Washington Monthly - September/October 2014 - 8

Editor's Note

Paul Glastris

The Beginning of the End of
Higher Education's Special Deal
T

his fall, the Obama administration will release the first
draft of a plan to rate America's colleges and universities.
When it does, all hell will break loose, because the ratings spell
the beginning of the end of a special deal the higher education
sector has long enjoyed.
The deal is this: Washington gives institutions of higher
learning about $150 billion a year in the form of student aid,
research grants, and various tax breaks. In return, those institutions promise the federal government ... nothing. Schools
are under no obligation to demonstrate that they've spent that
money effectively-by, say, keeping prices down, or increasing
their graduation rates, or helping more lower-income students
get degrees, or showing that any of their students have learned
a damn thing. The money just flows, year after year, in evergreater amounts.
The administration's new ratings, which are scheduled to go
into effect in time for the 2015-16 school year, will be the first
concrete step by Washington to demand some accountability
for that investment. Individual colleges will be graded on measures of access (such as the percentage of Pell students they
enroll), affordability (the net price of attendance), and outcome (graduation rates, loan default rates, and so on). Such
metrics may seem familiar to longtime readers of the Washington Monthly, since we've been ranking schools that way for
years in our annual college guide, which we proudly offer again
in this issue. Our coverage begins on page 19.
But we're just one magazine. It's obviously a much bigger
deal for the federal government to define the higher ed hierarchy in this way, so different from the conventional view, epitomized by the U.S. News & World Report, in which college status
is based on reputation, money, and exclusivity. Like nutrition
labeling or Energy Star ratings, the new federal college ratings,
if done right, will give prospective students and their families
better information with which to make their decisions. That,
in turn, should put more market pressure on colleges and universities to deliver more value for the money.
There are a lot of colleges out there that won't look so good
on such a rating system. Some of them could be put out of business, especially if federal dollars are tied to the ratings, as the
president would like to see Congress do (he can implement the
rating system itself by executive action). Not surprisingly, the
trade associations that represent colleges and universities in

September/October 2014

Washington are doing everything they can to block the administration. As Laura Colarusso and Jon Marcus report (page 43),
their lobbyists are partnering with Republicans in Congress to
frame the ratings as both an oppressive regulation and an unconstitutional White House power grab-the message du jour
of the GOP going into the November elections.
Crafting a rating system that serves the interests of students and taxpayers but is also fair to colleges will certainly be
tricky. As Ben Miller shows (page 36), just figuring out which
colleges are the worst performers is tough given the wide variety of ways they can fail students. Moreover, universities are
complicated human organizations and can be damaged in unintended ways by ill-considered federal rules. Zachary Schrag
demonstrates this in his story (page 61) about institutional review boards (IRBs), federally mandated entities meant to curb
unethical behavior by university researchers that in practice
have wound up also stifling perfectly benign scholarship. The
answer is not to abandon the ethics regulation entirely but to
craft a more balanced version, as Schrag shows other countries
have successfully done.
Indeed, in addition to adding some new regulations on the
higher education sector, we need to scale back others, specifically those that restrict the entry of innovative new players
into the market. Kevin Carey profiles one such player (page 48),
a company that runs "boot camps"-intense, short-duration
courses meant to give college graduates the specific skills they
need to land good-paying jobs. Currently, students can't use
federal grants and loans to attend boot camps. Remove that restriction and boot camps could give more-expensive master's
degree programs at traditional colleges a run for their money.
The whole way we connect college grads to jobs in this country
is due for an overhaul. Amy Binder makes that clear in her story (page 53) of how elite schools like Harvard are complicit in a
rigged recruiting game that funnels a disproportionate number of their graduates to Wall Street, where many wind up hating both their jobs and themselves.
The deal that higher education has traditionally enjoyed
in America-billions in tax dollars, zero responsibility for
results-is certainly a sweet one. But in an era when a college
degree has never been more expensive or more important for
upward mobility, it's one we can no longer afford. Federal power must be exercised with care. But it must be exercised.

Washington Monthly - September/October 2014

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