T costs price way too many young people out of costs pricewaytoomanyyoung peopleoutof State oftheUnionaddress,“Today, skyrocketing Obama hasalsochimedin,remarking inhis2013 delivery fromtheirstateuniversities.President a $10,000bachelor’s degreeandincreased online piece oftheirtenure,pushingformeasuressuchas have madelower-cost highereducationacenter Perry inTexas andScottWalker inWisconsin our nation’s manycolleges.” money instocksratherthanfouryearswithoneof students mightbebetteroffinvestingtheirtuition William Bennettopined,“Inpurefinancialterms, of nationalfigures.Formereducationsecretary deficits forfiscalyear2013. signs ofrecovery—stillreportingsignificantbudget and 2012,withamajorityofstates—despiteslow per studentdroppedbyaquarterbetween2007 sits atastaggering$1.2trillion,andstatefunding outstripping inflation. Total USstudentloandebt more thandoubledinrealdollarssince1980,far cerned citizens.Thisisunderstandable.Tuition has of angstfromjournalists,policymakers,andcon via araftofnewproviders,andtogivepolicymakersideasfornurturingreform. and Affordability just-released volume demand, highereducationreformersmustdevelopaboldvisionforhowtoreducecosts.HarvardEducationPress’s economy andpoliticalrhetoricseekingtomaketheUnitedStatesmosteducatednationinworld.To meetthis threshold. Meanwhile,demandforhighereducationonlycontinuestogrow, promptedbytheneedsofa21st-century real dollarssince1980,growingfarfasterthaninflation,andtotalstudentloandebtfinallycrackedthe$1trillion The costofUShighereducationisattheforefrontnationalconsciousness.Tuition hasmorethandoubledin By DanielLautzenheiser Getting MoreBangforOurCollegeBucks 1150 Seventeenth Street NW, Washington, DC20036 program managerofeducation policy studiesatAEI. Daniel Lautzenheiser([email protected]) is This has led to widespread panic from a number This hasledtowidespreadpanicfromanumber the obvious, and has prompted a great deal the obvious,andhaspromptedagreatdeal o saycollegehasbecomeexpensiveistostate aims to explain why college has become so expensive, to offer solutions at both existing schools and aimstoexplainwhycollegehasbecomesoexpensive,offersolutionsatbothexistingschoolsand Stretching theHigherEducationDollar:HowInnovationCanImproveAccess,Equity, 1 2 Governors like Rick GovernorslikeRick - -
the state house have put the painfully high price the statehousehaveputpainfullyhighprice affordability andstudentdebt.” speech inBuffalo:“We’ve gotacrisisintermsof echoed thesesentimentsinamajorAugust2013 subsidize thesoaringcostofhighereducation.” tainable debt..taxpayerscannotcontinueto a highereducation,orsaddlethemwithunsus Key pointsinthis Such declarations from the White House to Such declarationsfromtheWhiteHouseto • • • the emerging wave of new providers. the emergingwaveofnewproviders. higher educationwilllikelycome from steps tocontaintheircosts,truly low-cost While existinginstitutionscan takesome tion andcredentials. seek torethinkthedeliveryofinforma courses, andcompetency-basededucation online partnerships,massiveopen Nascent reformssuchasuniversity- outdated visionofwhat“college”means. money andbecauseofanincreasingly enables collegestocontinueraise a misalignedincentivestructurethat ingly expensive,primarilybecauseof US highereducationhasgrownincreas 202.862.5800 No. 6•September 2013 Outlook 4 : www.aei.org
- - 3 - He He
Education Outlook - 2 - of American higher education squarely into the national II.”8 Regardless of any technological changes, part two of consciousness. As Andrew P. Kelly and Kevin Carey Henry IV always involves the same number of actors. The write in the introduction to their new book Stretching actors cannot speed up the performance and the acting the Higher Education Dollar: How Innovation Can Improve cannot be outsourced to China; moreover, cutting one of Access, Equity, and Affordability (Harvard Education the cast members or replacing him or her with an inexpe- Press, September 2013), “After three decades of pub- rienced substitute will diminish the ultimate product. lished tuition rates steadily increasing faster than infla- As labor costs decrease in most industries because tion, the brutal arithmetic of college pricing has become of technological advances, they will increase in more impossible to ignore.”5 stagnant industries such as performing arts and higher Stretching the Higher Education Dollar attempts to education. Bowen and Baumol termed this phenomenon explain why higher education has become so costly, to the “cost disease.” The current conception of higher offer possible solutions at existing institutions and by education involves a set number of students sitting in a leveraging new models, and to discuss how state and physical building and learning from a highly trained fac- federal policy would need to change to nurture reform. ulty member. So long as this idea of what college is holds, Ultimately, despite the rhetoric from President Obama the cost disease helps explain why costs continue to rise. and other policymakers, it seems likely that truly low-cost higher education will come not from existing institutions Total US student loan debt sits at a staggering but from an emerging wave of new reforms that rethink the delivery of information and credentials. $1.2 trillion, and state funding per student dropped by a quarter between 2007 and 2012. Why is College So Expensive?
Perhaps the biggest confusion in the debates surrounding Bowen’s Rule and Misaligned Incentives. If the cost the cost of higher education, and one that Stretching the disease is a structural theory that colleges are relatively Higher Education Dollar takes great pains to clarify, is the powerless to combat—costs are always going to rise by conflation of “cost”—what it actually costs in terms of the very nature of the services colleges provide—then the tuition, fees, and subsidies to run an institution—and late economist and university president Howard Bowen “price,” or the amount the student pays. Anya Kamenetz, had a more cynical take: college costs rise because colleges a technology journalist for Fast Company magazine, clari- raise all the money they can get, spend all the money they fies: “The entire framing of the current public debate over raise, and have little outside pressure to stop. This occurs the cost of education and the growth of student loan debt in higher education largely because of information asym- is misconstrued . . . we focus more on affordability—the metries. Prospective students lack the necessary infor- price to the student—than on transforming the under- mation to make informed, cost-effective, and strategic lying cost drivers in higher education.”6 What are those decisions on which programs and schools to attend. Many underlying cost drivers? Economist Robert E. Martin students also associate higher cost with higher quality, identifies two primary culprits.7 so institutions can often raise their tuitions and students will still scramble to apply. Martin estimates that while The Cost Disease. In most sectors, technological both the cost disease and Bowen’s rule contribute to rising advances lead to increased productivity and thus lower higher education costs, Bowen’s rule is the greater culprit. prices. But technology has yet to do the same in higher education. Economists William Bowen and William What Can Today’s Schools Do About It? Baumol speculated that certain labor-intensive industries (such as performing arts, higher education, and health The factors driving up costs in higher education do not care) would, because of the service they provide, often lend themselves to easy solutions. This is especially true at be relatively immune to productivity improvements and existing institutions. Douglas N. Harris, a Tulane University thus see rising labor costs as they struggle to compete economist, argues in Stretching the Higher Education Dollar for employees. To borrow Bowen and Baumol’s analogy, that school leaders have more control over productivity this is because “it is fairly difficult to reduce the number than they think they do, but often suffer from a lack of infor- of actors necessary for a performance of Henry IV, Part mation about which politics or programs are cost-effective. - 3 -
He presents a simple metric that universities can use to eval- agencies act as regional cartels designed to keep out new uate the cost-effectiveness of common programs and policies providers of higher education. such as student-faculty ratios, the number of full-time versus adjunct faculty, and financial aid.9 A New Vision of Higher Education Ari Blum and Dave Jarrat of InsideTrack make a case for strategic use of student services, arguing that targeted This is not to say that universities should not endeavor to be investments in academic advising and coaching, financial- more cost-effective. They should. It is only to suggest that aid counseling, and mentoring can increase graduation rates dramatically lower-cost higher education will likely come and lower time to degree.10 Jeff Selingo of the Chronicle of from outside the current system. And understanding what Higher Education profiles some of the findings by leading is going on outside the system starts with a theory of what management consulting firms such as Bain & Company exactly higher education is. In the words of entrepreneur when they examined the operations of top public institu- Michael Staton, college is “a packaged bundle of content, tions such as the University of North Carolina (UNC) and services, experiences, and signals that results in an education the University of California–Berkeley. Bain & Company with both inherent and transferable value to the learner.”14 found stark examples of unnecessarily complex organiza- Staton is the founder of Inigral, a company that uses social tional structures and extreme fragmentation. At UNC, for media to boost college retention, and a partner at education example, there were 380 unique departments and almost venture-capital firm Learn Capital. It is his (and others’) 200 supervisors who managed a single employee, while proposition that higher education can be “unbundled” into Bain’s advice to consolidate seven different e-mail platforms component parts, and that some of these parts can be easily into a single one saved the school $1 million.11 replaced by online or other low-cost providers. The harsh reality is that though each of these In Staton’s framework, the various pieces of “college” approaches has some potential, they typically add up include delivering content, providing a valid credential of to tinkering at the margins. While Harris advocates a student’s knowledge or skills, fostering a ready-made net- for university leaders to use data to better understand work of relationships, and providing a personal coming- how to effectively cut costs, he acknowledges that “No of-age transformation. For Staton, the earlier parts of single strategy stands out as particularly cost-effective.”12 the stream (content and credentialing) are more easily Bringing in consultants or revamping student services also replaced by alternative providers than are the latter parts involves upfront costs, which might be a tough sell for a (the network of relationships and coming-of-age expe- university leader. And most academic departments, under rience). This makes intuitive sense: it is easier to share the pretext of retaining academic freedom, are notoriously information online than it is to create a vibrant social successful at resisting administrative intrusion into their experience. But, crucially, to the extent Staton’s frame- affairs, making their departments off limits for suggested work is true, it further suggests that our focus on radically cuts. This is unfortunate, since academics constitutes the lowering the cost of a full degree at an existing school dominant share of spending at most universities. Says is misguided, and we would be better served to reorient Bain & Company partner Jeff Denneen, “We’re saving toward new modes of delivering courses, awarding credit, [institutions] 10 to 15 percent. That’s real money, but and providing labor-market signals to stretch the higher it still pales in comparison to what’s left on the table in education dollar. terms of academics.”13 Most importantly, current US public policy is poorly Unbundling Coursework with a Vengeance equipped to drive lower-cost higher education at existing institutions. The regulatory framework or “accreditation” While online education is not new, colleges and univer- that colleges and universities are currently under is a sities have often priced their online offerings at the same largely collegial peer-review process, meaning the accred- level as in-person classes, despite being far cheaper to iting agencies that evaluate colleges and universities, vet deliver, and have used the profits to subsidize their on- their quality, and control access to federal funding are campus activities. As Burck Smith, founder of two online staffed by members from the same institutions they are higher education companies, notes in Stretching the Higher regulating. This lowers the likelihood that accreditors Education Dollar, “Many colleges’ distance education pro- will rock the boat by calling their peer institutions to task grams are cash cows whose profits are maintained by the for high costs. It also stifles innovation, as accrediting ability to keep prices high, allow students to access federal - 4 - debt, and exert selective credentialing authority.” He cites could go a long way in legitimizing MOOCs in the eyes Arizona State University, whose online partnership with of both potential students, who could transfer the credits Pearson netted a $6 million profit in 2011 alone.15 What is to traditional institutions, and of employers, who could different today is the movement to price online courses far recognize MOOC credit as a valid signal of competency. closer to what it actually costs to deliver them. The Golden State. California has been particularly ambi- The Growth of Massive Open Online Courses. The tious in considering how MOOCs and other online course potential of low-cost online courses is most evident in the providers can lower costs. Two endeavors merit mention emergence of massive open online courses (MOOCs). In because of their cost-saving potential and because they 2011, Stanford University professor and Google scientist are representative of some of the challenges facing these Sebastian Thrun offered his course on artificial intelli- new providers. gence for free online, attracting 160,000 students from First, with Governor Jerry Brown’s support, California more than 190 countries and demonstrating MOOCs’ legislators introduced a bill that urged public institutions potential while ushering in a flurry of media attention.16 to allow students who could not find a seat in overen- Since then, more MOOC providers have sprung up, rolled introductory classes to earn those credits through attracted students, raised funds, and slowly started to an online equivalent, including MOOCs. As AEI’s move from the much-hyped next big thing to grappling Andrew P. Kelly and KC Deane commented at the time, with how to sustain the early fanfare. In the second half of the bill would “empower students to fulfill their degree 2012, a slew of schools joined MOOC providers Coursera requirements in a timely manner even if their own uni- and edX (a joint Massachusetts Institute of Technology– versity can’t fit them in the lecture hall that semester”—a Harvard University partnership), while Udacity (Thrun’s much-needed investment in a state where each commu- outfit) raised $15 million in funding from noted ven- nity college averages 7,000 enrolled students who are ture-capital firm Andreessen Horowitz.17 stuck on course waiting lists, and where only 16 percent of the 420,000 students in the California State University 21 Only 16 percent of the 420,000 students system graduate within four years. Despite passing the California State Assembly in June in the California State University system 2013, the bill’s sponsor, Senator Darrell Steinberg (D-CA), decided to shelve it in August. Ostensibly this was because graduate within four years. California institutions had promised to expand online courses on their own accord, lessening the need for the Coursera’s growth has been particularly impressive: it state to force them to do so via legislation. But vague raised $65 million in two rounds of venture-capital fund- institutional promises are a far cry from actually providing ing and attracted more than 4 million students and more such online courses, prompting journalist Steve Kolowich than 80 partner institutions worldwide.18 In an effort to to write that the “political, regulatory, administrative, and determine how to offer valid course credit, the company faculty barriers to the kind of unfettered online education announced two partnerships. In November 2012, Cour- that MOOC promoters originally envisioned have proved sera partnered with the American Council on Education quite high.”22 to evaluate select courses for credit—something Coursera San Jose State University (SJSU) has also encoun- cofounder Andrew Ng views as a potential game changer. tered implementation hurdles with its own online efforts. “We created Coursera to help students overcome major In January 2013, SJSU announced a partnership with barriers to traditional education access,” Ng said, “and Udacity to run a pilot program of three introductory math providing credit-bearing college courses is a huge mile- courses geared toward incoming students. SJSU professors stone toward that goal.”19 would create the courses and use the Udacity platform to The company’s second partnership was a May 2013 offer them online, and then SJSU students who desired agreement with 10 public-university systems to offer credit could pay $150 to receive it—roughly one-third the credit for Coursera courses, including the State University cost of a normal credit at SJSU.23 of New York system, the University of Tennessee system, The experiment, termed “SJSU+,” would be “a testing the University System of Georgia, and the University of ground for phase two of the MOOC experiment, which Colorado system.20 If these partnerships hold up, they includes fees and a path to college credit, and where - 5 - public colleges try to use material from MOOCs to help In Stretching the Higher Education Dollar, higher educa- meet student demand in gateway courses.”24 The courses tion journalists Paul Fain and Steve Kolowich discuss a were piloted to 300 students—half were SJSU students number of early efforts in this area. This includes MOOC and the rest were a mix of high-school and community- providers planning to let students who pass their courses college students and those waitlisted at SJSU—in pay a small fee for a credential, Udacity and edX part- spring 2013. In a related but separate endeavor, SJSU nering with Pearson to give proctored exams at Pearson announced it would work with edX to offer select edX testing centers to lend their courses more validity, or courses for credit. experimenting with competency-based learning (whereby The SJSU–Udacity partnership and SJSU’s agreement students earn credit for demonstrated knowledge rather with edX were not without critics. In May 2013, a group than accumulated credit hours).28 Elsewhere, established of SJSU philosophy professors sent an open letter to Har- institutions are hoping to utilize online delivery models to vard professor Michael Sandel announcing their refusal lower prices for full degree programs. to teach his famous “Justice” course via edX and generally decrying the MOOC movement as an attempt to “replace Georgia Tech–Udacity. In May 2013, Georgia Tech, one of professors, dismantle departments, and provide a dimin- the country’s top engineering schools, announced a three- ished education for students in public universities.”25 year master’s degree in computer science that will be provided Then, in July, SJSU announced a “pause” on SJSU+, wholly through the MOOC delivery format, via partnership citing poor student performance in the pilot courses.26 with Udacity and with a $2 million boost from AT&T to It is worth noting that the student population enrolled finance the first year.29 The first class will enroll in fall 2014. in SJSU+ could very well have differed from the general Following the typical MOOC format, all courses in the pro- SJSU student, given that SJSU+ included high-school gram will be available on Udacity free of charge to anyone, students, community-college students, and students who but Georgia Tech will only award credit to those they admit, had been waitlisted at SJSU. Poor performance from this are degree-seeking, and pay for the credential—an estimated group of students therefore does not necessarily mean $7,000. This is significantly less than the $25,000 average SJSU+ would falter with already enrolled SJSU students, cost for an online computer science master’s degree or the or that the MOOC experiment in general is doomed to $21,300 (for an in-state student) or $59,900 (for an out-of- fail at other schools. Still, faculty pushback and quality state student) that it would cost in tuition and fees alone to control are the kinds of practical challenges that MOOCs earn the same degree from Georgia Tech in person.30 face going forward. The hype surrounding MOOCs has While it is quite possible that the Georgia Tech–Udacity bordered on the hyperbolic since Udacity, Coursera, and experiment could work with a computer science degree, but edX formed in early 2012. Even the MOOCs themselves not, say, a biology or English degree, the proposition remains were swept up: Udacity’s Sebastian Thrun is on record immensely intriguing. Georgia Tech is seeking to leverage saying SJSU+ could “change the life of Californians.”27 the MOOC delivery model while charging a fee for the Thrun’s premature declaration coupled with the poor credential, betting that the significantly lower cost for the pilot results, however, do not prove that MOOCs cannot degree combined with the George Tech imprimatur will win provide low-cost courses. Rather, the pause on the SJSU+ students over. Whether employers will agree that a degree experiment could instead represent a wise approach earned online is of the same value as one earned in person to quality assurance and a chance for improvement. is an open question, but AT&T is one employer willing Attempts to pursue low-cost higher education options to take a chance: as part of AT&T’s initial funding, a pilot need to be faithful to such concerns, answer objections, program of the online degree will be offered in spring 2014 ensure stakeholder buy-in, and build strong political sup- for select groups, including AT&T employees.31 port. If Udacity can learn from the SJSU+ pilot, it would go a long way in ensuring that similar endeavors do not Competency-Based Learning. Farther north, Southern drown in a sea of overhype. New Hampshire University (SNHU) is experimenting with low-cost degrees. SNHU is a brick-and-mortar, accred- New Modes of Pricing and Awarding Credit ited university, home to 8,000 on-campus students and equipped with dorms, fraternities, and Division II athletics. In addition to course content, alternative providers are It is their online College for America initiative, however, working on assessing and certifying student learning. that has attracted the attention of national figures. - 6 -
College for America, in the words of SNHU president individual has learned through coursework, employment, Paul J. LeBlanc, “means to harness competency-based and other life experiences to send an estimated signal learning models, social networking theories and meth- of competency to future employers. Degreed, whose ods, self-paced learning, open educational resources, and beta version launched in September 2012, is outspoken strong assessment to offer a radically new degree pro- in its attempts to “jailbreak the degree” by providing a gram—radical in terms of price (our target is $4,000 for a score for “lifelong education.” A person can input any two-year associate’s degree), precision of learning out- kind of learning broadly defined—an entire bachelor’s comes, and assurance of quality and mastery.”32 College or associate’s degree, individual courses taken online via for America replaces courses with “competencies,” assigns a MOOC, material learned from midnight sessions on badges to each competency, and insists firmly on using Khan Academy, books read, lectures attended, or skills open-source materials rather than expensive textbooks. picked up from years on the job—and Degreed will out- The combined effect is to allow students, anywhere, to put a lifelong learning score.35 progress at their own pace through course material so long Accredible, started in January 2013, has similar ambi- as they demonstrate competency, with minimal upfront tions in rethinking what a certificate means. Says founder costs in buying books or relocating to a physical campus. Danny King: “We let anyone create certificates for skills, In March 2013, the program got a huge vote of achievements or knowledge they have and let you embed confidence from the US Department of Education when proof of that onto the certificate itself.”36 Ultimately, it’s Secretary Arne Duncan sent a “Dear Colleague” letter conceivable that students in the not-too-distant future encouraging institutions to branch away from the credit could “stack” credentials piecemeal style—an associate’s hour when it comes to measuring student learning.33 Dear degree from a traditional community college, subsequent Colleague letters are frequently circulated among policy- credit from a handful of MOOC courses, and additional makers on Capitol Hill and in federal agencies encour- credit for prior knowledge learned on the job—into a aging votes on certain pieces of legislation or otherwise total package that paints a valid picture of skills and making a public declaration of intent. While Duncan’s knowledge that employers would find valuable. letter does not change any current rules or regulations, it The million-dollar question, of course, is if employers does send a strong signal that the Obama administration will recognize Degreed, Accredible, or similar measures of is open to SNHU’s approach to student learning, and skill and competency with the same force that they recog- offers guidance for other aspiring institutions who want to nize a degree from an accredited university. In areas where experiment with the approach. it is relatively easy to prove competency with an elec- Competency-based instruction makes intuitive sense— tronic portfolio—say, computer programming or graphic judge students on what they know, not how many hours design—employers might be willing to let a certificate they sit in a lecture hall—but its real promise when it from Degreed service as a proxy for a traditional degree, comes to low-cost college is in permitting students to especially if the employer is in an industry (computer sci- move as quickly as they like through their degree require- ence) or location (Silicon Valley) that values doing things ments if they can demonstrate expertise. In August 2013, in new ways. Were this to happen, even in select indus- College for America graduated its first five students—the tries, it is possible that the enterprising 18-year-old who first of whom earned his associate’s degree in just less than loves to tinker with computers in his room could forego 100 days, heralding the potential of competency-based the Ivy League tuition and land a job at Google. education and online education to significantly lower the But there is plenty of reason to be cautious that alter- time and cost to a degree.34 native credentialing will catch on en masse. For one, it is unclear whether similar efforts are bearing much fruit. New Signals to the Labor Market LinkedIn, the popular professional networking site, allows users to “endorse” their colleagues for certain skills. But In addition to College for America’s competency-based there is no indication that employers utilize endorse- approach to learning or to the MOOC providers’ efforts ments to inform their hiring decisions. More fundamen- to legitimize their courses, there are other, more dramatic tally, Degreed and Accredible, like MOOCs, are going developments that aim to tackle the credentialing aspect up against firmly entrenched systems. “Jailbreaking the of the college degree. Two recently launched ventures, degree” sounds fun and edgy, but it is a key piece of the Degreed and Accredible, try to aggregate what an puzzle that colleges will be reticent to give up. - 7 -
Asking New Questions providing valid, low-cost courses and credentials. This includes MOOCs, competency-based learning like that at The Internet has already revolutionized and changed the College for America, and other innovative providers. cost structures for how we listen to music, consume news, One of the biggest hurdles in doing this is accreditation. network, process information, and buy and sell most Burck Smith closes Stretching the Higher Education Dollar every product imaginable. It is not far-fetched to envision with a discussion of the outdated regulatory framework this happening with higher education. And yet to date, that governs higher education, explaining why it is a most of what we view as groundbreaking developments in barrier to innovative providers.37 The current regulatory higher education are in fact fairly pedestrian by compar- structure assumes a higher education model with high ison. MOOCs are still classes taught by professors, and fixed costs undergirded by the premise of scarcity—that MOOC providers like Udacity and Coursera are scram- the stuff it takes to create a college is rare and must be bling to link their courses to established brick-and-mortar aggregated into a central location. This vision of higher institutions to increase validity. Most of the political education is used to justify substantial public subsidies, rhetoric surrounding college affordability—such as Rick driving up costs even while the Internet is making the Perry’s $10,000 bachelor’s degree, the cantankerous vision obsolete: today, information can be distributed for congressional debate over student loan interest rates, or minimal cost worldwide, and there is less of a need for President Obama’s own calls for reform—are trying to professors and students to meet in a central location. By lower the cost of a certain kind of degree, primarily the assuming this vision of what college is, the corresponding four-year bachelor’s degree at existing institutions. higher education accreditation model, Smith argues, favors existing institutions and keeps prices artificially high. “Jailbreaking the degree” sounds fun and edgy, Smith brings personal experience to this question: his company, StraighterLine, offers low-cost, individual but it is a key piece of the puzzle that colleges college courses online. But since an institution has to provide full-degree programs, not just individual courses, will be reticent to give up. to receive accreditation (and, with it, access to federal stu- dent aid), StraighterLine cannot be accredited and loses Perhaps we are asking the wrong set of questions. One out on federal student-aid dollars. Short of a significant of the primary insights of Stretching the Higher Education overhaul of the accreditation system, such reforms are Dollar is just how hard it is to provide low-cost higher edu- unlikely to reach their full cost-savings potential. cation at existing institutions because of factors ranging In addition to revamping accreditation, public policy from the nature of higher education regulation to faculty should seek to provide greater transparency around stu- resistance toward perceived intrusion into their affairs to dent outcomes and costs. “Without objective indicators of the inevitable (and costly) organizational framework that quality and value,” Kelly and Carey conclude in Stretch- tends to spring up at many universities. It is also a result of ing the Higher Education Dollar, “new providers that look the services colleges are trying to provide. nothing like a traditional college will have a hard time If we take Michael Staton’s framework seriously, it competing even if they can enter the market. Rigorous suggests there are certain elements of the higher edu- measures of student outcomes like learning and graduate cation apparatus that are relatively easier or harder to success are needed to level this playing field.”38 Already, provide at low cost. Transferring information is easy to do some of these efforts are happening in the states, where in this way; getting a bunch of students into a dormitory leaders like Florida, Texas, and Virginia are linking their for that transformative experience is much harder. Insofar college and wage records to create data on how graduates as our belief of what “college” is stays about the same, it fare in the labor market. will continue to brush up against these limitations and the Senators Ron Wyden (D-OR) and Marco Rubio’s insights of the cost disease and Bowen’s rule. (R-FL) 2012 Student Right to Know Before You Go Public debates over college affordability and correspond- Act would do something similar from the federal level. ing policy solutions need to shift gears. Instead of trying to Greater transparency is not only useful for consumers, radically change the cost structure at existing schools, we but would also help prevent the information asymmetries ought to instead seek to create a more vibrant and open that currently enable Bowen’s rule to drive up higher higher education marketplace that focuses especially on education costs. While it is too soon to say if these new - 8 - ventures will be successful in their attempts to lower the 9. Douglas N. Harris, “Applying Cost-Effectiveness Analysis cost of higher education, or if public policy will be able to Higher Education: A Framework for Improving Productivity,” to help them do so, there is room for optimism. With sig- in Stretching the Higher Education Dollar, 45–66. nificant political backing, fervent public cries for reform, 10. Ari Blum and Dave Jarrat, “A Strategic Approach to the ever-increasing emergence of new providers, and the Student Services: Five Ways to Enhance Outcomes and Reduce gradual acceptance of even elite Ivy League schools to Costs,” in Stretching the Higher Education Dollar, 67–86. embrace these innovations, it is quite possible that a new 11. Jeffrey J. Selingo, “Bain Goes to College: Rethinking the vision of higher education is emerging, one that can truly Cost Structure of Higher Education,” in Stretching the Higher stretch the higher education dollar. Education Dollar, 87–104. 12. Harris, “Applying the Cost-Effectiveness Analysis to Notes Higher Education,” 61. 13. Selingo, “Brain Goes to College,” 89. 1. National Center for Education Statistics, “Fast Facts: Tuition 14. Michael Staton, “Unbundling Higher Education: Taking Costs of Colleges and Universities,” http://nces.ed.gov/fastfacts Apart the Components of the College Experience,” in Stretching /display.asp?id=76; Libby A. Nelson, “Federal Student Loan Debt the Higher Education Dollar, 107. Tops $1 Trillion,” PoliticoPro, July 17, 2013, www.politico.com/ 15. Burck Smith, “Public Mandates, Private Markets, and story/2013/07/student-loan-debt-tops-1-trillion-94316.html; ‘Stranded’ Public Investment,” in Stretching the Higher Education Arthur M. Hauptman, “10 Dubious Claims about Higher Ed Dollar, 194. Decline,” Inside Higher Ed, June 20, 2013, www.insidehighered. 16. Ben Wildavsky, “Classes for the Masses: Three Institutions’ com/views/2013/06/20/challenging-10-claims-about-higher- Efforts to Create High-Quality, Large-Scale, Low-Cost Online educations-decline-essay; and Phil Oliff, Chris Mai, and Vincent Courses,” in Stretching the Higher Education Dollar, 125–44. Palacios, States Continue to Feel Recession’s Impact (Washington, 17. Audrey Watters, “Top Ed-Tech Trends of 2012: DC: Center on Budget and Policy Priorities, June 27, 2012). MOOCs,” Hack [Higher] Education, December 18, 2012, 2. William J. Bennett, “Do We Need A Revolution In Higher www.insidehighered.com/blogs/hack-higher-education/ Education?” CNN, June 13, 2012, www.cnn.com/2012/06/13/ top-ed-tech-trends-2012-moocs. opinion/bennett-higher-education. 18. Ki Mae Heussner, “More Money for MOOCs: Cour- 3. Barack Obama, “State of the Union 2013: President sera Nabs $43M from Diverse Set of Investors,” July 10, 2013, Obama’s Address to Congress (Transcript),” Washington Post, Gigaom, http://gigaom.com/2013/07/10/more-money-for-moocs- February 12, 2013. coursera-nabs-43m-from-diverse-set-of-investors/. 4. Arlette Saenz and Mary Bruce, “Obama Unveils New 19. “American Council on Education to Evaluate Credit College Affordability Plan,” ABC News, August 22, 2013, http:// Equivalency for Coursera’s Online Courses,” Coursera Blog, abcnews.go.com/blogs/politics/2013/08/obama-unveils-new- http://blog.coursera.org/post/35647313909/american-council- college-affordability-plan/. on-education-to-evaluate-credit. 5. Andrew P. Kelly and Kevin Carey, “Introduction” in 20. Steve Kolowich, “In Deals with 10 Public Universities, Andrew P. 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