How the New Education Dept. Might Treat ‘Innovation’

On some policies that’s easy: Expect Cardona to reverse what Betsy DeVos did. We will probably see a return to broader approaches to Title IX enforcement, stricter regulation of for-profit higher education, and a less-cumbersome regimen for students seeking loan-repayment relief if they’ve been defrauded by their colleges.

The crystal ball gets a bit cloudier for policies on issues the DeVos department didn’t pay much attention to — especially some of the trendy ideas that are often lumped under “higher-ed innovation,” and that frequently stir controversy because there’s big money involved or they threaten established norms. I’m thinking here about developments like the growing influence of online-program-management companies, the push for income-share agreements as a college-financing option, and the rise of alternative credentials, among others.

Yet some emerging political and economic factors could determine the department’s posture toward any “innovation agenda.” Early signs point to an administration focused more on keeping things stable than on pushing the envelope.

To help me assess the landscape, I consulted three higher-ed observers with varying political perspectives: David Soo, chief of staff at Jobs for the Future and a former senior policy official for innovation in the Obama Education Department; Lanae Erickson, senior vice president for social policy and politics at Third Way, a self-styled centrist think tank in Washington; and Andrew Kelly, now senior vice president for strategy and policy at the University of North Carolina system office, and before that, the founding director of the Center on Higher Education Reform at the American Enterprise Institute.

Also, two caveats: Without knowing who will head up higher-ed policy for the department, any predictions today could be off. And it may well be that responding to the pandemic will continue to be the all-consuming theme for many months to come.

3 key issues and where the department might come down.

I wonder especially about online-program-management companies (OPMs) and income-share agreements (ISAs) because in the months before Covid-19 hit, Sen. Elizabeth Warren, a Massachusetts Democrat, singled out both for scrutiny, and the department’s independent Office of Inspector General identified OPMs as a target of study.

OPMs have become a $3-billion-plus industry globally over the past decade, thanks in part to a department action in 2011, which to my mind is a pretty thin reed of support for a sector of this size. The action — not even a full-fledged regulation — exempted colleges’ use of the companies from a federal ban on paying recruiters based on enrollment, as long as the colleges involved were controlling enrollment and the two entities remained independent of each other.

But if there was once fervor for a clampdown on OPMs, on the argument that they claim too much of a share of the tuition pie and indirectly drive up tuition costs, the pandemic pivot to online education may have changed that calculus. Colleges are more dependent on these companies than ever before, and, as Soo noted, “a lot of higher-ed institutions like them and are making a lot of money off them.”

Maybe, though, the online pivot will also fan the flames. Lots of student-advocacy groups see OPMs as a “net negative,” Erickson said, and she predicted those groups, along with civil-rights organizations and teachers’ unions, would hold a lot of sway with the department’s new leadership and its approach to regulation.

For the same reasons, Erickson said she expects ISAs won’t get much traction from the incoming Education Department. Some colleges and other providers, such as coding boot camps, would love to see more legal clarity around ISAs to make them easier to adopt. But with all the discussion about canceling student debt, Erickson said, “the loan conversation has moved to the left in a serious way.” Financing models regarded as Wall Street’s answer to the student-debt crisis aren’t likely to win much favor.

The alternative-credentials movement, on the other hand, could be in line for a boost. That’s especially likely, said Kelly, “given where the economy is and may be for a while.” Getting people quickly back into jobs is going to be a big priority for policy makers, and that may prompt the department to make it easier to use Pell Grants and other federal funds in nondegree programs. Certificates and other offerings at community colleges, Erickson added, could get particular attention and leeway in the next administration. Other proposals from them could too.

On alt-credentials and other topics, all three of my “consultants” said they hoped the new Education Department would reflect on past experience in setting policies. A just-released analysis of a department experiment using Pell Grants for short-term programs, for example, found that while the funds did make it easier for students to enroll and complete the programs, there was no proof that people ended up in better-paying jobs as a result. (Hat tip to New America’s Clare McCann for this Twitter thread that nicely summarizes those findings.)

That’s a good reminder of another factor that could differentiate Biden’s Education Department from Obama’s. It’s a lot easier to collect and analyze data on students’ incomes and labor-market outcomes today than it was in 2008. On many counts, policy makers should be sure to make use of that information in setting a course.

Student needs, college closures, and the bully pulpit.

Beyond the topics that interested me, Erickson, Kelly, and Soo each had further thoughts about how the department would — or should — prioritize innovation.

Money and policies matter, said Soo, but plain old advocacy can make a big difference, too: “There’s so much that can be done with the bully pulpit that hasn’t been used in the past four years.”

Where conversations about innovation used to focus primarily on affordability, the pandemic has highlighted the importance of recognizing a broader range of student needs. “Now,” Erickson said, “it’s about students’ homelessness and child care and broadband.”

If the Biden administration plans to make good on its many postsecondaryeducation proposals — including free community college for all and debt-free college for many others — that could consume the department for the next couple of years, said Kelly. That won’t leave much energy for other matters. But given the effects of the pandemic and continuing demographic trends, many more “precipitous closures” of colleges are clearly on the horizon. “It always seems to be incredibly disruptive,” he said. “Do the feds need to rethink how any of that works?”

Got a tip you’d like to share or a question you’d like me to answer? Let me know, at [email protected]. If you have been forwarded this newsletter and would like to see past issues, find them here. To receive your own copy, free, register here. If you want to follow me on Twitter, @GoldieStandard is my handle.

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