Will the President's Plan Help or Harm Higher Education?

Last week, President Obama unveiled his plan to reform higher education, and he began his bus tour to promote that plan in my hometown of Buffalo. One of the local television stations engaged me to provide "expert analysis" throughout its morning-long coverage of the event. A presidential visit is big news here in western New York.

I found some aspects of the plan to be productive. It calls for ensuring that student debt is affordable by allowing borrowers to cap their payments on federal student loans at ten percent of their total monthly income. This will make sure that loan payments do not overwhelm any given borrower. The government will also assist student borrowers through Pay-as-You-Earn and Income-Based Repayment programs.

These along with efforts to promote innovation and competition are positive measures and should be applauded.

My real concern is with the plan's proposal to create a new college rating system and to tie student aid to it. I have no problem with my institution being rated or with a new rating system in general, but who will create this system? Higher education experts? Or politicians? Allowing ill-informed people to devise the rating system can easily make a bad situation worse.

Having spent thirty-five years in higher education, I have seen countless well-intentioned plans on state and federal levels that have--let's just say--been less than successful. If the Obama administration does not choose wisely who devises its plan, the entire reform could be in jeopardy.

While details are sketchy about what the rating system will look like, a fact sheet released to the media by the Obama administration prior to the president's appearance in Buffalo cites as possible measures graduation rates, the earnings of students who have graduated, and advanced degrees earned by students who have graduated.

Tracking the number of students who go on to earn advanced degrees is potentially a useful measure, though it needs to be tempered with the knowledge that advanced degrees are not needed or even desirable in every profession.

The other two measures, however, are bad ideas. Tracking how much students earn is misleading and will contribute to a skewed "rating" of institutions. If your institution is heavily oriented toward the arts and the humanities, for example, your students will likely be entering relatively low paying professions.

If, on the other hand, your institution is like my own, Daemen College, which has a heavy orientation toward health care professions, then your graduates will be earning considerably more than their compatriots in the nearby liberal arts college.

Tracking an institution's graduation rate can also be misleading if the tracking is not nuanced. For many years, the federal government and the higher education community have used a six-year graduation rate as a measure. The logic was a good one: the student population is a much more diverse population than thirty or forty years ago when the vast majority of students came from affluent families and did not need to work while attending college.

Recently, many commentators have called for returning to tracking institutions' four-year rates. This is a very bad idea and a subject I will address in a forthcoming column.

Suffice it to say that the president has an opportunity to make a positive reform with his new plan, but he also has the opportunity to make things much worse.