Why Kevin Carey is (mostly) wrong about merit aid

Kevin Carey is one of the smartest and most eloquent education analysts in the United States. He is also mostly wrong about the uses of merit aid.

Carey's recent Chronicle of Higher Education piece, "Too Much "Merit" Aid Requires No Merit," argues that a significant amount of merit aid (institutional scholarships based on academic performance) is given to students whose academic record does not merit it.  In giving such aid to the "stupid sons of the rich" (here Carey is quoting Harvard's turn-of-the-20th century president Charles W. Eliot) higher education both forces taxpayers to subsidize other students more heavily than it otherwise would and debases the meaning of the word "merit."

His article is wrapped around an anecdote about the son of friend.  The parents were intelligent and rich; the son shared his parents wealth but not their academic prowess.  Nonetheless, he was admitted to several decent private colleges, two of whom offered him a merit scholarship--in Carey's telling in order to entice his wealthy family to pay the rest of the $50,000 annual bill. The parents were incredulous, the father telling Carey, "He's never gotten a 'merit' anything before...He's not a very good student."

It is true that there are students at many institutions like the student in this story, who were indifferent academically but still qualified for merit aid. And it is true that giving such scholarships to the children of the wealthy somehow seems, well, wrong.  It is, in my experience, rarely the case that such a scholarship is given to a student only because s/he is from a rich family, though. And it is also true that the alternatives to awarding merit aid in this way are not much better, either for students or for the institution.

Think about the three pricing models that private colleges use to attract students.  In the first, the college prices tuition at what it costs to educate the student and offers almost no scholarships. In the second, the college prices tuition at roughly what the market will bear, but then provides institutional aid (almost entirely in the form of a discount) based on family need.  In the third, the college again chooses a market price, but then provides institutional aid (again, as discount) based on merit.  What happens for students and for the school?

In model one, schooling is largely available to students of middle and upper-middle class families who can afford the $15K+  that it costs to cover the costs of education.  The student body is thus from roughly the same economic strata, but of varying levels of academic preparation. Will the school be able to enroll enough  students to keep the doors open?  Only if its reputation is strong enough, its quality high enough, or its costs low enough to generate demand.  Otherwise, students have no reason to choose the school.

In model two, schooling is largely available  either to wealthy students who aren't academically strong enough to go somewhere else, or to students with significant enough need, met by need-based aid, that the cost of attending becomes affordable. Again, academic preparation varies widely, but so does the economic well-being of families.  And again, the school will struggle to enroll enough students, unless it has very generous donors whose gifts offset discount, or its reputation is so distinctive that it can attract both of its potential main audiences.

In model three, schooling is available to students with a relatively narrow range of academic preparation (those whose grades qualify them for merit under the school's criteria), and with a relatively narrow economic range as well.  The school will attract students who can afford it, who are attracted to its message, and who may be enticed by a reward for their prior academic performance.

None of these models is inherently better than another.  Schools choose them based on a mixture of their position in the marketplace, their mission, and their view of the social ends of education.

In practice, no school uses one of these pure models.  Most use a mix of models 2 and 3, supplemented by federal or state aid.  In the case of Westminster College, for example, applicants with an ACT score above 21 and a high school GPA above 3.0 earn merit scholarships. Scholarship amounts and ranges are posted publicly. Very few students below that range come to Westminster.  But at each merit scholarship level, students are also evaluated for need-based aid, some from the college, and some in the form of federal loans and Pell grants.  It is the case, therefore, that attending Westminster is actually less expensive for a student with financial need than for a student with a comparable academic background from a more prosperous family.  It is also less expensive for a student with a strong academic background, regardless of his/her economic situation, than it is for a student with a weaker academic record but the same economic profile.

These results--that the cost of school is less for needier families than richer ones, less for strong students than weak ones, and  least for needy, bright students--are defensible on social and educational grounds. But for a school that accepts these results, there are several implications. For enrollment managers, the biggest challenge is balancing the number of prosperous and less-prosperous students, and the number of academically strong and less strong students, so that the institution earns enough revenue to stay open and meet its goals of maintaining access to a quality education.

I have written critically of this practice, known as financial aid leveraging, because it makes price opaque to students and because it may not be well-founded in human psychology. It can cause academic problems as well, since the range of academic preparation can (though needn't necessarily) vary widely at leveraged schools. (That can also be the case at schools that hardly leverage at all). Further, students who are among the weakest academically at any institution are less likely to be retained.  But so are students who are needier, so leveraging is no guarantee of college success.  And for someone like Carey who is looking at higher ed as a whole, the practice raises questions about the quality of the system, since because different schools attract different pools of potential applicants, a student with a 1000 on the SAT may get merit aid at one college, but nothing at another.

Kevin Carey decries financial aid leveraging also when he criticizes institutions for giving merit aid to "the stupid sons of the rich." But Carey is wrong about schools' motivation for giving merit aid to wealthy underachievers. Schools don't do it because they want to enroll more stupid sons of the rich.  We do it to enroll more bright daughters of the poor.  That goal may be worth a few thousand dollars of merit aid to a "stupid son", even for a kid whose parents don't think he deserves it.

Why the liberal arts are the future of graduate education

 Whether the concern is access, or price, or quality, or innovation, the overwhelming focus of public discussion of higher education in the United States is undergraduate education, and the overwhelming tone is one of despair.

At exactly the same time, though, critiques of graduate education suggest that it is undergraduate education, and particularly the liberal arts, that hold out promise for the future of higher education.  Here is what I mean.

In the United States, the curricula of most graduate programs reside entirely within the sponsoring department.  So, with the exception of a course here or there, if you determine to get a master's degree in, say, history, you will take only courses in history and its close cognates.  The history department will manage your registration, advise you, teach you everything it thinks you should know, and evaluate you.

Curricular trends in graduate study point ever more strongly towards this model of departmental domination.  One of the things undermining the strength of MBA programs, for example, is the emergence of master's programs in accounting, finance, real estate, human resources, etc.  This is an expensive model, one that relies on large cadres of specialized faculty, working closely with very small numbers of highly specialized students to achieve specialized learning outcomes.

The irony, of course, is that while the curricula become more independent and costly, criticism of graduate education suggests that the strong technical skills of graduates (finance graduates excel at financial modeling, for example) is undermined by the inability of graduates to communicate well, teach effectively, solve problems, and behave ethically.  In the undergraduate curriculum students develop these skills in the liberal arts.

That this is the case points to a different model for graduate study--one that improves student skills and   maintains their disciplinary excellence.  The model is to create a graduate-level liberal arts curriculum, where students from all graduate disciplines work through a program that drives them to develop competency in communication, teaching, problem-solving, and moral behavior.  Such a model integrates some portion of the graduate curriculum, so that students in several disciplines share courses.  And it allows the disciplines to focus more directly on their areas of specialty.

There are plenty of reasons to wonder about a graduate level liberal education could succeed.  Accreditors would need to change their expectations about faculty qualification and curricular content. Potential students would need to revise their views about what graduate school is about.  And liberal arts faculty would need to figure out what graduate-level training outside their disciplines would look like.  But the benefits to institutions (more efficiency, more integration, more alignment of the work done at the undergraduate and graduate levels, the opportunity to offer more graduate degrees that offer differentiated degrees but a common mission) and to students (better learning, more success at work, clearer path towards the degree) suggest that such changes are worth considering.

What kind of business is enrollment management?

Until recently, one of the most consistent complaints about American higher education was that it had become too much like a business. (Ironically, now the louder complaint, coming from a different source to be sure, is that colleges and universities are not enough like a business, spending time as they do on things besides job training.)

The debate about whether higher education should or should not be like a business obscures a smaller but important question--what sort of business discipline should the components of a college be like?

While someone who knows more about the business office and fundraising operations of a college could write something brilliant about whether those offices should be more about accounting, finance, or entrepreneurship, I would like to touch on a question in my area: What kind of business is enrollment management?

This question matters because over the past twenty years, enrollment management has become a marketing discipline.  By this I mean that its key foci (pricing, branding, messaging, advertising) fall within marketing as a discipline, and that the obsessions of marketing (novelty, agility, cleverness, persuasion, differentiation, growth) have become the core obsessions of enrollment management.

Those obsessions seem to work best in a growth market, one where many additional consumers are looking to buy a product and are making decisions about the purchase based on marketing questions (How much will it cost me? How will it make me feel?  Is the product glamorous or prestigious? Do its ads and sales pitches speak to me?).  In this landscape, enrollment management teams can improve and expand marketing and thereby expect ever better results.

It may be that we don't live in that landscape any more.  Students are increasingly skeptical of traditional marketing tactics, and parents are dubious about the prices being charged for education.  Schools with a powerful brand can still rely on that brand, but the down economy and skepticism about the value of regular higher ed suggest that marketing tactics may not enroll students the way they used to.

So if enrollment management is becoming less like marketing, is there a business discipline whose insights are more helpful?

I would put my money on supply chain management as the disciplinary future of enrollment management. (Thanks to Dr. Brian Levin-Stankevich for making an off-handed remark that sparked my thinking on this.)

Supply chain management argues that it is not marketing, but instead creating value through the entire supply chain that leads to a product's success.  Further, it argues that relationships and customer service are more powerful than messaging and advertising in ensuring satisfaction.

In a supply chain model of enrollment management, admissions offices would think of establishing supply chains of students rather than increasing the number of prospects.  These supply chains--in schools, churches, non-profits, employers, would be in relationship with the college, and would be tasked with selecting the best supply of students for the particular college.  They would be fully empowered to make that decision--given control over a scholarship budget and admissions decisions.  Their work would be evaluated on outcomes--if students succeed in college, the suppliers would continue to get rewards.  If not, then the college would seek out new suppliers.

In turn colleges and universities would go out of their way to build, strengthen, and satisfy their suppliers, since there are many competitors for the supply chains.

Describing access to college in this language sounds, well, business-like.  But looked at another way it is an effort to solidify relationships that ought to be strong, but instead are weak in American society.  Would high school counselors know their students better if they were actually responsible for getting them into college?  Would high school and college curricula align better if there were real incentives to the high school to have its graduates succeed at particular colleges? Would freshmen be more likely to be retained if they attended a college where many of their older classmates attended? Would communities be healthier, and colleges more focused, if their supply of students depended on maintaining good relations with other institutions?

The answer to all of these questions is yes.  And if we could respond to all of them positively, we could be sure, too, that both students and society would be benefiting from the power of a meaningful college education.

Third phase civic engagement and the mission of American higher education

Let me argue that we have entered a third phase of campus civic engagement, one which most campuses are unprepared to face.

Though nearly every type of college or university in the US was born with a civic mission, by the late 1950s, many had abandoned that mission for narrower, more private ones.

Phase one civic engagement emerged with the campus-based rebellions of the late 60s and early 70s.  It grew out of a critique of the higher education of the 1950s. That critique argued that colleges and universities were irrelevant unless they escaped the thrall of the powerful and reactionary. Instead, they should be sources for the creation of a just, egalitarian society. Though phase one grew out of student rebellion, its main supporters were faculty, who through the 70s and 80s built the intellectual apparatus that supports civic engagement--fields of research dedicated to understanding and overturning oppression and pedagogy that favors active or experiential learning.

Phase two adopted the pedagogy and theory of phase one, and adapted it to the civic landscape of the late 80s and 90s.  Its thrust was institutional, and its goal was to build an infrastructure--centers, journals, conferences, and organizations--to embed service-learning and civic engagement into the life of the college.  If phase one had been built on faculty members' desires to bring about radical change in politics, phase two grew out of staff and administrator desires to change students, who in the narrative of phase two civic engagement tended to be traditional full-time students who were disengaged from civic life and from learning.  Service-learning thus became a tool to get students engage in learning by engaging in the community.  Community leaders, who might have blanched at the theoretical radicalism of phase one, found phase two to be wonderful--a source of volunteers, project-doers, supporters of non-profits, and future interns, employees, and citizens.

Most campuses continue to practice a blend of phase one and phase two civic engagement.  Faculty continue to push civic engagement as a tool for political change, staff and administrators continue to see civic engagement as a tool for learning through community-building, and the apparatus that supports these efforts continues.

But while campuses have settled in, students have changed radically.  The proportion of traditional college students--full-time 18-24 year olds living on or near campus and away from their families--is in decline.  So, too, is support for traditional approaches to higher education--approaches which seem to cost too much and lead to too few graduates.  In their place is emerging a new civic context which colleges and universities ought to attend.  Among the characteristics of the new civic context that matter for higher ed are the following:

• Student demographics have changed radically.  There are more students of color, more low-income students, more first-generation students, more returning students--in short, more "non-traditional" students than ever before.
• These students are not disengaged from "the community" to use the language of phase two civic engagement.  Instead, they have never left the community.  Many live at home, and work, and have families, and maintain powerful civic and community commitments.
• These students do not have the time or habits of using phase two's infrastructures.  They are often on campus long after the Center for Civic Engagement has closed, or they are rushing from class to work, without time to stop at the service project.  In fact, group work, partnership building, and the rest of the pedagogical apparatus of active learning is a headache for them because they do not own their time. Learning takes place online as much as in the classroom, and reflection is a natural habit, one supported by facebook, instagram, tumblr, and twitter.
• These students are impatient with the radical politics of phase one, and with the traditional civic engagement efforts of phase two.  The distinctions between school, work, community, and family life don't work for them, since those things do not fall into neat silos in their day-to-day lives.
• Instead, today's students are pragmatic.  They will join coalitions with anyone.  They are all leaders comfortable in leaderless efforts.  They favor social entrepreneurship over traditional non-profit work, and boycotts, protests, petitions, marches, and occupations over voting and political parties.

If I am at all right about the third phase, then colleges and universities have some important questions to ask themselves.  Our tendency will be to jump to the practical ones--How should we use twitter in civic engagement?  Should we keep the Center for Civic Engagement open later?  How can we engage this new demographic of students?

But the more important question is not practical, and it does not have to do with students, but with institutional mission.  If students are richly engaged in communities and only sporadically engaged in college life, and if this trend will continue into the future, how can colleges and universities make use of those changes to fulfill their own civic missions?

Does competency-based education shorten time to graduation?

Over at The Quick and the Ed, Mandy Zatynski reports on a hearing of the House Education and Workforce subcommittee about the cost-effectiveness of higher education.  There, she reports that Teresa Lubbers, Indiana's Commissioner of Higher Ed testified that competency-based education, particularly of the sort offered at Western Governor's University, shortens the time to graduation.

I am a fan of competency-based education. Westminster offers three degree programs, a Bachelor's of Business Administration, an MBA, and a soon-to-be Masters in Strategic Communication, that are all competency-based.  Student learning in these programs is phenomenal.  Students feel like they have learned deeply, and that what they learned is more relevant to their lives than what they would have learned in the traditional classroom. And where we have been able to measure learning outcomes side-by-side with traditional programs, students in our competency-based program learn at least as much as students in our traditional programs. But these programs do not, by their nature, lead students to graduate more quickly.  


The same is true for Western Governor's University.  Their IPEDS data is quite clear on this point. Only 18% of students who entered in 2005-2006 had graduated in six years, and only 25% had transferred elsewhere.  No matter how you look at it, at WGU, competency-based education  does not lead to quicker graduation, regardless of what Teresa Lubbers says.


This isn't surprising, given the students who enroll at WGU.  All courses are taught on-line, and most students are non-traditional.  Many stop and start, or take more time to complete classes because of work, family, etc.  This is WGU's market, and based on the students I know who attend there, the approach to learning matches their lives.


The take home is simple.  WGU fills a niche.  Their academic programs are well-designed; their organizational structure innovative.  But if you want to improve time-to-graduation, you've got to look elsewhere.

Why legibility is better than transparency

In the political sphere, transparency is a hallmark on democracy.  But in education, transparency, or making all possible information available to all possible users, confuses as often as it helps. For students legibility, or making it  possible for them to read where they are and where they go next, is more valuable than transparency.

Consider these hallmarks of educational transparency--the campus map, the course catalog, and the tuition and fees list.  Colleges and universities place maps showing all buildings on their websites and at key points on campus.  But students, parents, and visitors are constantly lost.  Why? Because the map provides too much information.  No one really needs to know where all buildings on campus are located.  Instead, they need to know how to get from where they are to where they are going, something that maps do only with difficulty.

Similarly, the course catalog aims to encapsulate all information about a campus' curriculum and graduation requirements.  But students consistently make poor choices, misunderstand policy, and emerge from the catalog more confused than less.

And tuition and fees lists aim to make students and their families aware of all potential costs of attending an institution.  But those tables are generally ignored, in lieu of parents asking a straight-up question--"How much will it cost to attend your school."  To that question we have few good answers, since costs of attendance are variable and odd, given the way that schools rarely charge round figures for anything.

Forbes journalist Patrick Spenner gets it right in his recent blog post, "Forget Engagement, Consumers Want Simplicity." There, he argues that marketers who aim to engage potential customers in too many ways--social media, frequent campaigns, personal contacts--instead trip them up.  I find this increasingly true in student recruitment, where improved marketing tools allow us to contact prospective students dozens of times over the three years prior to enrolling as freshmen.  Some students love the attention, but most ignore much of the interaction, or worse, disconnect early in the process.  (Enrollment managers talk increasingly of stealth applicants--students who apply to the college without us knowing about them.  But the truth is that there are few stealth applicants.  There are instead students who were in the recruiting pool at the outset, but disconnected until they ultimately applied.  They are "simplicity seekers" not stealth applicants.)

The best example I've seen recently of legibility (or in Spenner's terms "simplicity") is at Utah Valley University.  At UVU, all major educational buildings are linked, so that you can walk indoors from one building to any other.  UVU has made huge improvements in helping students and visitors get around--not by posting more campus maps, but by simply posting signs hanging from the ceiling at any juncture between buildings.  Those signs include simple information--the name of the next buildings down any possible path, and an arrow showing which hallway to follow.  The boundaries between buildings are simply marked by the purpose of the building ("business' or "liberal arts" for example) being spelled out in the carpet.

Anyone can get around UVU's campus, then, if they simply know three things--that all buildings are connected, that you can find your way by reading signs, and the name of your final destination.

Not all campuses are designed the way UVU's is.  But you can take their principles of legibility and apply them elsewhere by building educational systems with three questions in mind:

1. What is the campus' approach to the educational experience?
2. Where are the critical junctures where signs need to be placed?
3. What is the student's end goal?

It is disappointing but not surprising that few campuses have simple and clear answers to these key questions.  Each school has all sorts of approaches to education--some majors are lockstep, others aren't, some require a thesis, others don't, some place students in internships, others don't.  We have too many critical junctures--between semesters, and years, and when changing majors, and all sorts of application deadlines.  And we aren't very good at knowing what a student wants to major in, let alone his/her overarching educational goals.  Given our complexity, we resort to putting all possible information out there, and hoping that students can find their ways or build a relationship with a wise mentor who will guide them through.  Or in other words, we default to transparency because our educational systems are illegible.

Why tuition-driven colleges are the future of higher education

To listen to the pundits, including such luminaries as Stanford President John Hennessy and Khan Academy founder Salman Khan, tuition-driven institutions of higher education are dying. In fact, in a recent Wall Street Journal interview, Hennessy said, "if you look at the vast majority of colleges in the U.S., there are way too many that are [dependent on tuition to fund their budgets]. That is not sustainable."

Let me respond.  Baloney.  In fact, it is increasingly likely that the only institutions of higher education that will survive in the future are tuition-driven, that is, schools where students pay roughly what it costs to educate them in order to get an education.  Tuition-driven schools have a pricing problem--by-and-large we have not found the equilibrium price between what a student wants to pay and what it costs to educate them.  Hennessy and Khan are correct that the use of technology might help us find that price. So might many other things, including greater specialization, clearer curricula, more straight-forward pricing, better loan options, competency-based education, and about a thousand other innovations already rolling out in higher education.

But schools like Stanford, and Khan Academy,  and your local public institution have much more than a pricing problem.  They have a business model problem.  Here is what I mean.  All three of those institutions have built business models that rely on massive and unpredictable sources of revenue to stay open.

Start with the clearest example--state institutions.  For several generations, the subsidy that states provided to state institutions, plus a moderate amount of tuition money, kept the doors of state institutions open.  But the amount of subsidy, at least in comparison to the cost of education, is in sharp decline. And it is tremendously unlikely that that subsidy will return in my lifetime.  So state schools are hunting for a new business model.  What are they turning to?  Tuition.

Consider Stanford and other highly selective research institutions, private and public.  These schools will likely survive long into the future.  But it is unlikely that they will survive as schools dedicated to educating students.  Already, in fact, the chance of enrolling at Stanford as an undergraduate is perishingly small, not because Stanford is incapable of educating more students, but because education isn't its business model.  Instead, its future depends on donations from alumni and wealthy fans, effective management of its endowment, and the ability to capture research contracts from the federal government and corporations.  That is, Stanford is a foundation, an investment firm, and an R&D contractor.  There are almost no existing schools who, not being in the Stanford  category already, are likely to be able to follow that business model in the future.

Finally, think about Khan Academy.  Its mission is to provide a "free world-class education to anyone anywhere."  Except, of course, that the education is not free.  Students simply do not pay for it.  Instead, the cost is borne by investors, and donors, and advertisers who hope that running ads on YouTube sites associated with Khan Academy will drive traffic to their businesses.  It may be that Khan Academy can survive and prosper with a business model reliant almost entirely on subsidies.  But I doubt that the future of higher education lies with such a model.

(Please note that I am not arguing that the waning of state subsidies for education is necessarily a good thing.  It indicates a weakening of our sense of common purpose, of the notion that I am better off when my neighbor is well and wise, and of the idea that communities in the United States protect their futures by educating their young. That weakening is sad indeed.)

Which returns us, again, to tuition as a model of educational funding.  There is a certain logic to paying tuition, since it aligns exactly with what we do elsewhere.  Buying a snowcone involves exchanging money for a product.  So does buying a shirt.  When purchases are very expensive (as with cars, health care, and houses), industries arise to help buyers manage costs and avoid shocks.  Variety of quality and services emerge so there is a continuum of options available to purchasers. And subsidies arise on the margins of the industry to help those who need the thing obtain it at a reasonable cost.

So I can imagine a future with a much greater range of prices (as opposed to quite inexpensive state institutions and quite expensive private institutions) and services in higher education.  And I can imagine a future where there are some state subsidies for some students.  But the thing I am most certain for is that more and more people will pay for their own educations.

The most important fact about the future of higher education

Many things will be true about higher education; only some of those things will be important. If your school is concerned about the future of higher education, it must both figure out what makes a fact important (in my book important facts are those that, if acted upon, have the potential to change the whole institution), and which important facts your school wants to focus on.

The most important fact about the future of higher education is this: all students will be transfer students.  By this I mean two things: first, that an increasing proportion of students will approach an institution bringing transcripted credits with them, and second, that even more students will bring expertise with them that they have learned outside traditional institutions, but which must be transferred into their new campus if that campus is to be true to the student's learning and aspirations.

Here are several ways in which the fact that all students will be transfer students will transform higher education:

1. Traditional measures of success for access, retention, and graduation, will become obsolete. If most students bring credit with them, there is no such thing as a "freshman class," retention will not be controllable (since students will move easily among several institutions), and four-year graduation rates will mean very little, since few campuses will provide the entirety of a student's education.
2. The idea of a curriculum will be unstable. Curricula rely on students taking courses in sequence, or at least in an order required by the institution.  But transfer students will not join an institution with the same academic backgrounds, and so therefore won't want (or shouldn't want) to take courses in sequence.  Curricula must look like networks, not lines, and learning must include opportunities to make meaning of learning outside of a standardized sequence of courses.
3. The freshman year will be less important.  For the past two decades colleges and universities have focused on improving the first-year and placing distinctive programs in it.  But given the increasing number of students coming with credit and knowledge of varying sorts, the first year will be much less important than the last year, presumably the only time when most students at an institution will be able to have a common experience.
4. The most important skills for faculty will be aggregation, meaning-making, and certification, not teaching, learning, research, or any other currently popular aspects of pedagogy. It will fall to faculty to work with students to help them aggregate their prior learning from a variety of institutions and sources, make meaning out of it, add to that store of knowledge, and then certify that that knowledge adds up to something that can be carried along.
5. Colleges and universities will specialize more than ever before. If students are transferring knowledge and credits from many sources, only those institutions with identifiable specialties will be able to stand out among standardized options.
6. The most important alliances between institutions will be among unlike, not like, institutions. Currently nearly every alliance--athletic conferences, consortia, lobbying groups, faculty development networks, etc.--are among similar institutions.  Westminster is part of the New American Colleges and Universities, a consortium of institutions of similar size and programming.  The University of Utah has just joined the Pac-12 to be with schools more like it. But in a transfer world, schools will want to ally themselves with a network of differing institutions in order to maximize learning for (and revenue from) students.  We will see more formal alliances between community colleges and liberal arts colleges, research universities and teaching institutions, so that within a network of schools a student can get all the learning s/he desires, and individual campuses can contribute specific things of value to the learning of particular students.

What auto loans can teach us about student loans

If you were a recent high school graduate, worked hard, got decent grades, and wanted to borrow $20,000, you could spend it on one of two things: a new car or a college education.  One of those choices is a much better investment than the other.  But while it is almost universally understood that a college education is more valuable than a new car, it is also the case that the means of getting that education--a student loan--is widely feared while the means of getting the car--an auto loan--carries no such stigma.

There are big cultural reasons why this is the case: the contradictory fears that a college education is essential for success in life and inadequate to ensure that success, for example, or the nonsensical political debates about  student loan interest rates.

But I am more interested in the practical reasons that auto loans are accepted and student loans feared, because colleges and universities can do something about those practical considerations.  Here are five characteristics of auto lending that might be suggestive for student lenders. The characteristics share one factor that ought to be on the mind of people working to fix student loans: auto loans give people power to act in ways they see fit.  Student loans, at key points in the college process, make it more difficult, not less, to act.

1. Markets in interest rates matter--I can borrow money to buy a new car at 2.94% from my local credit union.  Occasionally, manufacturers offer 0% interest.  If I had horrible credit, but was willing to follow a strict repayment plan I could still get a loan, albeit at a much higher interest rate.  In short, there is a market for auto loans dedicated to making it possible for all sorts of people to buy all sorts of cars.  There is no meaningful market for student loans--regardless of your background, career goals, or ability to pay, you pay rates set by a single lender, the federal government, and take out loans in amounts dictated by the federal government. (And because there is no real market for loans, the few private lenders in the business can set their rates even higher than the federal rates.) Markets, when they work correctly, empower people to make informed decisions.  The process of getting a student loan is disempowering--all the key factors are out of the buyer's hands--the rate, the amount borrowed, the source of the loan, its term of repayment.
2. The size of the loan and the desirability of the purchase coincide--A new car is most desirable when it is new, and so its worth aligns with the amount owed.  As the car ages and its value declines, so does the principal.  As with cars, a college education is most desirable when it is new, before the hard work, the disappointment, and the frustration of choosing a major, writing a thesis, and facing up to the hard factors of life weigh in.  But unlike an auto loan, a student loan's principal is highest when the thing purchased--a college education--is at its end--the moment when satisfaction is often the lowest.
3. It is the monthly payment that matters--When you take out an auto loan, the focus of the discussion is on the monthly payment.  This focus, of course, obscures the total cost of the loan.  But it also helps people budget, since they know that each month for the coming five years they have to pay that amount.  In student loans, the monthly payment is a moving target until after graduation.  That fact makes budgeting difficult and forces soon-to-be-graduates to make decisions about their futures in a context of uncertainty.
4. There is a secondary market for the loan and for the purchase--If you borrow to buy a car, and then decide that the car isn't for you, you can sell it. Selling the car allows you to either invest in another car or pay off your loan early.  Or, if you keep the car, other people can use it--brothers, sisters, friends.  But there are no secondary markets for college educations or student loans.  The loan you take out is yours.  You cannot share its amount with a family member.  Nor can a friend take classes paid for by your loan. So the social benefit of a student loan and a college education are blunted by the way the loan is constructed.
5. An auto loan buys a car; a student loan does not buy an education--You buy a car because you need a car.  The thing purchased is directly tied to the money borrowed.  But a student loan really buys time in the classroom, not learning or an education. There are no guarantees; you cannot return the education if it isn't working, or get it repaired under warranty. For this reason, if time in college does not lead to learning, the price of the loan seems out of alignment with the value of the thing purchased.

It is my sense, then, that if the government is going to reform student lending, or if student activists are going to take up the issue, that they look to the auto business, where loans align with desires, serve social purposes, come with clear information, and provide freedom to act.

Larry Summers' next step into education, or being wary of the 'world's best thinkers"

It turns out that Larry Summers' recent NYT editorial about the future of education was a quiet hint about his new educational venture, the Floating University. (I blogged about it here; thanks to Jules Evans' great blog The Politics of Well-Being for the heads-up about the Floating University.) Summers, Steven Pinker, and other denizens of the America's educational upper-class (modestly self-described as "the world's best thinkers") are launching a new online educational venture, based loosely on the "best course model" of education.

I have no way of knowing how good or durable this initiative will be.  The launch video reveals little about how FU will work, preferring to offer snippets of the world's best thinkers passing on nostrums about the great ideas and the value of breaking down disciplinary boundaries.  But let me offer two observations:

1. The notion of low-cost online learning has now followed a predictable trajectory, from the first people posting videos about how to play rock guitar through the optimistic period of open learning into an entrepreneurial phase, where people from powerful institutions are competing with innovators to see who controls the market.  While it remains to be seen how influential the Floating University will be, the fact that famous professors from Harvard, Yale, and the like have a venture out there may mean that the space is closing quickly for non-powerful innovators.

2. I have nothing against great thinkers starting schools, (and am in fact a huge fan of Alain de Botton's School of Life). But I will confess to being a bit bothered at the vanity of "the world's best thinkers" calling themselves such.  The Floating University's teachers are in fact wise and world-renowned.  But it is not  the case that their wisdom is needed nearly as much as they think.  What we know about effective teachers suggests that it is relationships between the teacher and the learner (or whatever else you want to call that relationship) that matters for the student's learning and for her development as a human being. So while learning economics from Larry Summers is undoubtedly a good thing, learning economics with a real human being is a better one. Attribute it to my Intermountain West upbringing and my state university PhD and my decentralist politics but when something is sold to me based on the presence of Harvard, Yale, Bard, and Columbia faculty I have to think it should be opposed on those grounds alone. In the same way that bio-diversity is a good thing in the non-human environment, geographic diversity is a good thing in the human environment.

 (Now if only Wendell Berry and Rebecca Solnit would start a school....)

The future(s) of religious higher education

I have an ongoing interest in the intersection between religion and higher education for many reasons that readers of this blog might have noted--I'm religious myself (or perhaps religiously confused might be more accurate), I'm convinced that some spiritual practices have great potential for secular higher education, and I'm beginning to suspect that faith-based institutions do a much better job on institutional vision and the development of students than their secular counterparts do.

To these reasons let me add one more:  that current and historic practices in the creation of churches might provide some insights into ways to respond to challenges facing higher education.

Carol Howard Merritt's post "Ten Church Models for a New Generation" neatly summarizes emerging practices among people wanting Christian churches to flourish.  There are five themes that run through them.

• First, the church, like higher education, has moved away from the needs of its congregants, either by succumbing to the temptations of largeness and prominence or by remaining complacent while the world changes around it.  
• Second, that successful innovations are coming in small settings, where the trappings of religion--big buildings, formal worship services--are less important than building a sense of common purpose among those who are participating.  
• Third, that these new forms of congregations have, in many instances, developed new funding models as well, where the congregation is funded by proceeds from a coffee shop, say, or where the pastor is an entrepreneur.
• Fourth, these newly successful congregations emerge from the efforts of a few people who plant a new congregation and nurture it while it grows into something sustainable.
• Fifth, while in some new versions technology plays a central role, in most technology is secondary to the broader mission of the organization.

In this list one can see suggestions for institutions of higher education.  Particularly intriguing to me is the possibility of college-planting, where institutions of higher education select a couple of people to open what is essentially a store-front version of the home institution, dedicated to the particular needs of the people  who live nearby.  In a higher education landscape where even small colleges have hundreds of students, and where campuses are nearly always set off from their surroundings, store-front schools would be a place both to reach new participants, to innovate in education, and to build the sorts of relationships between learners and teachers that result in powerful learning.

Given that the trends that Merritt summarizes are emerging from the church, it may be that church-affiliated institutions are the first to move in the direction of small, emergent colleges.  But no school should overlook the potential of emergent churches to suggest ways to reach new communities of learners, explore new models of revenue, and reinvigorate the human relationships (and the understanding of those relationships) that were once at the core of what it meant to be an educated person.

Can you innovate and focus at the same time?

You can't bump into an education sage or a political pundit without hearing that the United States needs to be more innovative.  Steve Jobs was hailed as a heroic innovator at his death, Arne Duncan is calling for innovation in fixing college costs, Colorado's Governor John Hickenlooper has created an innovation initiative, and President Obama has argued that America must innovate its way out of our economic doldrums.

Institutions of higher education are particularly susceptible to the innovation argument, because they are under fire for being irrelevant, because they are the major location for research in the American economy, and because they have an overwhelming desire to distinguish themselves from each other.  But there are at least four major concerns with pushing innovation as a major value in education.

1. Confusion--though colleges and universities talk about innovation--renewing an older thing to make it better and more meaningful--they often are hoping for invention--the creation of something almost entirely new.  The conflation of innovation and invention means that small innovations often lack the appeal and funding they would need to get established, while big sparkly new things get the go-ahead on the basis of their inventiveness.
2. Integration--as my colleague Ian Symmonds has pointed out, without integration, innovations will lose their luster, remain isolated,and eventually wither rather than change the institution.  But unless institutions are purposeful about integration, it doesn't happen. 
3. Leadership--Often innovation is associated with a leader (think Steve Jobs again) rather than an institution or a set of processes.  But as with other large institutions, higher education leaders come and go.  If innovations are tied to them, or sparked largely in their offices, the spirit of innovation may leave with them, or take on their own idiosyncrasies.
4. Focus--At the same time that schools are being called on to innovate, quieter voices are calling on them to focus.  There is logic in this call, since without focus, many schools on limited budgets will fail to allocate resources wisely or pursue risky new activities to their detriment.  And in a crowded market, institutions that lack focus will get lost. Unfortunately, higher ed loves the lack of focus (we even have a name for it--the university).  But as Jim Collins argues in How the Mighty Fall, lack of focus is one of the major sins that lead healthy organizations to collapse.

Can organizations innovate and focus at the same time?  Of course they can, but to do so, they have to have a particular sort of innovation discipline.  The sources of innovation--those institutions, ideas, passions, practices that the institution will apply to a new context--have to be focused as well.

Here is what I mean.  Innovation is essentially taking something old and reworking it to be something new.  If an institution goes to the same few sources as birthplaces of its innovations, it can count on the innovations having at least some focus at the end.  So if a religious university wants to innovate it should comb the memories, writings, speeches, and histories of its religious tradition, looking for some idea that is analogous to the current situation.  If a teaching college wants to innovate and focus it needs to go back to the same well again and again--the same philosophers of education, say, or the same peer institutions, or the same sort of pedagogy.

Here Apple and Steve Jobs are instructive.  They have few products, all with the same look, feel, and appeal.  They have been innovative to be sure, but their focus is even more impressive.  Few colleges and universities have that same sort of limited product line and common design.  Instead they work incessantly on creating a brand--a logo, a color scheme, a tagline--to somehow make it seem like their sprawling programs and new initiatives feel like they come from the same place.  Most brands cannot live up to that task.

Pop-up colleges

For at least the past seven years, retailers and restaurants have been attracted to the pop-up store model. Pop-up, or flash shops allow shop owners to try out new merchandise, new locations, or new designs.  And since they are cheap to create and temporary by nature, they allow for experimentation in a way that a traditional store would not.

In the meantime, most colleges and universities continue to offer academic programs in much the same way they have in the past.  This is not, by definition, a bad thing.  But the difficulty of radically overhauling an academic program, getting rid of one that no longer has a market, or starting a new one in rapid response to student demand puts colleges and universities consistently behind demand for new programs.  In the past this misalignment was not tremendously damaging for higher education because there were no external competitors.  But with the availability of free instruction and cutting-edge content on the internet, colleges and universities face the prospect of losing out on the intellectual leadership in new fields.

So why not create a pop-up college--a school composed of teams of faculty who create new academic programs, recruit students, run two or three cohorts through the program with the plan to close it down after, say, five cohorts, and then take a year off to develop a new program and another to recruit new cohorts into it.

The financial model would require that the school save enough money over the life of a cohort to survive two years without income from the particular faculty team.  The academic model would require faculty to be generalists and learning facilitators, not primarily disciplinary specialists.  The programs would have to be deliverable in generic spaces, not spaces that require a particular design. Accreditation would be tough. But the downsides from these criteria would be offset by the possibility for innovation, deep learning, and meaningful collaboration among faculty.

I am not suggesting that all (or even many) colleges and universities ought to pursue pop-up education.  But I  expect that faculty who get it right could create a new school that delivered high quality learning at reasonable cost and innovated in design, delivery, and administration of the school.

The perils of prestige

This article, in the Washington Monthly's outstanding College Guide, tells the story of George Washington University's rise from an affordable private university in a dreary DC neighborhood to one of the most expensive universities in the United States.

GW's story is one that gets played out in smaller degree on campuses across the US.  In order to attract more students, colleges and universities build new buildings, form new teams, hire more faculty, and mimic the goals and cultures of the richest, most prestigious campuses in the US.  The result is, on the one hand, rising prestige, and on the other, rising costs.

There are all sorts of reasons to wonder about the wisdom of a prestige-focused path to institutional success.  Most of them are obvious--there isn't a bottomless pool of families able to afford such schooling, and moves towards prestige don't necessarily lead to better learning are two of the most compelling.

But a third is equally important--in nearly every instance, colleges and universities on the prestige track give up focus and mission for prominence.  (The story about GW is full of such losses of focus.)  This need not be the case, of course.  A campus could seek prominence by offloading all programs that are unlikely to attract attention, or by getting rid of all departments that are unlikely to become nationally prominent. 

That schools do not seek prominence through focus teaches us a couple of things about American higher education.  First, the pursuit of prestige is really a form of hedging bets, of trying out lots of things in the hope that some will be successful.  Second, while apologists for higher ed in the US like to point out the "diversity" of institution types, there is really only one that matters for prestige--the research university.  You can have big ones or small ones, but if you want a prestigious campus you need new buildings, a wide range of programs, faculty who publish a lot, and outcomes that are as much about prominence in and connection to the world of wealth as they are about learning.

That world of wealth and prominence is in key ways a zero-sum game--only so many people get to play. And so the prestige path is likely to be a winner for a few campuses and a loser for lots more.  But without alternative models of success in higher ed, colleges and university leaders anxious to improve the lot of their schools will struggle to propose something other than the things that George Washington University has done so well.

Colleges without administrators; colleges without faculty

We are at a funny time in the history of higher education, where our current conditions--high cost, uncertainty about the depth and breadth of student learning, very complex institutions, unrest about traditional roles, and new technologies--might push higher ed in two opposite directions at the same time.

In one direction, we might see more "colleges" created and run solely by faculty. These would be small institutions, with limited curricula, and teaching much more on the model of mentorship or apprenticeship that flourished earlier in the history of higher ed (think Oxford, or even earlier, think Socrates). If one of these colleges ever got too large, faculty could just form a new one, perhaps using the model of growth favored by WL Gore and Associates, where if a factory or work group has over 120 employees, then a new one forms.

In the other direction, you can imagine institutions of higher learning where the traditional faculty no longer exists. Instead, you have a team of educators--some who design content, others pedagogy, others assessment, and others still who coach students who together ensure the delivery of courses and the assessment of student learning. Here it would be like taking the model of Western Governor's University to its furthest end.

Given that each of these options seem viable (setting aside the problem of accreditation for a minute) which do you suppose is more likely to flourish? To lead to student learning? Do these two possibilities suggest anything about the particular ills of higher ed and the solutions to them?

Can universities and cities learn from each other?

Late last week I talked with someone from an organization dedicated to improving higher ed completion rates by working with state policy makers and large institutions. She remarked at how hard it is to get big institutions to change (and of course that while it is easier to get little institutions to change, the impact is, well, smaller).

Her comment got me thinking about the size of universities. In Utah, the University of Utah, Salt Lake Community College, Utah State, BYU, or Utah Valley University are all the size of municipalities. And, they have a lot of the components of cities--governments (of a sort), police, food systems, power systems, etc. So what if we thought about universities as (good) cities? Would learning be better? Would students be more satisfied? Would change come about easier? Under what conditions?

I'm not sure I have answers to these questions, but two great books about cities: Jane Jacobs, The Death and Life of Great American Cities, and Steven Johnson, Emergence both convince me that healthy cities create learning by their nature, and that their nature requires a great deal less formal control than do universities. So is it possible to get to the learning outcomes of higher ed, and have students have the experiences that lead them there, by taking cues from decentralized, self-emerging systems like cities?

Beyond models?

At a meeting today my friend and colleague Peter Ingle argued that in such a rapidly changing educational environment, finding a "model" for an innovation on campus might be too slow. We talk about models all of the time in HE. When we do so we usually mean that we are seeking someone who does pretty much what we want to do so we can copy it. Peter's notion is that by the time you find, copy, tweak, and approve a model, it may no longer apply to the situation.

I like Peter's notion a lot (in an earlier post on scale I wondered about a similar problem--"scaling up" small programs). He suggested that colleges need to do a lot to streamline decision-making and implementation processes. True!

He got me wondering what might take the place of the thirst for models though. What could provide a framework for change, without being as slow at the beginning as models. Here are a few options:

• Guiding questions--what if a campus decided that there were a few questions that it wanted its work to respond to? The focus would then become--does this new thing respond to our questions, not, is there a model for this problem?
• Metaphors--an acquaintance at Naropa University once told me that their curriculum was organized around the metaphor of breathing--first year, breathe in, second year breathe out, etc. Are there other metaphors that could provide guidance for new ideas on a campus?
• Stories--Could a campus have a few stories that served as guideposts for innovation? Could a standard for new ideas be that they must match and extend the story? Sounds far-fetched, but there is lots of evidence that humans are story-making creatures, and narratives are now key components of disciplines as diverse as nursing, psychology, organizational behavior, and theology.

I know these things aren't solutions to the problem of responding to rapid change in a way that remains true to educational mission, but they might be the beginnings of a response...