If the American Dream is to be realized, we must provide greater access to college—and make it more affordable.
Perhaps more than any dynamic of American life, access to affordable postsecondary education has embodied the promise of the American dream. But, with total college debt surpassing credit-card debt at the level of $1.3 trillion, and the annual cost to attend a four-year college ranging from $15,000 at public universities to over $60,000 at elite private institutions, finding affordable higher education has become a daunting challenge. The dream may seem beyond reach for some.
At the same time, institutions have struggled with declining enrollments, leading to closures of smaller colleges and cutbacks at larger institutions, such as the University of Missouri which, on May 16, 2017, announced that, due to a projected 7.4 percent decline in enrollment, it will be eliminating hundreds of positions. This is not surprising, since the U.S. Department of Education has reported that the volume of federal student aid applications has declined by 3-5 percent for each of the past 3 years. The primary culprit: fewer high-school graduates as fewer students enter the K-12 system.
A 2014 study reported that, for every 100 18-year olds, there were only 95 4-year olds. Under typical competitive dynamics of a free-enterprise system, declining enrollments—lower demand—should lead to service improvements, price competition and innovation. Higher education, however, is not a typical market. Nevertheless, while tuition still remains high, numerous ideas have been advanced concerning two very important aspects of higher education: how it can be delivered and how the cost can be paid or financed.
The Higher Education Act of 1965 (“HEA”), the law under which federal grants and loans are provided, is long overdue for a thorough review by the Congress. This offers an ideal opportunity for the Congress and the public to take a hard look at new ideas on delivery and financing of higher education and to embrace and promote the best ideas.
Ten years ago, the academic quality and effectiveness of online education was questioned by many, but now it is so widely accepted across all sectors of higher education that in 2015 nearly 30 percent of all students took at least onecourse online. The flexibility represented by online education has led to other innovations, such as massive open online courses, competency-based education (measuring acquisition of defined units of knowledge and skills rather than credits completed), learning badges (industry based certifications of skills and knowledge), ‘stackable’ credentials (units of training from various institutions assembled to comprise a degree or certification) and IT ‘boot camps’ (providing intensive training over a period of several months in areas like coding).
On the cost side, traditional colleges now have an average ‘discount’ rate over 40 percent, meaning the average student pays around 60 percent or less of the ‘sticker price’ for tuition and fees, yet even that discounted rate is a burden for students from low income backgrounds. And federal and state financial assistance programs have struggled to keep pace with rising tuition levels.
Private-sector funding may ease the burden with emerging income-sharing agreements, which provide tuition assistance in exchange for a student’s pledge of a portion of future earnings.
Through the upcoming HEA reauthorization process, coupled with adoption of new or expanded tax incentives, Congress can encourage and reward the best innovations in delivery and financing of higher education.
For example, the recently adopted federal budget bill makes Pell Grant aid available year round, facilitating completion of a bachelors program in less than four years. It might also be beneficial to allow students to obtain federal aid for individual courses (current law restricts aid to students pursuing an entire program), which would allow students to more easily acquire stackable credentials from more than one institution.
Flexibility also could be added in the way that educational providers are qualified for federal aid by expanding beyond private accrediting bodies to state agencies and industry associations for vocational training programs. We owe it to our children and grandchildren, and our nation, to make postsecondary education an affordable and accessible choice for people from all walks of life, so that succeeding generations have a genuine opportunity to realize the American dream.
As one of the “raps’ I deliver at private college conferences puts it:
“We’re training up America, ’cause education is the key,
to living out the plans and dreams God has for you and me .
“We’re training ’cause our nation wins when each of us succeeds,
in our jobs and in our lives, and in our thinking and our deeds.’”