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I don’t know if it was planned this way or it just happened, but the last morning of the conference had a consistent theme: everything came back to vouchers.
As Zakiya Smith Ellis noted, “vouchers” are a dirty word in K-12, but higher ed loves them. The entire federal financial aid system can be understood as a series of vouchers. Forty-seven years after direct institutional aid was replaced with Pell grants, we see the consequences throughout American higher ed.
The morning began with a panel on different models of statewide coordination and/or control of higher ed systems. (Don’t worry -- it was better than it sounds.) It featured Zakiya Smith Ellis, the Secretary of Higher Education for New Jersey; Brian Noland, the President of East Tennessee State University, and Robert Anderson, President of the State Higher Education Executive Officers Association (SHEEO). The discussion started relatively abstractly, with brief overviews of the contradictory trends towards centralization and decentralization in various states. It took me back to my old poli sci days, in which we’d discuss the merits of federalism as opposed to confederations. The consensus, unsurprisingly, was that every state is different.
Soon, though, the conversation turned to money, as tends to happen. In any underfunded system, tensions arise as constituents within the system fight for what resources there are. Smith Ellis drew an instructive contrast with the Australian higher ed system. There, as she told it, the government funds a set number of seats in colleges; colleges admit until the seats are full. (Any Australian readers are invited to comment; I don’t know the system well enough to know if her description is correct.) In the US, we attach the money to students, who then choose where to go. The advantage of our system, at least in theory, is that nobody is shut out. The great flaw in our system is that it makes institutional planning a lot harder. Budgets rely on enrollments, which fluctuate for reasons partially out of colleges’ control. With state appropriations covering less than they used to and tuition covering more, the risk that colleges are asked to bear grows progressively greater.
Smith Ellis stayed on stage after that, joined by Tiffany Jones from Education Trust. They started with noting that the surface-level fairness of a voucher system often fails to achieve fair outcomes, because many students -- especially low-income ones -- don’t know the difference between a sticker price and a net price. The vouchers have also failed to keep pace with costs, so even students who know the system reasonably well can struggle.
Jones expanded the critique to outcomes-based funding, noting correctly that it assumes an unproblematic starting line, “as if there’s some sort of even playing field.” Colleges that enroll the most low-income students and the most minoritized students get the least funding. That has obvious impact on the performance on which subsequent funding is based. What looks at first blush like fairness actually compounds pre-existing hierarchies.
Turning to solutions, Smith Ellis noted correctly that federal matching grants for states have the virtue of being relatively non-coercive, and that they can get around the moral hazard of “supplanting” state money to which Pell falls victim. But judging by the track record of Medicaid expansion, which featured a remarkable 9-to-1 match, there’s no guarantee that they’ll work. The alternative mechanism -- a “maintenance of effort” requirement -- may freeze flat funding into place for a while, but only that, and only for a little while. It also tends to generate a lot more political pushback, because states (rightly) perceive it as coercive.
The last panel, devoted to accountability metrics, quickly addressed many of the same issues. It featured Diane Auer Jones from the US Department of Education; Kate Shaw, Executive Director of Research for Action; and F. King Alexander, President of Louisiana State University. Auer Jones caught my ear with a claim that data from two years after graduation show that liberal arts bachelor’s grads make more money than STEM grads, outside of computer science and engineering. The reason is that many of the higher-paying STEM jobs require a degree beyond a bachelor’s. It struck me as the sort of factoid that should get far more traction than it has.
Shaw and King focused on outcomes-based funding (also called performance-based funding). Shaw drew a distinction between OBF and the college scorecard, based largely on the intended audience: as she put it, OBF is “inside baseball” that should be invisible to most parents and students. It’s intended to improve their experiences, but without them having to pay attention to it. The scorecard is for public consumption, but the parameters of OBF are of interest mostly to administrators and trustees.
King attacked the notion of “bright line” performance criteria with his characteristic quotability. “I can hit any number. I can get the graduation rate up. Just turn away the lower-income kids, and turn away the males.” (The point being that such measures would be ridiculous.) He also went after “voucherization,” noting succinctly that “it doesn’t do any good to raise Pell grants by $200 when I have to raise tuition $500 to make up for state cuts.” As long as federal vouchers don’t come with safeguards to prevent state legislatures from supplanting their own money, we’ll continue to spiral downward. He concluded lamenting that nobody holds state legislatures accountable. That struck me as debatable -- they’re elected -- but the larger point held.
Shaw wrapped up with a foreshadowing of a research project on baseline costs. Echoing Tiffany Jones’ comments from another angle, she pointed out that while we argue about increments and directions, we don’t have good baseline data on how much money a community college or state college actually needs to do its job well. Without that, introducing OBF when the underlying budget is too low is simply punitive.
Taken in rapid succession, the picture that emerged was of a system that was built to not be a system. By recasting students as intermediaries through which funding flows, we’ve built instability into the system. OBF doubles down on that instability, and creates perverse incentives that quickly devolve into caricature. Americans don’t like “big government,” but the workarounds get complicated quickly. The alternative is that we all start to look like Alaska.
