Tag: higher education

Can We PROSPER and Be Free?

A New York Times article this week tackled the “conservative social agenda” supposedly packed into the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act that recently moved through the House education committee. The 590-page bill is an effort to renew the Higher Education Act, through which massive federal aid—currently around $136 billion—flows to students. The article and bill are reminders of how far we’ve strayed from a basic understanding of how a free society works.

A free society is pretty easy to grasp. Individuals are allowed to freely act, including to join or not join together based on their own decisions, rather than because they were forced to associate or not associate under threat of physical harm. The ability to legally inflict physical harm—even to kill—is ultimately what empowers government, but only so that government can protect against others inflicting harm on you, or you on them. Government is instituted to maximize freedom.

Reading the Times article, it seems some people don’t get this. The bill itself is a little less confused.

Higher education has been roiled lately with accusations of censorship, political correctness, and discrimination, largely by conservatives concerned about speakers such as Anne Coulter being barred from speaking on campuses. But folks on the left have had their own concerns, including Christian colleges firing professors for violating tenets of faith.

What should this mean for government?

Public institutions—government institutions—must not hire or fire based on faith, or discriminate against speech on campus. Ultimately, legalized violence must not be brought to bear for or against people based on their faith or opinions. Similarly, public institutions must not tell students who choose to freely associate in clubs or groups whom they must let in or keep out to get institutional funding or access to space; that is government punishing or rewarding people based on their associations.

The federal government, in contrast, must not reward or punish private institutions over their rules on association or speech as long as when a student enters and pays her bill a college does not deceive her about its rules. The institution’s rules, freely accepted by the student, are a part of free association, while deception is fraud.

How does the PROSPER Act do on keeping these things straight?

First, the bill would protect religious colleges from losing access to government funding if the loss were based on schools having religious policies some view as discriminatory, such as prohibiting homosexual student relationships, or firing faculty for violating articles of faith. In the Act this is explicitly a defense of religious freedom, but any voluntary association deserves protection. Meanwhile, one may absolutely despise and loudly condemn what an association stands for, but government must not punish members for their beliefs.

How about college rules that say student organizations must be non-discriminatory in whom they admit, or allow to serve as officers? Such rules should be unacceptable at public institutions—they are government curbing freedom of association—but at private institutions you exercise your freedom of association when you enroll, and if that institution wants to have rules about clubs within it, that is fine from a government perspective. Freedom of association includes the right to make constricting rules for members.

PROSPER gets this partially right. It correctly requires only public schools to allow religious groups to make their own decisions about who can join or become an officer. But protection, again, should extend to all associations.

Partial correctness also applies to the Act’s handling of controversial speakers and free speech zones. It says colleges, regardless of type, only court trouble for restricting speech if they say they have one speech policy but in practice have one that is more constrictive. That is the right policy toward private institutions—it would only punish fraud—but for public colleges no speech curbs are acceptable.

The bill also gets things only half right when it comes to allowing students to join single-sex organizations such as sororities. It would prohibit schools from taking “adverse action” against students who join such organizations. The impetus for this, according to the Times, is unhappiness with Harvard for punishing students who are in such groups. PROSPER’s provision should absolutely apply to public institutions, but not a private school like Harvard. Again, students freely agree to its rules when they decide to attend.

Of course, there is a gigantic elephant in the room: Taxpayers are compelled to pay for all colleges indirectly through student aid, and directly through government assistance to institutions. But the problem is the forced funding, not the freedom of association. To fully protect freedom of association—which includes deciding what we fund—we must eliminate the subsidies. We must not further curb freedom because of the subsidies, as happens when we conclude, “you take government money, you take its rules.”

We cannot eliminate subsidies overnight, and at best the PROSPER Act would make a tiny dent. (Even if it trimmed $1.5 billion per year, as the CBO estimates, that would only be about 1 percent of total federal student aid). To minimize compulsion short of elimination, student grants—which are not repaid—should be eliminated, and aid delivered in the form of loans or income-share agreements. Students should ultimately fund their decisions themselves. State funding for public colleges should also be transformed into students loans.

This would not be perfect—free association also means you are not forced to lend people money—but it would get us a lot closer to where we need to be: people freely associating and making rules for themselves, not having government decide whose associations do or do not prosper.

Will We PROSPER with This Act?

This morning the House Committee on Education and the Workforce released its legislation to reauthorize the Higher Education Act, the source of most of what the federal government does in higher ed, especially provide hundreds-of-billions of dollars in student aid. The new legislation is called the Promoting Real Opportunity, Success and Prosperity through Education Reform—or PROSPER—Act. (Oh, these names!) It will take a while to comb through in detail—it’s 542 pages long—but here is a quick reaction to some core parts from a rapid skimming of the bill (and some reporting on a leaked draft):

  • What needs to happen, ultimately, is for federal student aid to be phased out. It fuels tuition inflation, credential inflation, and noncompletion, and students with a demonstrated ability to do legitimate college-level work in in-demand fields would almost certainly be able to find private loans; both borrower and lender would likely profit. This bill, not surprisingly, does not phase aid out. It does, though, consolidate aid programs, and takes some small steps forward, capping total amounts students and their families can borrow from Washington, and letting schools say they won’t let students borrow a lot if the program doesn’t seem to justify it. The federal loan limits aren’t low—from a cap for undergraduate dependent students of $39,000, to a grand possible limit for certain borrowers of $235,500—but just saying there should be caps below the “cost of attendance”—basically, whatever colleges charge plus other expenses—is a start.
  • Other efforts to curb prices and noncompletion include making schools responsible for paying back some of the debt of students who are struggling to repay, and conditioning some funds for minority-serving institutions on at least 25 percent of students completing their programs or successfully transferring to other institutions. Both of these changes appear to put blame on institutions while ignoring the root problem—the federal government gives people money to pay for college without any meaningful assessment of their ability to do college-level work—but it might have some positive effects on prices and completion.
  • The law would end “gainful employment” regulations targeting for-profit colleges, and would also end a requirement that for a school to be accessible online in a state, it must be approved by that state even if its physical home is somewhere else. These things would free the system up a bit, but how much is unclear.

There is a lot else in there—provisions on TRIO programs, accreditation, a data “dashboard” on school and program outcomes, and more—and I’ll really have to scrutinize the thing to make sure I have all the details right. But from a quick look, this bill would generally move in the right direction, though with many miles to go to reach good higher education policy.

A Tax Bill Provision Only Athletic Directors Could Hate

It’s obviously too early to spike the football, but there is a provision in both the Senate and House tax bills that everyone should be able to endorse, except maybe colleges and their athletics departments: eliminating the 80 percent federal tax deduction college sports season ticket holders get when they pay “seat license” fees—often called “charitable gifts”—charged by schools. It’s an absurd deduction that I’ve complained about periodically, and it’s nice to see it targeted for elimination. And in case we need a reminder that this deduction has zilch to do with the “public good” that higher ed so often gives as its excuse for every special treatment it demands, USA Today has reported that this season 12 big football schools alone are on the hook for at least $70 million to buy out fired head coaches. Sounds like a lot of private good there.

These days it seems like we on Team America can’t agree on anything, but we all ought to agree on this: the seat license deduction must go.

College: Ragnarok

For the second week in a row, Thor: Ragnarok was the big winner at the box office, pulling in $56.6 million in North America last weekend and bringing its worldwide take to more than $650 million. Ragnarok is the mythological destruction of Asgard and the Norse gods, but in real life it has been a huge, money-making win for Marvel Studios. Meanwhile, American higher education has been declaring that it is facing its own Ragnarok in the form of the House Republican tax plan. This end time, in stark contrast to Thor: Ragnarok, will come from a distinct lack of money. As a Washington Post headline asks, is this “The Last Stand for American Higher Education?”

What the Hela

I have qualms about some of the GOP proposals. For instance, the plan would tax “tuition discounts”—basically, prices not actually charged—for graduate students. That’s not technically income, so on normative grounds I’m not sure it should be taxed. The plan also calls for an “excise tax” on the earnings of endowments worth $250,000 or more per student at private institutions. It would impact but a nano-handful of institutions—around 50 out of thousands—and amounts to little more than a politicized, “Take That, Harvard!”

That said, the idea that higher ed is somehow teetering on the edge of financial destruction is ludicrous.

Consider revenues at public colleges since the onset of the Great Recession, during which we supposedly saw massive “disinvestment.” While it is true that total state and local appropriations dipped, total public college revenue rose markedly, from $273 billion in academic year 07-08, to $347 billion in 14-15, a 27 percent increase. Even on an inflation-adjusted, per-pupil basis revenue increased: From $31,561 per student in 07-08, to $32,887 in 14-15, a 4 percent rise. To put that in perspective, per-capita income in the United States is $28,930.

Federal data on private colleges is pretty volatile—it’s not clear why, for instance, between 07-08 and 08-09 total revenue dropped from $139 billion to $69 billion—but it, too, shows little sign of penury. Between 07-08 and 14-15 total revenue rose from $139 billion to $200 billion, a 44 percent increase, and inflation-adjusted per-pupil revenue went from $51,629 to $59,270, a 15 percent increase.

Do Colleges Have an Edifice Complex, an Amenities Arms Race, or Both?

Think of college, and your mind may well conjure images of ivy creeping up the walls of stately, gray, Gothic stone buildings in which the deepest of learning occurs. Such buildings exist, of course, but reality is not so pleasantly simple: Those buildings cost big money to erect and maintain, money many colleges may not have. What’s more, students often demand that more fun stuff, rather than deep learning, occur inside them. Or so a new report suggests.

“College and university enrollments are, in aggregate, either stable or declining,” intones the report, titled “The State of Facilities in Higher Education: 2016 Benchmarks, Best Practices and Trends.” The paper is from Sightlines, an outfit that provides facilities data to academia. “In light of the building boom of recent years, many campuses now have more space to maintain and fewer students to fill it.”

Essentially, the report says that colleges have been on a big building binge, but enrollment has been stagnant or declining. The basic math is concerning: Greater capital costs, plus decreasing revenue, equals trouble.

Has the building boom been driven by an edifice complex — college presidents and faculty love new buildings all over campus that are imposing, cutting edge, or both — or an amenities arms race to bring in students?

It’s probably both, but the report puts the onus on a destructive race to attract increasingly scarce students who demand ever more luxury:

Several campuses, realizing the possibility of a decline in enrollment, used the new construction (especially for housing, dining, and recreation facilities) as a way of attracting additional students. The hope being that the development of new amenities and support services can make a campus more attractive to millennials. According to several campus administrators, today’s student body “expects” high-end dormitories, multiple dining options, and modern fitness and recreational facilities. But fulfilling those expectations comes at a cost.

The report says that for decades, college construction has focused more on creating non-academic than academic space, and about half of all college space today is for non-academic use.

It’s a classic arms race: Colleges frightened of losing tuition dollars feel constant pressure to spend on expensive facilities to compete for students, in the process greatly increasing the danger of becoming even more insecure financially, maybe hopelessly so.

But how can students demand all these pricey things that are often superfluous to learning?

The answer, largely, is that someone else is paying.

Students, like most people, would take nice things, all else equal. But most people are constrained by cost: They often can’t afford, or cannot justify, spending their hard-earned money on many lovely but expensive items or services. The vast majority of students, however, pay for college in part with someone else’s dough.

Much of that is in the form of direct taxpayer subsidies to public institutions, which enroll about 73 percent of all students, and in 2015 absorbed around $87 billion in state and local subsidies. Then there is federal student aid, including grants, loans, work study, and tax benefits, which totaled $158 billion in 2015.

Students can demand so much because, in large part, you and all your taxpaying friends are footing the bill.

College campuses are often covered in buildings that feel grand, almost mythical. But they are rooted in gritty reality: Someone’s got to pay for them, and that’s getting harder to do. Maybe the solution is to have those who demand the good life pay for it themselves.

[Cross-posted from the Washington Examiner’s Beltway Confidential blog]

Does Higher Ed Prove We Need Bigger, Stronger Gates?

With school choice advocate Betsy DeVos slated to become the next U.S. Secretary of Education, the battle between regulation and freedom has suddenly become more intense, with people on both sides exchanging fire. Yesterday, Jason Bedrick weighed in against regulation, while today Jeffrey Selingo warns that a major reason “choice hasn’t necessarily led to better outcomes in higher education is the absence of a strong gatekeeper for quality control.”

This sort of assertion strikes me as more an article of intuitive faith than a conclusion based on evidence. If only some well-informed, smart group of experts decided what people could choose, choices would be much better. The problem is that no one has the omniscience to do the job, especially so effectively that the costs of bureaucracy, barriers to entry, and kneecapping of innovation don’t severely outweigh the hoped-for benefits.

Is For-Profit Higher Ed Horrible? Can We Talk, Please?

Obviously, numerous Obama administration policies hang in the balance with the coming of a new president and Republican majorities in both houses of Congress. Among them is an administration campaign that has been waged against for-profit colleges, a sector of higher education seen by many as uniquely predatory and, it is probably fair to say, uniquely awful. But is the sector so horrible? And horrible or not, does the election mean a reprieve is coming?

To answer these questions—and in the interest of having a real exchange of views—this Wednesday Cato’s Center for Educational Freedom will be hosting a Q & A-intensive forum on for-profit colleges featuring several of the sector’s most prominent critics and defenders, including former Obama administration member Robert Shireman and Center for College Affordability and Productivity director Richard Vedder. We’ll also be fielding questions through Twitter using #CatoHigherEd.

One lesson from the just-completed election seems to be that different parts of America have been talking about and past each other, but rarely to each other. At least when it comes to for-profit higher ed, at least for one morning, we plan to do something different. Register today to join us in-person, or watch online—and join us via Twitter—at 10:00 am ET, on Wednesday, November 16.

Talk with you then!

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