Importantly, a four-year undergraduate education needn’t be the only option. Other programs — including apprenticeships and short-term retraining — can provide the skills that the job market demands. To that end, the government should increase its support for community colleges, and federal grants should be extended to worthwhile certificate programs lasting less than a year.
Last but not least, students and families need better information about the available options. A kid growing up in a poor neighborhood might not know anyone who went to college, and faces an onslaught of advertising from less-than-scrupulous institutions offering unduly expensive educations. To remedy this, the government should give high school students and their parents clearer guidance: Here are some quality institutions that you can attend free if you start preparing now.
Cost Control
The current system rewards colleges for raising prices. Families fill out the Free Application for Federal Student Aid to estimate what they can afford, but the result has no effect on what institutions can charge. Consider a student who qualifies for $10,000 in grants and loans. If the college charges $5,000 in tuition — leaving the student $5,000 for books, room, board and other expenses — it’s forgoing additional income. Why not capture the full federal subsidy by charging $10,000? This is precisely what colleges tend to do, often using the extra money to supplant state funding.
The government should provide money only to those schools that agree to charge no more than what the FAFSA says students can afford — while meeting other conditions, such as enrolling a reasonable share of low-income students and investing in instruction and academic support. This would curb tuition and sharply lower costs for the poorest families, in many cases to zero. Most important, it would reward colleges for keeping costs down.
To achieve the greatest impact, any reform of federal funding should be structured to encourage greater responsibility on the part of the states — which in the last decade radically cut funding for higher education. Washington could, for example, channel more grant money through the states, getting them involved in monitoring compliance and offering bonuses to those that restored funding to designated levels. This could vastly increase the total resources devoted to meeting the reform’s goals.
Quality
All accredited institutions have equal access to government aid. Even schools with terrible outcomes and the highest loan default rates get as much money per student as the best schools. This rewards bad actors for skimping on instruction and engaging in aggressive marketing to bring in as many people as possible. The Trump administration has aggravated the problem, reversing an Obama-era effort to shut down one of the worst accrediting organizations.
In general, it’s too hard to know how colleges are performing. Even sophisticated researchers won’t find comprehensive information on student outcomes, such as median earnings: In 2008, Congress effectively forbade the government to gather it.
To shed more light on quality, Congress should allow the Department of Education to bring together the tax and other data needed to provide a complete picture of the expected return of different schools and programs. All this information should be available on the department’s College Scorecard website, along with other metrics on transfer and part-time students and veterans. Such transparency can help students avoid aiming for degrees they can’t complete, or ending up with big debts and worthless diplomas.