The National Commission Report: First Impressions

By Richard Vedder

I have just read the just prepared latest, and hopefully near-final, draft of the report of the Secretary of Education's Commission on the Future of Higher Education.

Is the report what I would have written if I were czar with dictatorial powers to change things? No. Does the report address or even mention all the important issues facing higher education today? Again, the answer is no. Does the report give very specific and detailed recommendations on the major problems of interest to me, namely issues of affordability and productivity? In general, no. Is the report, therefore, highly imperfect as the definitive policy document for higher education for the next decade? Here, the answer is "yes."

Having said all of this, does this mean that I, as a member of the Commission, will not be signing the report? No. I plan to sign it, barring some last minute revisions that soften its tone, water down its recommendations, etc. Why? While imperfect, I ask the question: will the Commission's recommendations, if implemented, improve higher education and America? I think the answer is clearly yes.

Here are a few things the report recommends that are positive:

1) Higher education should be made more transparent. Colleges should report their finances in an uniform, easy-to-understand manner. Performances indicators, such as 4, 5, and 6 year graduation rates should be clearly published so consumers can compare them. Most important, colleges should be encouraged to develop measures of "value added" during college --what did the kids learn? This is a modest attempt to bring about some sort of "bottom line."

2) A commitment must be made to reduce per student growth in costs, and reduce the rise in tuition fees. Although a bit vague as to how this will be done, the rhetoric is pretty good. Promoting greater student mobility between institutions by easing transfer of credit, for example, will foster greater competition.

3) While a bit vague, the financial aid recommendations are clearly a step in the right direction. Increase the Pell Grant amounts; Pell grants are essentially a student voucher, which is the preferred way of subsidizing universities if subsidies are going to be given. Implicitly, the report recommends reducing federal subsidized loans for relatively affluent students, and for privatizing more of the student loan market. If higher education has the high rate of returns that its proponents claim, then people should be willing to invest in themselves by borrowing at competitive market interest rates.

4) Ease barriers to entry into higher education, and make accrediation more open, transparent, and outcomes based.

5) Promote able students taking more college classes in high school.

The report does not propose voucherizing all federal funds for higher education, drastically clamping down on student loan growth (although that is clearly implied in some of the recommendations), encourage year-round utilization of facilities, question teaching loads, comment on redundant and expensive graduation programs, or a host of other issues. It says too little about for profit education, and does not explore ideas such as privatizing state universities. It does not acknowledge that many students do not work hard, or even mention, much less condemn, grade inflation. Intellectual intolerance and a frequent scorn for diversity of opinions is not condemned. While some mention of inadequate learning occurs, the shameful state of student learning (or, better, lack of learning) about our own heritage is not discussed, nor is graduate education or research (except tangentially). No discussion exists about over-specialization, or a lack of a coherent core curriculum. It does not have explicit recommendations how, for example, we can rid ourselves of the current student loan system and replace it with an alternative -- the Australian model, the idea of Arthur Beroz, etc. Perhaps students should be allowed to sell stock in themselves (equity) rather than bonds (current IOU lending arrangements) -- none of these novel ideas are explicitly discussed.

Having said all of this, however, the report is a step, albeit not as bold of one as I would like, in the direction of promoting greater efficiency and accountability in American higher education, and, for this reason, I will likely vote for it next week (if a vote is taken, as I expect).