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Cut College Costs Using Carrots, Not Sticks | Commentary

It’s no secret college costs too much. In fact, we’re at the point where student debt exceeds that of credit card holders. This is a particular problem for first-generation and low-income students (the ones the president wants to talk about in an early 2014 White House meeting). If this barrier to education is not addressed, our economic competitiveness and standard of living will fall, as the Commission on the Future of Higher Education warned in 2006.

The magnitude of the cost problem can be seen in the results of a 2012 study by Higher Education Strategies. In the United States, it now takes more than 50 percent of a new grad’s average first-year salary to pay one year of college debt. Only in Mexico and Japan are students paying a higher percentage. German, French and Scandinavian students pay less than 5 percent of expected first-year salary.

No single cause can be identified for these increases over the past 10 years. The changing revenue model of public education, however, is certainly a factor. Other contributors include the loss of income from institutional reserves and endowments (because of low interest rates); health care costs for the sector’s large workforce; and, less noted, the growth in the cost of regulatory compliance.

We strongly support President Barack Obama’s goals of lowering costs and increasing graduation rates. But these have not been backed with supporting policies from the Department of Education. Aside from a half-hearted attempt to open new pathways through such “innovations” as direct assessment and, more recently, competency-based credentialing, the department appears to favor “sticks” over “carrots.” The missing piece is this: We cannot regulate our way to affordability.

To seriously address cost, we need to more clearly articulate whom higher education serves and what is needed to do so. Should the focus be on meeting the needs of the 18- to 24-year-olds living and studying full time on a college campus? Or should it be on the 85 percent who are older, employed and studying part time (out of necessity).

Once we accurately define the typical student, it is easier to discuss how to cut costs. In the case of young students on traditional campuses, we need to talk about the disincentives for faculty to teach or embrace cost-saving technologies. Let’s discuss issues of capacity and the fact that both facilities and faculty are underutilized 25 percent of the year. We must address how high-school juniors and seniors can dual enroll in college courses (online, by exam or at a local college) and complete their general education courses before setting foot on the campus where they matriculate.

At a time when 60 percent of new jobs require more than a secondary education, we have a workforce of more than 93 million who do not have a degree. To get these adults back to school, we need to be thinking incentives (carrots), not regulatory sticks. Tax credits for returning students isn’t a new idea, but tax credits for employers that provide tuition assistance to workers is.

Additionally, we must change the focus of higher ed from an antiquated time-based credit-hour system to one that is focused on student learning and outcomes. It’s about learning, not time. Competency programs and credit for prior learning both belong in the mainstream. Such efforts reduce time-to-degree and cost, while increasing the likelihood of completion 2.5 times, according to research by the Council on Adult and Experiential Learning.

We maintain that greater buy-in will come in with incentive carrots, not regulatory sticks. Rather than mandate acceptance of credits in transfer (and thereby provoke a war with faculty), we propose adding a feature to the president’s rating system that recognizes — and rewards — institutions for accepting prior learning and transfer credit. This is where real savings can be realized.

John F. Ebersole is president of Excelsior College in Albany, N.Y. Bill Simmons is a managing principal at Dutko Grayling.

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