But He Won’t Rock the Boat

On May 23, the Romney campaign released a white paper entitled “A Chance for Every Child.” It sets out Republican candidate Mitt Romney’s thoughts on improving both K-12 and higher education in America. I read through the pages dealing with higher education and found just what I had anticipated—criticism of the status quo coupled with meek changes that won’t rock the boat.

Sadly, the paper’s higher education section begins not with criticism but instead with the boilerplate cheer that American higher education is “the envy of the world” and is our economy’s “greatest competitive strength.” Yes, there are some towering peaks to be found in our colleges and universities, tremendous educational programs that have trained some of the world’s best minds. For the most part, however, our system is one of highly expensive mediocrity. The rest of the world does not envy the United States for the hordes of young people who go to college, enjoy years of partying interrupted by occasional work, then graduate (if at all) with minimal gains in cognitive ability.

Nor is it true that higher education is America’s “greatest competitive strength.” College education is sometimes useful, but many of our great innovators have done their work without a college degree. Actually, our greatest competitive strength has been the greater freedom Americans have had to try new ideas and profit if the ideas work out, compared with people in the rest of the world. (The U.S. has been losing ground to other countries with regard to the degree of economic freedom enjoyed by the people, but this isn’t the time to discuss that issue.)

Now let’s get into the substance of the white paper.

Romney earns an A for challenging the conventional belief that the labor force is changing in ways that require more and more workers to have a college education. The paper correctly states that “the current emphasis on the standard four-year degree may be misplaced” and that most jobs will call for two-year degrees, occupational certificates, or apprenticeships.

That is an important point. Ever since the Johnson administration, federal higher education policy has been built on the premise that the more students who earn B.A. degrees, the better. Romney apparently is willing to deny that and acknowledge that much of the preparation for work is best done outside of formal college degree programs.

The writers of the paper also grasp that the abundant federal aid (grants and loans) to students helps to drive up the cost of going to college. They grasp that many students are left with large debts whether or not they complete their degrees and that, with default rates rising, taxpayers are going to be “left on the hook” for a lot of unpaid college expense.  

What would logically follow from those observations is that federal policy should no longer lure young people into the quest for those standard, expensive four-year college degrees.

Unfortunately, the paper does not call for any serious change in the status quo. Its big summary merely says, “A Romney Administration will address these challenges by improving access and affordability, promoting innovation, and ensuring transparency about performance.” We’re only promised some tinkering with our high-cost, low-efficiency system and as we’ll see, the tinkering isn’t very good either.

Access and affordability—those lovely words trip off every politician’s tongue when the subject is higher education. The essence of our problem is that we have already way overdone it with regard to access and affordability. Due to the ingrained idea that going to college makes everyone more productive, we now encourage even the least academically inclined high school graduates to enroll in college by telling them that with a degree they’ll earn much more money. The federal government helps in that Pied-Pipering by putting plenty of money in students’ pockets, spendable only at accredited colleges.

Getting into the business of financing higher education was one of the country’s worst decisions. Unfortunately, Romney doesn’t show any interest in undoing it, even gradually. His paper proposes to “simplify” the federal student aid system, but the problem is not its complexity but rather that it is so easy for so many students, regardless of their academic ability, to get so much money out of it. Assuming that there are savings from “eliminat[ing] programs that are duplicative, inefficient, or ineffective” the funds would be concentrated “directly on helping students.” Sounds nice, but that’s just tinkering around with a flawed concept.

That Romney doesn’t want anything but cosmetic changes was evidenced in April when he hastened to match President Obama in declaring that the interest rate on federal student loans must not be allowed to rise from the ridiculously low rate of 3.4 percent to 6.8 percent. Rick Hess of the American Enterprise Institute accurately labeled this a bipartisan panderfest.

The only hint of substantive change is that a Romney administration would “refocus Pell Grant dollars on the students that need them most.” It’s true that quite a few Pell grant recipients are not from needy families, as the Pope Center’s recent study demonstrated, but restricting Pell grants only to families making less than $40,000 per year would reduce the cost of the program by only 20 percent.

Tellingly, Romney’s paper does not advocate restricting Pell Grants to students whose weak academic abilities make it unlikely that they would derive much benefit from college studies. That would reduce costs much more, and, crucially, would also attack the main problem of weak students being lured into college.

Another apparent change that the Romney paper trumpets is giving students better information about the costs and benefits of college so they can make more informed choices. We’re informed that a Romney administration would create “consumer-friendly data on the success of specific institutions” so that students would know about graduation rates, future earnings, loan repayment rates, and so on.

Here’s the trouble. At best, doing that might cause some students to choose a different college than otherwise; it does nothing to reduce the overall number of students going to college who ought to be pursuing some other course after finishing high school. Putting that information in front of students and their parents might lead some to make worse school choices than otherwise.  Here’s why.

Let us say that a student is considering College A and University B. The federal government’s data show that College A has a 25 percent graduation rate and University B has a 33 percent graduation rate. University B would appear to be the better choice, ceteris paribus.

Not so fast. There are imponderables hidden in the data. What if University B achieves its “better” graduation rate by resorting to grade inflation and relaxing its standards? Perhaps the student is more capable and motivated than the typical student at either school and would probably fulfill the graduation requirements at College A and University B.  Deciding not to enroll at the College on the basis of its lower graduation rate might be a bad mistake.

My point is that the choice of a college is so much a matter of individual fit that having a federal website chock full of those supposedly vital data is of very little value and maybe none at all. Further involving the federal government in higher education by providing information about colleges and universities is unnecessary; almost everyone can already find an abundance of such information as it is.

Equally unnecessary is another Romney foray—“to increase the opportunity to save and invest for higher education, particularly for low- and moderate-income families.” There is currently an array of college savings programs available to families no matter what their income level. Each state has a 529 Plan. The federal government has established Coverdell Educational Savings Accounts. Families can put money meant for college expenses into Uniform Gifts to Minors accounts. There’s no apparent reason why a Romney administration needs to reinvent this wheel.

Lastly, the white paper contains some nice rhetoric about moving away from “degrees based on time spent in the classroom” and toward measured competency. That shift, however, is already well under way. The federal government does not force students to undertake lengthy, expensive, and increasingly useless degree programs. Nor are federal regulations doing much to impede the growth of new and more pertinent kinds of education and certification, such as badges.

Summing up, the Romney paper fails to address the central problem of federal involvement in higher education, namely that its student aid programs continue to drive up the cost of college while luring in large numbers of students who ought to pursue some course other than college. Under the Constitution, the federal government has no role to play in education at all. Unfortunately, Romney doesn’t propose any discernable reduction in the large role it has come to play.