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As recently as a decade ago, the concept of “value” rarely found its way into discussions about federal policy making about higher education. Now a meaningful conversation rarely unfolds without raising the issue.
A recent episode of The Key, Inside Higher Ed’s news and analysis podcast, explored how politicians and policy makers are responding to growing public questioning about the value of getting a postsecondary degree—or perhaps stoking it—by defining and trying to measure whether individual institutions and academic programs are providing value to consumers.
The episode featured three guests: Clare McCann, who was a key member of the Biden administration’s higher education policy team and recently joined Arnold Ventures as a higher education fellow; Will Doyle, a professor of higher education at Vanderbilt University’s Peabody College, who studies the government’s role in higher education; and Ernest Ezeugo, a member of the federal policy team at Lumina Foundation. They discussed how the concept of value is factoring into state and federal policy, what’s driving that trend and whether an overdependence on economic outcomes can lead to unintended consequences.
An edited transcript of the discussion follows.
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Inside Higher Ed: How appropriate is it for federal and state governments to judge colleges based on the value they provide? What if any risks might occur in doing so?
McCann: One of the most important obligations that government has, both at the federal and state level, is to protect consumers and to ensure that taxpayer dollars are being well spent. For most Americans who are considering college or who enroll in college, they say they’re doing it to find a job, to enter a career, to make a decent living. And the promise has been made to students by higher education that if they do enroll in college, they will be able to earn a job that lets them repay their debts and enter the middle class.
But for too many of them, that doesn’t turn out to be the case. Many students struggle to complete, and a lot of programs and colleges vary, sometimes significantly, in the returns their students see. Policy makers also wind up making poor investments in some colleges and some programs that can’t live up to that promise. That’s why we’ve seen policy makers at both the state and federal level try to turn to these measurable outcomes of success. It’s a way to separate the wheat from the chaff, to help students find colleges and programs that will work for them and to help better target taxpayer investments into colleges that will provide a decent return on investment.
Inside Higher Ed: Is a definition of “value” laid out in federal statute anywhere? The Obama administration made a stab at defining the term “gainful employment,” which was the first real attempt by the federal government to measure value. We’ve taken to defining it so far mostly through economic terms. That makes sense in certain ways, given what you accurately described as the reason most go to college. But more philosophically, how and why are we defining value in the way that we are right now?
McCann: You certainly see it in the history around the policy, if not, in the Higher Education Act itself. You can read back at why the Pell Grant was created, why the student loan program was created, and see that the policy makers’ intent was for those dollars help students go to college. They thought that going to college would provide that return on investment, that it would serve as a source of economic mobility for students. As you point out, the gainful-employment regulations are a prime example of trying to put some math behind those words and try[ing] to really hold institutions accountable where the Higher Education Act does specifically call for it.
Inside Higher Ed: Will, you pay a lot of attention to the government role in higher education. What’s your sense of sort of how governments are trying to define value and build some way of measuring value into their policy making?
Doyle: I look at this a lot from the state level, and state policy makers have perfectly reasonable questions to ask about what’s happening for the spending that they’re putting into higher education. The reason that students and families are paying for higher education is to ensure that they can have higher earnings as a start—their first if not their only goal for higher education. Similarly, for state policy makers, the [overwhelming] reason they want to support higher education is to increase individual opportunity in the state and also ensure economic competitiveness for the state as a whole.
It’s a reasonable question: For all the money that they’re putting in, are they seeing higher earnings from grads? We have tons of evidence, good causal evidence, that for an additional year of postsecondary education, earnings are going to increase by between 8 and 10 percent. The problem is all in the variation. The next place that a lot of state policy makers tend to go is, are there certain areas of study that we should focus on, and certain areas of studies that we should discourage or even eliminate? That’s a much tougher question. As a proud philosophy major, I always take offense when state policy makers say, “We’ve got to get rid of philosophy degrees.” There’s the risk you were talking about in the beginning: if you want to centralize that process of which programs should be offered, which are the degrees of value, that turns out to be an exceedingly complex question.
Inside Higher Ed: Ernest, how do you come at this question about the role of policy in judging institutions’ value?
Ezeugo: I approach a lot of this work from a personal level. My mom, when she was alive, attended a small school in Dallas that was for-profit and made a lot of promises about the connections they had to different hospitals in the area [where] she studied to be a nurse. She attended this career program specifically because she wanted to better her own economic lot, protect herself from economic downturn and volatility. Her own return was not at all what was promised—the partnerships that the institution promised that they had with hospitals and other high-quality employers didn’t pan out.
The data is important. But beyond the numbers, [it’s important to dive] deeper, to see how lives are affected, by the way they interact with higher education and the way they see or do not see the return. What’s most exciting to me about the work that’s going on right now on value is the acknowledgment that this conversation is just part of the process. We need to make good on the promise that [higher education] makes not just to the folks who pursue it directly, but also to how their families do and how their communities do.
Inside Higher Ed: What is omitted or underemphasized when we define value pretty exclusively in economic outcomes? Clare, you explained early on why it’s the logical starting place and should be a core focus. But is it where we should stay, or should we ultimately be building out a broader definition of value?
McCann: The value of higher education goes far beyond what’s easily quantifiable. From a federal policy perspective, much of what we’re trying to do is raise the floor to require programs to demonstrate a minimum level of value. Earnings isn’t the only measure worth considering. It’s not the only measure that policy makers consider, but it’s definitely one of the most important. Getting back to what I said earlier, postcollege earnings, a solid living wage, is what students are looking for when they enroll. So that becomes one of the most important questions for policy makers, and it’s also, importantly, a measurable, comparable outcome. It’s harder to game than some of the other measures that are out there. So while there are a variety of outcomes worth considering, for accountability purposes, I think earnings are a critical piece of that puzzle.
Inside Higher Ed: The government has now published program-level data, and that changed the picture in a lot in ways that have been pretty impactful. What are some of the ways beyond what is happening now that those data could be used in judging institutions? Where might this lead?
McCann: The gainful-employment regulations, which apply to for-profit and nondegree programs, did have an effect on the field. There is evidence that when those data were published, even though the rule ended up being withdrawn before it was ever fully implemented, the institutions responded to even the threat of sanctions. These regulations did have an important effect, and probably will again when the Biden administration publishes the new ones. Similarly, we’ve seen a lot of states and systems trying to tackle these issues on their own. They want to know how their institutions are doing, where the challenges are, how to better serve their students, and they’re looking at state wage records in new ways, setting up exchanges with neighboring states.
Some are working with the Census Bureau to try and get this information. Some are working with other entities that are out there, like the Coleridge Initiative, which helps provide states with that kind of data infrastructure. There will be additional progress in this accountability space, and it won’t be limited to gainful-employment programs forever. I think policy makers are interested in seeing these kinds of tests applied to additional schools and additional types of programs,
Inside Higher Ed: The postcollege earnings measure looks at value primarily through an individual prism. There is a lot of bristling in higher education at the perceived reductionism of that measure. What’s a more holistic view of the value of higher education, and is that something policy makers should be striving for? Or as Clare said, is it appropriate for the federal role to be setting a minimum bar everybody needs to get over and leaving it up to accreditors or states to look at value in other ways?
Doyle: It’s a reasonable question for policy makers to ask. Clare has done excellent work in thinking about the three groups—the accreditors, the federal government and state governments—that are involved in holding institutions accountable. At the state level, it’s a perfectly reasonable question to ask, what are we getting for the spending that we’re doing? I think we could ask that question more broadly, incorporating other things that we hope that we’re getting from higher education. The civic benefits, such as voting, for example, and volunteering, charitable giving. Many institutional leaders and state policy makers think that’s something institutions should help to encourage. We know a little bit about it. The benefits in terms of voting are pretty substantial. The little that we know suggests that other civic benefits, like volunteering, are not nearly as big as you might expect. It’s reasonable to ask why and what can be done to increase those.
Circling back to the earnings, the couple of difficulties I would point to are, first, we focus a lot on the averages. Within many of these areas of study, there’s a huge amount of variability. Business majors are the most common bachelor’s degree that’s awarded, and that seems like a good value proposition, with a clear connection to the labor market. But there’s a big amount of variability for business majors.
Then there’s the question of short term versus long term. We know that STEM majors short term do substantially better than humanities majors, but what you see over time is the convergence between the two. After 20 years you end up with a big overlap in earnings between those two broad fields. It’s difficult to ask people to wait 20 years to find out what happened, but I do think it’s worth remembering that some of these questions about value won’t be resolved until the person has been in the labor force for some time.
Inside Higher Ed: That’s where you’d think we will just enrich and expand the measures that we use. We may start with income and postcollege earnings, one and three and five years out. But ultimately, we may end up with a richer array of measures that extend over a number of years, and possibly to try to incorporate other factors.
There are people who believe we should be judging all institutions on return on investment, not just the for-profits. We saw a proposal recently from a conservative policy foundation in Texas looking at how programs of all types would fare using some of these same program-level metrics. We’ve seen publications and others, from a clear disclosure standpoint, hold some online programs accountable. Clare, now that you’ve left the administration, how do you view that question about which programs deserve that kind of scrutiny from a pure enforcement and accountability level versus a disclosure level? How much wind do you see behind the sails of a “gainful employment for all” approach that some people favor?
McCann: It’s important to make sure it’s clear why the gainful-employment rules are limited to the sectors that they’re limited to. Congress required in the Higher Education Act that for-profit and nondegree programs meet this additional test of demonstrating they lead to gainful employment. That’s where the authority for the gainful-employment regulations comes from, and why other institutions aren’t included. So this is a great question for Congress.
I would also say there is absolutely no doubt certain pockets of the higher education system have shown disproportionate problems, and the for-profit sector is absolutely one of those. We have seen higher debt levels, higher default rates, lower employment, lower earnings in the for-profit sector, so from a sense of triage, it certainly makes sense to focus those regulations there. But the truth is that accountability is needed at all levels across the higher education system. That is especially true in the graduate education space, where we’ve seen institutions allowing students to take on runaway debt levels for programs that are not going to have commensurate value in the labor market.
So it is certainly my hope that Congress will start to tackle the need for some of this broad-based accountability as it is considering the future of higher education legislation. But also recognize there are a lot of limitations right now in the Education Department’s ability to tackle that problem.
Inside Higher Ed: Will, what’s your take on which institutions should be held to account on proving their value?
Doyle: I agree with Clare—there’s a pressing need in the one sector where we’re seeing really pretty alarming results. We had a moving description of this from Ernest in terms of the kinds of things that can happen to people if we don’t have these protections in place.
Beyond that, if we start thinking about efforts to discourage people in majoring in certain things where they might not earn as much in and encourage enrollment in other areas, that’s where the complexity comes in. Most students do have a pretty good sense of which majors will provide them with the highest earnings. They know that chemical engineering, for example, is a really great thing to major in for earnings. It’s just that a whole lot of people don’t want to be chemical engineers, and there’s not all that much that we can do to induce them to go into those fields. More broadly, there were efforts at the federal level to redesign the Pell [Grant] program to push people into STEM and other related fields. All that ended up doing was providing more money for people who were going to do that anyway.
In graduate education, to the extent that there are deceptive practices, these absolutely should be monitored. To the extent that there are claims about earnings that cannot be realized, public or private, that’s the responsibility of state governments to address that. The more difficult question is if there are degree programs that people would simply like to be in—theater and fine arts generally just don’t earn that much, and yet they see pretty consistent enrollments. I’m not sure we want to design policy to discourage people from enrolling in those programs.
Inside Higher Ed: In some of those cases, it’s political, not policy, where we’re seeing governors discourage people from majoring in anthropology, say. And some of our most important professions are not particularly well paid—social workers and teachers, let alone the starving artist that you were just referring to. How do you think about the historically low-paying fields and do they pose a conundrum?
McCann: This is an incredibly important question, and a challenge. Our country needs childcare workers and social workers and home health aides. But we can’t perpetuate a low-paid workforce, that is disproportionately made up of women and people of color, by asking them to finance their own training with unaffordable levels of student debt. What it comes back to is that we need to ensure jobs that are requiring higher education—especially where the student is going to be paying for that education themselves, often by using student loan debt—those jobs need to pay enough to sustain those workers. We need to ensure those workers are able to afford the education, through scholarships or through employer partnerships.
Inside Higher Ed: In the last decade we’ve seen a shift in who pays for college, with students and families in many states now paying for more of their education than the state is. Going beyond value, whose responsibility is it to ensure that college is affordable?
Ezeugo: A critical part of this conversation about value is about affordability, about investment in higher education [not just] as an individual risk but about as something that’s a benefit to society. We know that most people pursue higher education and seek to graduate with a credential that helps them better their economic future. But we also know that higher education increases problem-solving skills, critical thinking skills, help[s] them become more empathetic. There are a lot of societal benefits that are much harder to measure. And as a result, much harder to kind of legislate than some of the economic benefits, but they’re equally as critical.
Many Americans and their families [are] seeking out more risky options, taking out more debt and individual burden, taking on more personal burden. We absolutely need to be thinking about a way to move away from that and move back toward all of us putting our money where our mouth is … to lower the cost of higher education broadly.
Inside Higher Ed: We are absolutely seeing greater questioning of the value of going to college by the public. I’m curious whether you think that questioning is understandable and sound. And if so, what can move that needle back in the other direction? Is it mostly about affordability? About outcome? What do you think is likely to make a difference in restoring the faith of the country in the value of higher education?
Doyle: I’ll start off by saying I think Ernest is exactly right: affordability is a huge part of this. Higher education has been able to get away with pricing with impunity, because there was a labor market payoff and more and more people went even as they were raising the price. We may finally have reached the end of that road. Tuition is leveling off and coming down over the last couple of years.
But it’s a bit of a puzzle, right? The part of the population that did the best during the most recent recession was the most educated part of the population. At the same time, we saw increasing doubts about the value of college and decreasing enrollment rates. That’s alarming. It’s not entirely clear why that’s the case. We can hope things will return to the way they were, but I don’t think that’s going to do it. I think the answer is in some combination of getting the prices down and making the information about the connection between postsecondary education and a better economic future much more clear than it is now.
McCann: Students are bearing more of the cost of higher education, as Ernest pointed out, and I think particularly as the public discourse around student loans has gotten more heated, there is no doubt that we are seeing some students and families scared off of higher education altogether. To Will’s point, the risk is that students will make choices in the short term that alter the courses of their lives. They may be much worse off in the long run by not attending higher education or by attending a program that’s not going to provide them with the value they want to see.
We can make that promise of higher education as a middle-class pathway a possibility again by raising the floor on higher education and making sure our taxpayer dollars are going to programs that have demonstrated that they will lead to value for students. We owe it to students and to their families to make them that promise: when you enroll in this program, it will provide you with value, and that value will be tangible and quantifiable. That’s going to be a critical step in restoring trust in the higher education system.
