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Rick Hess Straight Up

Education policy maven Rick Hess of the American Enterprise Institute think tank offers straight talk on matters of policy, politics, research, and reform. Read more from this blog.

College & Workforce Readiness Opinion

How to Make College More Affordable? Try the Charter School Model

By Rick Hess — July 18, 2022 6 min read
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For those looking at college as a path to a career rather than a four-year pit stop, the lack of inexpensive, speedy options is a big problem. For huge numbers of high schoolers, it can be a deal breaker. Moreover, unlike in K-12, the higher ed. accreditation system makes it tough for charter like providers to get started. Well, College101 is a new organization that’s taking a hard look at accreditation’s emphasis on inputs and exploring how to create opportunities for new colleges to emerge. The bet is that a focus on outcomes will offer students better and more affordable options. Stig Leschly, senior lecturer at Harvard Business School and former head of the Newark Charter School Fund, is CEO of College 101. I recently chatted with him about College101 and what it means for American education.

—Rick

Rick: So tell me about College101. What’s the big idea?

Stig: The big idea at College101 is that to improve the higher education system, there must be a better pathway for new colleges to enter the college sector and challenge the status quo. There needs to be an entry process for startup colleges that mobilizes them to innovate on cost and quality and that strictly monitors them for their results in return for access to public aid.

Rick: What’s the problem you’ve set out to solve?

Stig: U.S. colleges are overpriced: Prices have grown ahead of inflation almost every year for the last half century. They are underdelivering: Graduation rates and short-term earnings outcomes in colleges are abysmal in many cases—particularly ones that serve low-income students and students of color. And they are unchanging in their designs. Most colleges are structurally prohibited from true innovation because they are stuck with fixed costs, have no discretionary cash to invest in new models, and are governed by profoundly change-averse and self-preserving faculty groups. The U.S. college sector is teetering toward crisis. The sector, and millions of college students, desperately need innovation, disruption, and competition from new colleges started by social entrepreneurs and nonprofit organizations with experience in education and workforce development.

Rick: A lot of readers may not be familiar with accreditation. Why does it matter?

Stig: College accreditors are trade associations run and paid for by incumbent colleges. They wield enormous power because being accredited is a requirement for any college that wants to access public aid for colleges. As they function currently, accreditors help maintain U.S. higher education as a sort of publicly financed cartel. There is a fixed set of long-standing colleges which egregiously overcharge, underperform, and shun change but have unique access to extraordinary sums of state and federal higher education aid without accountability from accreditors or public agencies and without the productive pressures of new entrants. Accreditation in its current form began with the passage of the Higher Education Act some 60 years ago when Congress—probably without imagining the self-dealing that would arise—anointed accreditors as the gatekeepers of public aid for colleges and as the filter through which all new colleges would need to pass.

Rick: So, how will College101 actually change that?

Stig: We are producing research which shows that new college models and new actors in accreditation are needed for real reform. We have two reports—one that looks at how accreditors don’t take action based on college outcomes and another one that looks at how few accreditors approve new colleges. We are also particularly interested in helping to incubate new accreditors that develop expertise in approving and monitoring startup colleges and holding them accountable for outcomes. There are long-standing regulations for how to set up a new accreditor, and the U.S. Department of Education has, at various points, invited new parties to enter the accreditation space.

Rick: You’ve just completed an intriguing study of college accreditation. What did you find?

Stig: We examined the oversight activity of U.S. college accreditors over the last decade and found that accreditors do almost nothing to discipline colleges for poor student outcomes or for low-quality academic designs that might, for example, lack a thorough curriculum. In fact, of actions taken by the seven accreditors that oversee the colleges that enroll 95 percent of students, only 1 percent of the actions taken were ones that disciplined colleges for low-grade academic designs or student outcomes. That is astonishing. Accreditors essentially sidestep their responsibility of oversight. Accreditors also maintain procedures that make it almost impossible for new colleges to earn accreditation. In short, accreditors work for colleges, and in doing so, predictably refrain from scrutinizing colleges’ academic results or designs and from approving new colleges that might bring change and improvement to the sector.

Rick: You’ve talked about importing some of the lessons from the charter school model to fix higher ed. How will that work?

Stig: Unlike the K-12 sector, U.S. higher education is significantly “voucherized.” So much of public finance in the higher education space takes the form of student-controlled and student-directed Pell grants and federal loans. Student choice is alive and well in higher education and generously financed from D.C. As a result, if students are given new and better options—ones that cost less, meet their day-to-day needs for flexibility on when and how they learn, and result in clear improvement in their future earnings and career prospects—then they will shift quickly to those new college designs. I am immensely optimistic that new designs will emerge when they see a predictable path through accreditation. Many of these social entrepreneurs are veterans of charter schools, working in education, workforce-related nonprofits, or sitting administrators in existing colleges who want to design a college from scratch. I am also convinced that philanthropy will underwrite new colleges generously. In short, I predict that if the accreditation barriers to the formation of new colleges can be lowered, human and philanthropic capital will mobilize.

Rick: What are some of the challenges of making this work?

Stig: One challenge is convincing higher education policymakers and issue advocates on both the left and the right that tightly regulated college startups are vital to improving higher education and that accreditation change is needed to make new college formation possible. Most policy talk in higher education takes for granted the current lineup of colleges and proceeds to ponder about some “next phase” of accountability and subsidy policy. Of course, new and better ways of funding and holding colleges accountable are worth pursuing, but they are fundamentally limited in their impact since they do nothing to introduce new actors with new ideas into the sector. Another challenge is the technical and political work of introducing new accreditation models because of how deeply regulated and protected the accreditation space is. Our hope is that some subset of current accreditors, and perhaps a few newly minted accreditors, will take the lead on approving startup colleges and on holding them accountable to outcomes, notably the short-term earnings outcomes of students, in exchange for access to public funding.

This interview has been edited and condensed for clarity.

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The opinions expressed in Rick Hess Straight Up are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.

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