costs are a symptom of a larger problem, and bad public policy has long been at its core. Simply put, our higher education system desperately needs market discipline. The structure of the student loan system gives colleges no reason to keep costs down or to better equip their students to succeed; federal rules regarding accreditation and access to student-aid dollars keep new entrants and approaches (especially those that make use of new technology) out of the system; and the government does not share data that could help parents and students find the best value for their dollars.

To improve incentives in the student loan system, conservative reformers should place limits on currently unlimited PLUS loans for parents and graduate students, and, as the American Enterprise Institute’s Andrew Kelly has argued, require colleges to pay back a percentage of any loans on which their graduates default — giving schools more of a stake in their students’ futures. They should also create the legal space for new student-aid arrangements, including income-share agreements, by which private institutions or individuals fund a student’s education in return for a fixed share of his or her income for some period following graduation.

To ease the entry of new competitors into higher education, conservatives should allow states to experiment with approaches to accreditation that look beyond the standard brick-and-mortar campus and allow credit hours to be pursued more flexibly. Sens. Mike Lee (R-Utah) and Marco Rubio (R-Fla.) have each offered promising approaches to this problem, allowing students (including those with federal loans) to accumulate credits in new and cheaper ways, using competition to put downward pressure on the cost of higher education more generally.

Conservatives should also clear the way for professional certificates, apprenticeships and other paths to gaining skills for well-paid employment that do not require a college degree.

And finally, conservatives should help make the data the federal government possesses about the value of different degrees more available to students and parents. A federal law barring the merging of student loan records with wage and employment information should be repealed, and families should have access at least to graduation and expected-earnings data broken down by degree program. Rubio and Sen. Ron Wyden (D-Ore.) have proposed legislation along these lines.

These are not new ideas. Education reformers have championed many of them for years, and all should be able to win support from Democrats as well as Republicans. But these ideas are a particularly natural fit for Republican reformers interested in enhancing the market orientation of the higher education sector and offering a clear contrast to Democrats more inclined to simply spend more on the problem, increase the federal role and protect powerful incumbents in higher education who are a significant Democratic constituency.

Higher education reform offers a huge opportunity for Republicans. It is an arena in which misguided federal policy causes many families great anxiety and exacts enormous costs — and where conservative principles put into practice could make for great improvements.

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