Thoughts on the New America Foundation Report

The New America Foundation released a wonderful and thought-provoking paper proposing a serious overhaul of Federal financial aid.  It’s a lot to digest, and I’ve only had the chance to give it a brief run-through.  That said, a few thoughts:

First, there’s plenty to like.  Turning Pell grants into entitlements -- that is, with predictable annual funding -- makes a world of sense, as does restoring summer Pell.  (The previous round of summer Pell was too brief for colleges to adjust as much as would have been helpful.)  Income-based repayments have a lot to be said for them, and direct lending is clearly and vastly preferable to running public loans through banks.  

I was heartened, too, to see an open call for restoring the eligibility for students who enroll under “ability to benefit.”  Until last year, students who lacked a high school diploma or GED could take an exam and establish that they had the “ability to benefit” from higher education.  That came in handy for people from a host of different life circumstances.  With the GED becoming more expensive -- and possibly more rigorous -- losing that safety valve shuts a lot of people out.  

Expanding “experimental site authority,” as the paper suggests, also strikes me as a must-do.  There are entirely too many perverse incentives in the current system, but folks on the ground are mostly powerless to do anything about them.  Letting more colleges try more innovations strikes me as a low-cost way of road-testing different approaches, and thereby generating data to show which approaches are worth broader adoption.

That said, though, I have several reservations that I’d love to see the NAF consider.

First, the proposal suggests capping time-to-degree at 125 percent of the “normative” time.  (Right now it’s 150 percent.)  A student would have 2 ½ years to get a 2 year degree, or 5 years to get a 4 year degree.  

That’s tricky on a number of levels.  Most basically, it recommits financial aid to time-based measures of learning.  If we need to get past the credit hour -- Amy Laitinen, one of the authors of the paper, has written brilliantly on that elsewhere -- then we need to allow financial aid to flow to programs that aren’t based on time. To the extent that we write normative measures of time into law, we make it that much harder for colleges to experiment with credit for prior learning, competency-based credit, and the like.  Given that one of the goals of the paper is cost containment, I would think that escaping the iron grip of Baumol’s cost disease would be a high priority.

Second, the proposal misconstrues developmental education, and inadvertently reinforces its worst features.  The paper excludes developmental students from the 125 percent limit, which sounds fine if you assume that students are either entirely developmental or entirely not, and that they take their developmental coursework all at once.  But that’s not usually the case. Students who take developmental math, for example, also frequently take other college-level courses at the same time.  Making progress towards a degree matters to students, and so does the ability to take courses that hold their interest.   

At a more fundamental level, many colleges are experimenting with building developmental coursework into college-level courses in real time.  (The Carnegie Foundation has supported a variation on this through its “mathway” and “statway” projects.)  As I understand it, the mathway model involves placing most students directly into college-level courses from the outset, but then providing just-in-time extra review as they go along. (The class has extra hours to accommodate the extra help.)  The goal is to get students what they need, when they see that they need it, and in a format that allows them to perceive -- correctly -- that they’re actually progressing towards the degree.   A financial aid rule that relies on a bright line distinction between developmental and college level coursework would just get in the way.  I’d hate to see a promising academic innovation sacrificed to a financial aid rule, even if the rule were well-intended.

The 125 percent rule also makes little sense when applied to credit-bearing certificates, which are increasingly popular in community colleges.  “Stackable” certificates are all the rage now.  They work by building employable off-ramps into degree programs.  For example, on the way to a nursing degree, a student might be able to pick up a CNA certification.  That way, if the student has to stop out or drop out, s/he isn’t leaving empty-handed and debt-burdened.  She’s walking away with a credential that can help her get a job quickly.  Then when she returns, she’s already on her way to her nursing degree.  

Stackable certificates can offer the relatively quick turnaround that appeals to adults who got laid off and need a job fast.  But unlike non-credit certificates or whatever it is that unaccredited for-profits offer, they also allow the student to make simultaneous and real progress towards a degree.

The catch is that many students who want stackable certificates have developmental needs, and those can’t be addressed if the window is too small.  The 150 percent rule is challenging enough; 125 percent would be that much worse.  

I also wonder about the political realism of the paper.  It outlines a host of proposals, but insists that they’re all connected, and that they don’t make sense if separated.  Color me nervous.  There’s a perfectly valid mathematical and ethical argument for capping student loans and eliminating tuition tax deductions to pay for increases in Pell grants.  But there’s also a strong political argument for making sure the middle class gets its own.  Once the middle class decides that a program is really just for the poor, that program tends to wither on the vine.  If the price of Pell is some tax expenditures for the middle class, that may be a price worth paying.  

Finally, I wonder if the premise of the paper is a shade too easy.  Simply put, it assumes that colleges can and will get their budgets under control if financial aid adjusts.

Two thoughts.  First, in the community college world, the idea that budgets have been anything other than tight for the last decade is just otherworldly.  For most of my administrative career, I’ve been managing austerity in one form or another.  Tuition/fee increases lately have been much more about flat or declining state support than about profligate spending.  If you don’t believe me, look at what adjuncts get paid.  It isn’t profligate by any stretch.

Second, at this point, many of the drivers of cost increases are either external or structural.  Assuming that we just need a little “discipline” is about as helpful as assuming that America could conquer its obesity problem if we all just had more will power.  It’s just not that simple.  Yes, the cost curve needs to be bent, but doing that will require a lot more room to move.  Getting more restrictive, when we should be getting more creative, isn’t the answer.

Anyway, those are some first thoughts.  Wise and worldly readers, I really recommend giving the paper a good once-over; if you have a chance, I’d love to hear your thoughts on it.  And if anyone from the NAF reads this, I’d love to hear from them, too.