With skyrocketing college costs and dwindling state budgets, how should the United States produce more college graduates? Education research fellow Andrew P. Kelly of the American Enterprise Institute (AEI) and Kevin Carey of the New America Foundation have commissioned eleven new studies that explore ways to cut higher education costs. The papers also examine the implications that cutting costs would have on state and federal higher education policies.
Fact: The cost of college has increased by more than 400 percent in the last 25 years, yet the current administration has set a goal for the United States to regain the highest proportion of college graduates in the world by 2020. Growing student loan debt, which is now over $1 trillion, and dwindling state budgets are also major concerns. In order for higher education to account for significant new demographic and technological changes, state and federal policies will need to adapt.
What can we do?
- Contain costs: Make cost containment a central tenet of existing institutions by emphasizing responsible debt financing, prioritizing faculty’s teaching duties over research, and leveraging the expertise of external business consultants to identify potential avenues of cost savings.
- 'Unbundle' the college experience: Identify the unique functions colleges perform, such as providing academic content and a marketable degree, and offer them to students separately. There is now an array of companies that provide pieces of the college experience for a fraction of the cost. One common example is the growing number of online courses offered.
- Update an outdated accreditation model: Allow newer institutions to enter the higher education marketplace, rather than protecting the revenue structure of existing schools. Under the current system, new schools face very high barriers to entry due to rigorous accreditation regulations.
Andrew Kelly is a research fellow at the American Enterprise Institute. Kevin Carey is the director of education policy studies at the New America Foundation. They can be reached through firstname.lastname@example.org – 202-862-5904.
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