Gateway to Think Tanks
来源类型 | Report |
规范类型 | 报告 |
Moving beyond college: Rethinking higher education regulation for an unbundled world | |
Michael B. Horn; Andrew P. Kelly | |
发表日期 | 2015-08-19 |
出版年 | 2015 |
语种 | 英语 |
摘要 | Key Points New “unbundled” higher education providers with modular, low-cost offerings powered by technology have begun to emerge, but they are constrained by the higher education regulatory system’s reliance on the traditional bundled model. Policymakers could set up a path for these providers to receive federal aid in exchange for enhanced transparency on outcomes and cost, use independent authorizers to approve new providers and hold them accountable, or establish a market-entry regime based on labor-market outcomes and student satisfaction relative to an institution’s total expenditures. Policymakers could also develop new financing approaches that may reduce taxpayer risk. They could require new providers to put up private capital to become eligible for federal aid and reimburse them if they exceed agreed-upon outcome targets or utilize tools like need-based grants and income-share agreements to spread risk across students and investors. Policymakers may also simply wait for this emerging market to mature on its own and let consumer demand and competition drive innovation, though this pathway is slow and uncertain. Executive Summary In the face of increasing costs and lackluster outcomes, traditional higher education is under increasing pressure to prove its value proposition. Meanwhile, new providers have “unbundled” the components of a postsecondary degree or certificate, offering stand-alone courses or sequences of courses, targeted job training, and assessments and certifications, often at much lower cost than existing institutions. These models cannot deliver all of what a traditional college or university does, but they can provide affordable, flexible, and customizable opportunities to learn. As unbundling in higher education has accelerated, reformers have asked whether there is a role for federal aid dollars to play in facilitating access to these new opportunities. This, in turn, has raised questions as to whether the traditional approaches to regulating postsecondary education at the state and federal level are well suited to this new ecosystem. The entire regulatory system that governs postsecondary education—from financial aid policy to quality assurance to data collection and transparency—is premised on the institution as the key unit of analysis. Students who wish to access federal aid must be enrolled in degree- or certificate-granting programs at accredited colleges. Shorter-term training, sequences of courses, and prior learning assessment are typically held at arm’s length. That the existing quality assurance system is ill-designed for this new world is abundantly clear. Less clear, however, is what should replace it. Simply lowering barriers to entry such that federal money can flow to a much wider array of providers would invite waste, fraud, and abuse. Thus, this policy brief outlines potential regulatory approaches and tools—many of which would work well in combination—that policymakers could use to facilitate access to this unbundled market while protecting consumers and taxpayers. First, we discuss a series of reforms to the federal approach to quality assurance: increased transparency, a chartering model, and an outcomes-based accountability framework. For instance, policymakers could require innovative providers to opt in to additional data collection and reporting to be allowed access to federal aid. A chartering model would empower new, independent authorizers to govern market entry and hold providers accountable over time. Finally, reformers could also develop an outcomes-based approach focused on value that measures labor market outcomes and student satisfaction relative to an institution’s total expenditures. The second section presents a couple of ways that policymakers could rely on private financing to bear some of the risk in quality assurance. For instance, new providers could be required to put up private capital to become eligible for federal aid. In addition, the government could employ a “pay for success” model—perhaps through a social impact bond—in which providers could be reimbursed if they reach agreed-upon outcome benchmarks. Lastly, at the individual level, the government could create space for private financing, such as income share agreements, that could help students access worthwhile options. The third section argues that policymakers might also choose to wait for the market to mature on its own and let consumer demand and competition drive innovation. Market pressure, not government, may better facilitate the emergence of a high-quality unbundled market, though this pathway may limit access for students who lack the necessary resources. We do not recommend one approach over the others but instead suggest that policymakers should carefully experiment with them. Such experimentation can lay the groundwork for a more comprehensive reform to the entire federal aid system as we learn more about what approaches prove successful. Introduction Amid a chorus of concerns about quality and cost in American higher education, a range of new postsecondary models has emerged as an alternative to the traditional system. In particular, entrepreneurs have asked why the ability to provide college-level courses should be reserved only for colleges. Digital content and smart people are abundant, and advances in technology have made it possible to deliver that content and assess learning at a far lower cost and without respect to geography. In response, organizations have developed modular—or unbundled—offerings powered by technology that target both adult and traditional college-age learners. Although these models cannot deliver all of what a traditional college or university does, they can provide affordable options that are more flexible, targeted, and customizable. This development is not unusual. In every industry, the early successful products and services often have an interdependent architecture—meaning that they tend to be proprietary and bundled. The reason is simple: when a technology is immature, to make the products good enough so that they will gain traction, an organization has to wrap its hands around the system architecture so that it can wring out every ounce of performance. As a technology matures, however, it eventually overshoots the raw performance that many customers need. As a result, new disruptive innovations emerge that are more modular, and customers become less willing to pay for things such as raw functionality and increased reliability. Instead, they start to prioritize the ability to customize a product to their individual needs at an affordable price. Customizing a bundled service is expensive because it forces a full redesign of the underlying system architecture, but customizing a modular offering is affordable because it is merely a matter of mixing and matching discrete parts that fit together in well-understood ways. The computing industry provides one illustrative example. The Dell desktop computers that disrupted Apple and IBM’s personal computers were modular devices, as Dell made none of the parts internally but instead purchased them from manufacturers such as Seagate, Intel, and Microsoft. This modularity enabled Dell’s customers to specify the features and functions they wanted, and then Dell could assemble and deliver them an affordable computer within 48 hours. A similar unbundling has taken place in the newspaper industry. Newspapers are in fact a bundled offering that perform many functions—including allowing people to sell used goods, find a job, become well-informed, and make commuting time more productive—even if readers historically chose which aspects they consumed. As such, it has not been just news websites and blogs that have disrupted newspapers but also services such as Craigslist, Cars.com, Zillow, and Monster.com, along with new, affordable hardware such as smartphones and tablets. The early days of such unbundling may be underway in higher education. Universities emerged in the 17th and 18th centuries primarily as teaching institutions, but most gradually evolved to become expensive conflations of three very different value propositions around research, teaching, socialization, and networking. The bundling of research and teaching, in particular, made sense. In a world where knowledge was scarce, it was crucial to have those who did the research also teach students about their field and what they were learning and to bring those researchers and students together in the same place. Universities have relentlessly worked to perfect this bundled paradigm by layering more and more services, academic departments, and research facilities onto existing institutions. But the bundled model is unavoidably expensive; as the wages for highly educated workers grow in the rest of the economy, institutions must pay professors more even though they teach the same number of students every year. Meanwhile, the competition for prestige leads campuses to invest in things that will attract the best students and the best faculty but may have little to do with the core business of teaching and learning. Moreover, the university’s different value propositions inevitably rub up against one another, particularly when public funding is tight; maintaining each of them requires significant coordination of overhead costs—in the form of administration—which takes resources away from research and teaching. The rise of the Internet has arguably changed this equation, making access to knowledge—and even the experts themselves—abundant and not dependent on place. Students can now access inexpensive college-level coursework and exams from anywhere in the world. The Internet has also changed both the kinds of jobs people want and the training they require as it has lowered the cost of founding educational organizations, recruiting students, and delivering content. The result is a new opportunity for firms to offer stand-alone courses and career-preparation programs that reflect the skills that are currently in demand. Online course providers such as Udacity and Udemy have worked with employers to create new courses, assessments, and credentials that are tailored to the changing needs of employers. New place-based programs, such as General Assembly and Dev Bootcamp, have also popped up around the world to provide immersive and condensed blended-learning programs as well as individual online courses designed to prepare students for jobs in the tech industry. Offerings such as these enable people to customize their education at a relatively low cost.[1] As increasing numbers of people question the value of the bundle traditional colleges and universities offer, the unbundling of college into its component parts—courses, assessments, credentialing, even campus life and personal growth—will continue to pick up steam.[2] The challenge is this: although this unbundling has already begun, the entire regulatory system that governs postsecondary education—from financial aid policy to quality assurance to data collection and transparency—is based on the idea that the institution is the fundamental unit of higher education and that the traditional degree is its currency. To access federal grants and loans, institutions must be approved by an accreditation agency; individual degree programs or courses are part of the bundle, but they are not individually eligible to receive student aid. To qualify for grants and loans, students must be degree- or certificate-seeking; those taking key courses that build skills but do not culminate in a degree are out of luck. As unbundling becomes more common, of course, these units of analysis (institutions and degrees) will become less relevant to students. Rather than picking institutions and degrees, students in the unbundled market choose individual courses or discrete programs and learning experiences from a mix of organizations. Regulators’ continued reliance on the bundled model has constrained new entrants’ ability to compete with existing institutions on a level playing field. If students have a choice between a low-cost program that they must pay for out of pocket and a more expensive one for which they can use grants and loans, many will choose the latter. These constraints have led to a scenario in which potentially disruptive entrants that could lower costs and better serve student needs are at best kept on the periphery of the system and at worst unable to attract students.[3] Fortunately, the prospect of unbundling has given rise to a serious discussion of how the government could reform its regulatory regime to level this playing field. In particular, assuming public subsidies will continue to be important in ensuring access to higher education, policymakers will need to address what the government is able to fund and how it exerts quality control. But even if government funding is not a crucial part of the future because low-cost business models and new financing mechanisms emerge, the government—at both the federal and state levels—will still have a regulatory role in licensing education institutions and regulating private funding mechanisms. Trying to ensure quality across a proliferation of courses and providers is a challenging task in itself; doing so with regulatory tools created a half century or more ago is extremely difficult. The traditional accreditation system seems unlikely to step up and approve these unbundled approaches at the rate they are appearing. An outcomes-based approach would enable a broader array of organizations to operate, but externally validating outcomes can be difficult—it is tough to attribute wage increases or employment to one course versus another educational experience. At the same time, a regulatory policy designed to evaluate these experiences on the front end would be difficult to execute because of the thousands of courses and learning experiences to evaluate. Because this is an emerging issue, this conversation is evolving. This policy brief attempts to lay out potential approaches and tools—government-administered quality assurance, new approaches to financing, and market-based accountability—that policymakers could use to encourage the emergence of an unbundled market. The idea here is not to fetishize one particular approach but instead to create space for new offerings that can be customized to meet the needs of different students and at prices those students can afford. The paper offers three basic approaches, each including at least two specific pathways that provide a sense of how a policy might accomplish these ends. We also discuss some of the pluses and minuses of each approach. The different approaches are not mutually exclusive, but they fall into three broad categories. More specifically, the first section describes reforms to federal financial aid policy and regulation that would broaden eligibility for public money to a wider range of providers. These reforms range from the least intrusive, such as ensuring transparency and letting consumers decide, to more involved government quality-assurance mechanisms, such as outcomes-based regulation. The second section discusses different ways that policymakers might rely on private financing to shift a good deal of the risk to the private market. The third section suggests that policymakers may simply want to wait for the market to mature on its own and let consumer demand and competition drive innovation. No one tool will be a magic bullet, and pushing for a comprehensive reform to the eligibility rules governing federal student aid programs would be a mistake at this early stage. We have much to learn about this emerging market. Therefore, the most prudent strategy at this stage is for policymakers to experiment with these different approaches and tools and mix and match them to learn about the strengths and weaknesses of each. The key is to find areas to test new regulatory approaches that will maximize our ability to learn about the likely effects of unbundling while limiting taxpayer and consumer risk. Policymakers can then expand those experiments that prove successful while discarding those that are not. In addition, the lessons of disruptive innovation suggest that attempting to overhaul the entire system is a political nonstarter and a fool’s errand. When policymakers try to change existing regulations that fundamentally threaten the status quo, the leading organizations that have built large, successful business models under that status quo will predictably fight to preserve the current order. They will typically win those battles, or at the very least water down any reforms that threaten their position. Regulations are easier to change once a clear alternative to the existing system emerges, complete with new entities that would stand to benefit from changes and have significant resources to support reforms.[4] Read the full report. Notes |
主题 | Higher Education |
标签 | Center on Higher Education Reform ; Higher education ; higher education accreditation system ; Quality assurance in higher education |
URL | https://www.aei.org/research-products/report/moving-beyond-college-rethinking-higher-education-regulation-for-an-unbundled-world/ |
来源智库 | American Enterprise Institute (United States) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/206158 |
推荐引用方式 GB/T 7714 | Michael B. Horn,Andrew P. Kelly. Moving beyond college: Rethinking higher education regulation for an unbundled world. 2015. |
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