Topic: General

Another Look at the Higher Ed Blueprint

I was prepared to share Neal McCluskey’s outrage at the Secretary of Education’s Commission on the Future of Higher Education preliminary draft report, but then I followed the link, and I have a different take.  I’d give the report at least a B+. Of course, this sort of report this late in a President’s term is almost sure to be nothing but a dust collector regardless of what it says. But let me point out some of the good points.

Colleges should be held accountable for the success of the students they admit. Improved collection of data on student persistence will allow consumers of higher education to evaluate institutional success and identify best practices.

Good idea. Before you send your kid to a college, know whether the kid is likely to graduate.

States and institutions should review and revise standards for transfer of credit among higher education institutions to improve quality and reduce time-to-goal.

Another good idea. When the University of Maryland balked at giving my daughter credit for calculus she took at the University of Rochester, I was flabbergasted.

The present financial aid system should be replaced with a strategically oriented, results-driven consolidation of programs to serve students who need aid in order to attend college.

Again, a good idea. Need-based aid instead of broad-based aid.

At the state level, one promising approach that should be encouraged is placing increased emphasis on empowering consumers by redirecting assistance to individual students instead of institutions. The same effect could occur with a well designed expansion of the Pell Grant program.

This is a very powerful idea. Give the money to the education consumers instead of the rent-seekers.

The collection of data allowing meaningful interstate comparison of student learning should be encouraged and expanded to all 50 states. By using assessments of adult literacy, tests that many students already take for licensure and for graduate and professional school admission, and specially administered tests of general intellectual skills such as the Collegiate Learning Assessment, state policymakers can make valid interstate comparisons of student learning and identify shortcomings as well as best practices.

As a parent about to help a third child choose a college, I really resent the lack of hard data on college effectiveness. It is tempting to shop on the basis of price, because we have no objective measure of quality.

Overall, this report says government should do more things that are relatively good, such as gather useful data, direct funds to needy consumers, and examine ways to encourage more entry and competition (which is why the issue of accreditation needs to be opened up–it’s a strong cartel-enforcement tool). It also says, if perhaps more implicitly than one might like, that government should do fewer things that are relatively bad, such as throw money at institutions.

I guess the bottom line is, don’t take my opinion or Neal’s opinion as gospel. If you think that the report matters (and again, I have my doubts), then read the draft yourself.

Do Student Debtors Need to Grow Up?

With the deadline nearing to consolidate federal student loans before their interest rates rise to reflect overall lending rates, media sob stories about student debt keep on coming….and getting harder to take.

A CBS News report last night that profiled two engaged medical school students was all too typical.

“Jason DeBonis and Katrina Lust can use any breaks they can find,” reporter Randall Pinkston intoned at the outset of the story. “The two medical students are young and in love. They plan to marry in May. Their wedding gift to each other: a combined total of nearly $500,000 in student loans.”

Ouch! $500,000 – that certainly seems like a terrible wedding present. That is, until you see what the doctors-to-be will be getting for that $500,000, which, of course, CBS News didn’t report.

According to the federal Bureau of Labor Statistics (BLS), in 2004 the average family practice doctor with less than two years experience in that specialty – the lowest paid doctor on the BLS list – made $137,119. The average doctor with the same experience in the highest paid specialty, anesthesiology, made $259,948.

Now, assume that both students in the CBS News report become family practice doctors, and for thirty years make the lowest yearly income listed by the BLS. That’s unrealistic, of course, but let’s be conservative. All told, they would make $8,227,140, a profit of more than $7.7 million after debt!

So what’s the problem? According to one of the medical students, this is:

“It makes me upset that I have to maybe not do what I want to do because I won’t be able to pay my bills at the end of the month.”

How sad. Apparently, in order to become a doctor and make her multi-million dollar profit, this medical student might actually have to give up some other things she would like to do. Reality bites: She has to make trade-offs between different things she wants just like everyone else!

An even more galling complaint about student debt in the story was offered by Anya Kamenetz, perhaps the foremost spokesperson for young people who feel unfairly put-upon because they’ve been asked to pay for part of their own education. “When you’re not standing on your own two feet, when you’re still accepting help from mom and dad, when you still can’t pay the bills, when you’re still struggling to stay out from under debt, you don’t feel like an adult,” she complained.

So this is what it comes down to: No matter how big its payoff, student debt is unfair because it keeps students from getting everything they want, and makes it harder for them to feel grown up.

What two more childish reasons could there be for crying about student loans?

Blueprint for an Ivory Tower Disaster

Late Monday, the Secretary of Education’s Commission on the Future of Higher Education – a group tasked with creating a “national strategy” for post-secondary schooling – released a preliminary draft of its findings and recommendations. Thankfully, it is just a draft, because almost everything it calls for – from marked increases in student aid, to more government-imposed “accountability”– would devastate American higher education.

American academia’s biggest problem is that thanks to government aid to both students and institutions it is financed largely by taxpayers rather than the students it is educating. This “third-party payer problem” has led to huge waste, as the draft report acknowledges:

In our view, affordability is directly affected by the failure of post-secondary institutions to take aggressive steps to improve institutional efficiency and productivity. That…can be traced to a system of third-party payments…that gives college and universities little incentive to control costs and find innovative ways to teach students. On the contrary, for many institutions the path to prestige involves spending more money, whether on costly laboratories or lavish student dorms, an academic arms race that often doesn’t serve the public interest.

Having apparently understood the third-party payer problem, you would think the commission would call for the obvious – eliminating government interference in higher education. You would be wrong. In fact, the report’s very first recommendation is for the nation (read: “government”) to “commit to an unprecedented effort to expand access to college by providing substantial increases in need-based aid…”

Of course, expanding student aid isn’t the report’s only recommendation. It also calls for new “Lifelong Learning Accounts” to be financed through tax incentives; federal enticements for states and higher education organizations to implement standardized testing schemes; a new “national student unit record tracking system” that would include data on almost every college student in the country; and a “national accreditation framework” that the federal government could use to impose uniformity on the ivory tower.

All of these big-government recommendations are supposed to help us compete in the global economy, which is ironic given the performances of our competitors’ very centralized systems of higher education. In the late 1990s, for instance, China’s economic planners offered huge incentives for young people to go to college. Today, roughly 60 percent of recent Chinese college graduates are struggling to find jobs. Or look at Europe: According to the Centre for European Reform, that continent’s colleges and universities “are failing to provide the intellectual and creative energy that is required to improve the continent’s poor economic performance.”

Clearly, to keep itself and the country competitive, the last thing American higher education needs is more government money or control. Unfortunately, the Secretary of Education’s Commission seems poised to recommend a lot more of both.

Alito vs. Roberts

I’m wading into the decisions this week somewhat belatedly, as I have spent the last two days, like many homeowners in the D.C. metro area, salvaging my flooded basement. 

John notes below some of the bad news leaking between the lines of Justice Breyer’s opinion in Randall v. Sorrell:  namely, Justice Breyer’s paean to the precedential status of Buckley v. Valeo, the fount of the modern First Amendment framework governing campaign finance regulation.

I’d make two addendums to John’s comments:  First, I’m less concerned than he is about Justice Alito’s vote in the case.  It’s true that Alito, like the Chief Justice and unlike Justices Kennedy, Thomas, and Scalia, joined the bulk of the Breyer opinion, including the application of Buckley to contribution limits.  John’s reading–that Alito is a foe of the First Amendment in the realm of campaign finance–may well prove to be right.  But not necessarily.   Note that Alito refuses to join the portions of Breyer’s opinion that specifically reaffirm Buckley as a matter of stare decisis, based on the fact that the parties didn’t brief Buckley’s continued validity in any serious, meaningful way.  (See page 2 of Alito’s concurrence in the Court’s attached slip opinion:  ”[O]nly once in 99 pages of briefing from respondents do the words ‘stare decisis’ appear … . Such an incomplete presentation is reason enough to refuse respondents’ invitation to reexamine Buckley.”).  That caveat gives him more than enough room to join Kennedy, Thomas, and Scalia in a later case, where the validity of Buckley–applied to either expenditures or contributions–is squarely presented on the briefs.  Indeed, Alito’s concurrence is an invitation to lawyers to attack Buckley in a future case.  He’s saying, “When you’re ready to argue, I’m ready to listen.”  This is a rather cautious approach to judging, but one that is perfectly compatible with overruling Buckley in toto in a later case.

Roberts, on the other hand, is a different matter.  He joins the portions of Breyer’s opinion that state Buckley is good law as a matter of stare decisis–the only other justice in the majority to do so–committing himself, it seems, to the kind of case-by-case “narrow tailoring” scrutiny of state contribution limits that Breyer envisions.   This is more tea leaf evidence of Roberts’ minimalist approach to judging.  While Breyer favors this approach based on his belief that the First Amendment should be used to further the “active liberty” of democratic participation in government, my guess is that Roberts is committed to the same framework based on a simple commitment to the values of precedent, fueled by his belief that courts should do as little as possible to displace democratic debate in a “complex” regulatory arena.  (The irony, of course, is that the complexity of campaign finance law is a creation of the diffident, muddled approach to First Amendment restraints on regulation of campaign expenditures and contributions pioneered by Buckley). 

The contrast suggests what may turn out to be a subtle but very important difference between Alito and Roberts.   Alito and Roberts have a cautious, conservative with a small “c” streak.  But Alito, I’m guessing, is cautious as a pragmatic, belt-and-suspenders matter, because he wants to make sure that the Court’s big decisions have the benefit of the most considered legal arguments available in their favor.  Thus, he doesn’t want to shift the legal landscape until he has the benefit of lots and lots of smart lawyerly briefs giving him a menu of the widest possible top-shelf legal thinking in favor of change.  Roberts, by contrast, is cautious out of a theoretical commitment to judicial caution for its own sake.  He simply doesn’t like it when the Court makes “big decisions” that reshape the legal landscape, especially in areas where politicians are heavily invested in the outcome.  The latter approach–if this indeed characterizes the Chief, which the evidence increasingly suggests–is far more troubling over the long run.

Breyer’s Gambit

In the Supreme Court’s ruling in Randall v. Sorrell, six justices agreed that Vermont’s campaign spending and contribution limits violated the First Amendment. That majority split, however, on what made the Vermont law invalid, resulting in what was in essence a plurality ruling.  Justices Breyer, Roberts and Alito affirmed Buckley v. Valeo’s finding that spending limits violated the First Amendment. In striking down Vermont’s contribution limits, the plurality sought to break new ground.

In the past, the Supreme Court has said contribution limits should not be so low as to prevent “effective advocacy.” In fact, the “effective advocacy” standard did not constrain legislatures; the Court approved contribution limits deferring to the legislature’s “expertise” in this matter.

Vermont’s contribution limits, however, went too far, according to Justice Breyer, because they harmed “the electoral process by preventing challengers from mounting effective campaigns against incumbent officeholders, thereby reducing democratic accountability.”

For Breyer, the First Amendment is not a constraint on state power expressed as “Congress shall make no law.” Rather, it is a means to realize the value of democratic accountability. That value requires that challengers be able to mount effective campaigns against incumbents. The government can prevent such effective campaigning through contribution limits. Hence, Vermont’s limits must be struck down.

Of course, the Constitution does not demand that Congress advance democratic accountability. But the language of the Constitution has not constrained the Court for some time. Five members of a future Court majority might well explicitly import “democratic accountability” into the First Amendment as a way of enlarging, rather than constraining, state power.

Citing Breyer’s opinion, a future Court might require taxpayers to fund campaigns as way to enable effective challenges against incumbents, thereby increasing democratic accountability. It might also cite democratic accountability as grounds for imposing draconian restrictions on groups that have “undue influence.”

People concerned about free speech welcomed the Randall v. Sorrell decision, but the plurality sought to affirm “democratic accountability” and not the idea of limited government spelled out in the First Amendment. This is not surprising. Justice Breyer is no friend of free speech in campaign finance. That Justices Roberts and Alito signed on to his opinion cannot be a good sign for the future of free speech.

Judge to Federal Prosecutors: Put Those Guns Away & Tell the Truth

In a closely watched case, a federal judge has finally called the Justice Department to account for its high-handed tactics against business firms and businesspeople that are under investigation. 

Prosecutors are increasingly using the threat of indictment to pressure firms into discharging certain employees and reneging on pre-existing company policies that would reimburse employees for attorneys’ fees associated with the business. When a CEO is convinced that some of his employees have engaged in criminal conduct, his decision is easy.  But if the CEO is unsure or is convinced of their innocence, shouldn’t he maintain a presumption of innocence and help the employees in question by honoring the company policy?  And what if prosecutors step up the pressure by leaking stories to press about the company’s “ongoing failure to cooperate with investigators”?

Here’s an excerpt from today’s NYT story:

In a strongly worded opinion, Judge Kaplan agreed with the defendants’ contention that KPMG, which was under criminal investigation, was improperly pressured to cut their legal fees.

KPMG refused to pay the defendants’ legal expenses, he wrote “because the government held the proverbial gun to its head.”

The government, he said, “has let its zeal get in the way of its judgment.”

In his ruling, the judge wrote that during negotiations with KPMG, the government violated the employees’ Fifth Amendment right to a fundamentally fair trial and their Sixth Amendment right to a lawyer.

An employer’s payment of legal fees is “very much part of American life,” he wrote, and applies to “bus drivers sued for accidents, cops sued for allegedly wrongful arrests, nurses named in malpractice cases, news reporters sued in libel cases and corporate chieftains embroiled in securities litigation.”

The right to legal fees is “as much a part of the bargain between employer and employee as salary or wages,” he wrote.

The judge also dressed down Manhattan prosecutors for being “economical with the truth” about pressuring KPMG to cut off the fees.

In his new book, Trapped, John Hasnas critiques the tactics of federal prosecutors because they so often put CEOs in catch-22 situations in which they must either act illegally or unethically.  To listen to a lecture by the author, go here.  For still more background, go here.

For Affordable Health Insurance, Cross the Delaware

My brother (whose name, no joke, is Eugene) just moved to New Jersey with his wife (Katryce) and the two cutest nieces you ever saw (Helaina and Deaven). 

New Jersey is known as health insurance hell, so I went to eHealthInsurance.com to see how much it would cost Euge to purchase a family policy in New Jersey’s highly regulated individual market.  Answer: a lot.  In fact, some of his options cost more than my mortgage.  Meanwhile, our college buddy in Doylestown (Mike) has over five times as many choices for covering his wife and two daughters in Pennsylvania’s individual market.  And the most expensive policy in PA is about the same price as the least expensive plan in NJ.  If Euge were just to move his family in with his old roommate, he could save thousands on health insurance.

…or, Congress could just tear down the senseless trade barriers that keep New Jerseyites from purchasing health insurance from Pennsylvania.

Get the full story here.