the national interest

Obama Goes Back to School

UNITED STATES - JUNE 02: A group of students meet on the lawn outside Webster Hall on the campus of Dartmouth College, the smallest school in the Ivy League, in Hanover, New Hampshire, U.S., on Tuesday, June 2, 2009. Dartmouth, whose endowment was valued at $3.7 billion as of June 30, likely lost about 23 percent from that point through the end of March, Moody's Investors Service said May 27. (Photo by Cheryl Senter/Bloomberg via Getty Images)
Photo: Bloomberg

President Obama’s higher-education speech today marks a genuinely significant turn in long-term policy agenda. Democrats’ approach to college policy has always focused on increasing access by subsidizing tuition, and this has defined the partisan fault line: Democrats want to jack up subsidies that make college affordable for non-rich students, while Republicans want to spend less.

Obama argues that subsidization alone is not working — the rise of college tuition places a constant, unsustainable pressure on financial aid in order to keep pace. What’s more, the system largely shovels money out the door with little regard for ensuring that college students receive real value for their tuition dollars. Obama’s policy turn is to place his party behind a dual agenda of college affordability, including both subsidies to students and a coordinated agenda designed to increase the value of a college education.

Colleges, and especially elite colleges, pay very little attention to holding down costs. (Indeed, the rankings of the best colleges use higher spending as one of the metrics, so an administrator who cuts the budget risks seeing his school fall down the prestige rankings and start attracting less competitive students.) Obama’s basic goal is to change the culture of higher education by prodding it from every direction. The government would give students more options in the schools available to them and for getting the best terms on their loans — low-income students, in particular, have far less information and make far worse decisions about applying to and paying for college. The federal government would encourage more innovation by colleges themselves, to prod them into finding more cost-effective models. Ideally, these reforms would feed into each other, with colleges facing pressure from better-informed consumers and competition from peers.

The most controversial element of Obama’s proposal is to create a metric measuring which colleges provide the best value. This has been a longtime goal of higher education reformers — the Washington Monthly, for instance, has published its own college rankings. Under Obama’s proposal, the U.S. Department of Education would craft such a measure by 2014 and then, after trying it out to ensure it works well enough, begin using it to prorate federal tuition subsidies by 2018. That is, students could get more generous loans for the most effective schools, and less-generous loans for the least effective. 2018 is far enough in the future that it might as well be “eventually,” but it matters in the sense that Obama is laying down a marker that a successor president can choose to hit if the first stage goes off as planned.

Photo: FOX

Obama likens higher-education policy to health-care policy, where his administration has devoted a lot of political capital toward changing the culture of medicine to prod doctors, hospitals, and insurers to focus on value. But the comparison raises the question of whether his higher-education agenda will repel Republicans just as his health-care agenda did. Finding ways to get the government to spend less on education sounds pretty conservative. On the other hand, so did finding ways to get the government to spend less money on health care, a goal Republicans now deem a socialistic nightmare so terrifying they are mulling which catastrophic hostage threat they should use to destroy it.

There are two explanations for Republican hostility to the conservative-seeming cost-control measures in the Affordable Care Act. One is ideological: Republicans mostly hate the goal of universal coverage, and since the cost-control provisions were attached to that, they convinced themselves it amounted to command and control rationing at best and death panels at worst. The other explanation is political: Health-care reform was Obama’s signature initiative, so Republicans had to oppose anything he favored.

Of course, the two theories can both be true, and surely to some extent both of them are. If you put more weight on the ideological explanation, then Obama’s higher-education agenda stands a chance of attracting Republican support. Republicans might even take some visceral pleasure in making their cultural enemies in the academy squeal. If you put more weight on the political explanation, then Republicans will convince themselves that Obama’s plan is evil no matter what. Republicans will find themselves believing that free-market principles require that whatever money the government spends on college access must have absolutely no conditions attached.

However the GOP responds, the contours of the higher-education debate have now taken a different shape.

Obama Goes Back to School