Barriers to college are barriers to the pursuit of happiness. Research shows that college graduates live healthier, happier lives. At the same time, their productivity is increasingly vital to the U.S. economy. A college graduate today can expect almost double the lifetime earnings of someone with only a high-school diploma, and that wage differential continues to rise.
Cities with high levels of education have correspondingly high incomes, which help attract more educated newcomers, and higher-paying employers, in a dynamic, virtuous economic circle.
But despite many pockets of excellence, the U.S. higher-education system overall achieves mediocre results at a high cost. In recent years, the U.S. has fallen from first in the world in the percentage of young people who are college graduates to 16th. Roughly two-thirds of those graduates have student-loan debt; for the class of 2010, the average debt rose to a record of more than $25,000 per graduate. Some carry debt loads so burdensome that they influence not only the viability of career paths but even prospects for marriage and child-rearing.
Having previously increased federal grants for college students, President Barack Obama last month announced a plan to enable borrowers to cap their student-loan debt repayments at 10 percent of discretionary income. It’s a sensible effort to increase the money in young consumers’ pockets during hard economic times and to make college slightly more affordable. But even if every qualifying student takes advantage of it, its effect will be limited.
Given budget constraints and gridlock in Washington, additional financial help is unlikely to materialize. Yet as a report released last week by the American Enterprise Institute makes clear, there is still much that the government can do to help students navigate a system that is often as bewildering as it is expensive.
Requiring more transparency and access to data is the first step. As the Education Department’s Commission on the Future of Higher Education noted in 2006, schools fail to provide “adequate internal accountability systems or effective public information.”
The 2008 reauthorization of the Higher Education Opportunity Act sought to clear up some of the muddle by imposing new information requirements on colleges and universities. But the American Enterprise Institute found that compliance has been at best haphazard. Data about the relative quality of college programs, including graduation rates and work placement, are hard to find. This matters less in the Ivy League, where students mostly know what they’re signing up for, than in the hundreds of public universities and community colleges that form the backbone of American higher education.
Students at these institutions need a lot more transparency and accountability. They should be able to access a standardized page on every college website that provides information on degree and certificate programs based on costs, rates of graduation and employment, and even the median earnings of graduates.
Using only aggregate statistics would allay privacy concerns, and since colleges already possess much of the data, compiling and organizing it for public access wouldn’t be an onerous task. Some schools already provide information along these lines, but the American Enterprise Institute found mostly “widespread noncompliance” with the 2008 law, no doubt partly because of its vague standards. The Education Department should establish clearer guidelines for disclosure and certify institutions that comply.
Not everyone can or should go to college. But in a global knowledge economy, higher education for the masses, including quality community-college programs that can prove their value, is no longer a luxury. Establishing a database of outcomes is a relatively inexpensive way to spur institutions to deliver both quality and value -- and to let students see the results.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at firstname.lastname@example.org.