CAPPS - Avocacy and Communication Professional Development

California Association of Private Postsecondary Schools

Police for-profit school abuses, but be fair

08/06/2012

The Hill - August 6, 2012

Higher education costs are rising at roughly two-and-a-half times the rate of inflation without producing dramatically improved outcomes. This is unsustainable, and for America to compete over the next 20 years, this dynamic must be reversed. Costs must come down while we dramatically increase our completion and employment outcomes.

A few statistics paint a stark picture. According to the Bureau of Labor Statistics, while there are roughly 13 million Americans looking for work, over three million jobs have gone unfilled because employers are unable to find workers with the right skill sets. The Georgetown Center on Education and the Workforce estimates that nearly two-thirds of job openings in the next decade will require some postsecondary education. Moreover, according to McKinsey Global Institute, there will be 5.9 million more high school dropouts in 2020 than jobs available for workers with that level of education.

The current law governing higher education in America will expire at the end of 2013. The last time it expired was in 2003 and it wasn’t fully reauthorized until 2008. At Capella Education Company, we believe that more urgency is needed this time around. Higher education is a national imperative, and we don’t have the luxury of waiting to bring about fundamental change.

Capella offers the following policy principles as starting places to begin reform of our higher education system:

It starts with data and accountability. In an era of limited resources, it is important to ensure that we make the correct investments in human capital. This requires completion and progression metrics that recognize the challenges different populations of students face. It also requires loan repayment metrics and income data. There must be greater accountability in all of higher education, including the for-profit sector, but it must be predicated upon actionable data. Making this data transparent will also help students better connect cost to value when making choices.

Use policy levers to manage higher education cost inflation. With the constant tension between the scarcity of public funds and the need for an educated workforce, rational policy must be created to incentivize institutions to control cost inflation. This can be achieved based on an understanding of both an institution’s cost to taxpayers and the full costs of education including public subsidies. From this understanding, incentives and expectations can be created for institutions to control cost inflation.

Higher education is ripe for positive innovation. More of the same won’t get us where we need to be as a country, but there are significant regulatory barriers to innovation. Addressing issues with the current definitions of the credit hour system is important because it can prevent institutions from innovating around the delivery of education. In addition, expanding the use of Department of Education experimental sites will help incentivize the kind of innovation in financial aid that places a downward pressure on costs. The emergent massive open online courses (MOOC) movement is but one data point to support the ripeness of higher education for meaningful innovation. We can innovate to increase affordability and completion while improving quality.

Leverage the private sector for increased capacity and innovation. The for-profit sector has a critical role to play in the future of higher education. It is a source of significant innovation, online development, competency-based learning, and it provides critical scale and access. Companies like Udacity, Coursera, Staighterline and Sophia, which is part of Capella, provide innovative solutions to significantly reduce the cost of a degree.

Legislation aimed at limiting the ability of for-profit institutions to reach students could have the unintended consequence of severely hampering the ability of institutions to increase access, restrain costs, and be a source for solving the big challenges of higher education. These for-profit institutions do not have the same advantage of non-profit colleges with a physical campus and buildings for recruitment; thus, marketing is important to increase access to higher education.

In recent years, major federal higher education policy has been focused on the for-profit sector. As the leader of a for-profit education company, I am frustrated by abuses within the sector and the negative perception they have created. We need a strong policy to address abuses, but we also need a policy environment that encourages accountability and innovation by all schools to reduce costs and improve education outcomes for the majority of our students.