Part 4 of 4

Most public policy efforts to reform higher education amount to incrementalism.  They do not intervene in the policy structure of the sector.

To set U.S. higher education on a truly better path, transformative new public policy is needed.  To this end, we recommend new policy that creates a measured, well-regulated path into the college sector for nonprofit startup colleges to pursue innovative designs (as only startups can) that offer students a new breed of lower cost and higher quality options. This reform will set real change in motion. It will bring (carefully monitored) innovation and new colleges to students who are increasingly panicked by the high prices, coin-flip odds of degree, and poor labor market outcomes of the college status quo.

Clearing a Path for College Startups

Our college sector needs innovation urgently – innovation that uncovers, refines, and perfects college models far less expensive to families and our governments and far more successful at graduating students and qualifying them for good jobs.

The most plausible way to trigger true innovation in U.S. higher education is to create a pathway into the sector for a new crop of social entrepreneurs who — free from the fixed costs, fixed mindsets, and fixed motives of incumbent colleges – can take a fresh run at designing college.  These entrepreneurs would, in many cases, be accomplished educators and social entrepreneurs who currently work in education settings and in workforce development organizations.

Clearing a path into higher education for a new breed of nonprofit college startups will require policy makers in D.C. and in state capitals, above all, to allow for new approaches to college accreditation. . 

This policy goal – i.e. fashioning a new approach to accreditation that clears the way for new nonprofit arrivals in higher education – will require enormous political will and careful policy design.

One option for accreditation reform is to establish a new national accreditor with jurisdiction over nonprofit college startups and with a focus on outcomes, as follows:

  • An Accreditor for Startups. This novel accreditor would specialize in reviewing, approving, and monitoring high-quality nonprofit college startups that focus on large-scale reductions in delivery costs and on improvements in student outcomes, notably degree completion and job placement rates.  
  • An Accreditor for Outcomes. The accreditor would give these startup colleges discretion in their designs and — in exchange for access to federal financial aid — would demand mercilessly that they share data on their outcomes, reach new levels of quality, and lower costs.

If nonprofit college startups were invited into the college sector and, over time, fielded and perfected college designs with lower costs and better outcomes, then consumer response would be swift. Millions of college students shop annually among private and public colleges. Today’s college students exercise choice. What they need are better choices. When they get them, they will vote with their feet.

The Road Ahead

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  1. Unless otherwise noted, data in this document is available publicly from the College Board and from various federal sources, notably the Integrated Postsecondary Education Data System (IPEDS) and other data files within the National Center for Education Statistics (NCES), the College Scorecard, the Database of Accredited Postsecondary Institutions and Programs (DAPIP), and the National Advisory Committee on Institutional Quality and Integrity (NACIQI).
  1. Throughout this document and unless otherwise noted, for-profit colleges are excluded from our analysis for the sake of brevity and simplicity.  For profit colleges, while controversial, enroll a small and shrinking fraction (currently 5%) of U.S. college students.