Obama plan needs reality check

President Obama’s plan to link financial aid to college “value” could use a reality check, write Sandy Baum, a senior fellow at the Urban Institute, and Michael McPherson, president of the Spencer Foundation, in a Chronicle of Higher Education commentary.

If his plan goes into effect — which isn’t likely, they believe — “student aid would become much more complicated” and less predictable, which is a barrier to lower-income students.

While the federal government provides about $136 billion in grants and loans to undergraduate students, “state governments are primarily responsible for establishing, supporting, and managing colleges and universities,” Baum and McPherson write. Federal dollars go primarily to students.

Providing simple and meaningful information to students is a good idea. But the reality is that it’s not easy to measure postsecondary outcomes. What students learn is not on the list, probably because of the measurement challenges. But surely it is at or near the top of the list of what we should care about. We want people to get good jobs when they finish school, but do we really want to suggest that maximizing earnings should be the primary goal? Should we value colleges that educate investment bankers more than we value colleges that educate teachers and social workers? Did the president waste his expensive Ivy League education when he went to work as a community organizer instead of heading to Wall Street?

Open-access colleges that enroll many low-income students won’t have the same graduation rates or debt levels as elite colleges with affluent students, they point out. Comparing “similar” institutions isn’t easy.

Furthermore, “the penalty for a college that charges its students too much is to take away some of those students’ Pell Grant dollars, making the unfortunate students who enroll there still worse off,” Baum and McPherson write.

 Perhaps the idea behind the proposal is that students will vote with their feet. They will avoid colleges that charge too much or don’t have high enough graduation rates. In reality, students don’t have that much flexibility. If a low-income student lives in a state with a poorly run public system, she’s stuck, unable to afford out-of-state tuition or private alternatives. Cutting her Pell Grant just doesn’t help.

The president also wants to expand income-based repayment of student loans, which Baum and McPherson support, if loopholes are closed.

Federal subsidies for “cost-cutting innovation,” is fine in theory, they write, but we don’t know if MOOCs will “help students—particularly at-risk students—learn more while paying less.” It’s also not clear whether “competency-based degrees . . .  will increase meaningful educational opportunities or just let us count more people as having college degrees.”

Four key ideas in President Obama’s proposal have been championed by major foundations and policy analysts, including the Gates Foundation, the Lumina Foundation and the New America Foundation, notes the Chronicle.


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Robin Short

We agree with Baum and McPherson that students deserve full disclosure of outcomes, like graduation and placement, so that they can make informed choices. This is true for all students, not just those attending private sector colleges and universities We disagree that students need self-anointed wiser heads in Washington to help them make such choices.

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