September 16, 2013
Re: Obama adds voice to college rating debate
President Obama has proven himself willing and able to attack imperfections he perceives in major American industries. After helping create a paradigm shift in financial regulation through Dodd-Frank, and a revolution in the basic nature of American government through the Affordable Care Act, he has turned his attention to higher education. Unfortunately, President Obama’s proposed new college rating system will do more harm than good.
What rating system does the President have in mind? In a recent speech at the University of Buffalo, President Obama called for a college rating system based on “metrics like how much student debt does the average student leave with, how easy it is to pay off, how many students graduate on time, how well do those graduates do in the workforce.” Once this rating system is in place, Obama will ask Congress to provide federal aid to universities based on their ratings, with higher-rated colleges receiving more than lower rated ones. Presumably, this will provide incentive for colleges to cut student costs and provide a better education.
This idea reflects worrisome assumptions on the part of our President. One of the American higher education system’s greatest attributes is its diversity. It encompasses 4,495 degree-granting institutions, including schools as small as Hamilton, as large as Ohio State, research institutions, liberal arts colleges and religious seminaries.
Our president assumes that our government is capable of devising one definitive system to assess every last one of these disparate institutions. His assumptions do not end there. He also assumes that the government is capable of knowing, better than citizens, what citizens should get out of an education. To be sure, student debt, on-time graduation and success in the workforce determine where many students attend college. This is reasonable. But our president’s assumption that he can devise a system that reduces the potentially priceless gifts of higher education to these factors is unreasonable.
Supported by these scary assumptions, our government and its president seek to control both the content of higher education and the prices at which institutions offer that content. Institutions that adjust their content to receive government approval through the new rating system will receive more federal aid. This will allow them to offer cheaper educations, and cheap educations attract students. Thus the government arms itself with the ability to steer students toward the institutions whose content meets its own standards.
One may, however, sympathize with the president’s efforts to improve higher education. Since The Wealth of Nations, prominent writers have drawn attention to rampant, perverse incentives in higher education.
Today, those disincentives manifest themselves in runaway tuition costs and, consequently, in student debt. President Obama’s proposal will, however, have perverse incentives of its own. Under his system, the government will help determine what the best-attended and best-funded universities are. These universities will subsequently lose any incentive to innovate, as they will have gained and retained their status not through innovation, but by meeting government demands. If they have acquired money and students by following a government-approved course of action, logic tells us that they may forsake beneficial innovations because of uncertainty about how their federal evaluators will respond.
Let us hope that this proposed rating system remains just that.
Paul Carrier ’14