How Much Regulation Is Just Right?

I approach the topic of the appropriate reach of government regulation into higher education in very much of two minds. On the one hand, I am the president of an independent-minded private college that has been in continuous operation for 139 years and delivers strong outcomes in terms of access, persistence, graduation, employment and post-graduation debt. Regulation from the federal government isn't likely to impose higher performance thresholds than we have already established for ourselves (and consistently achieved), or to improve our performance, but added regulations will very likely impose new costs on us related to compliance, in addition to being just plain irritating.

On the other hand, I serve on the Board of Trustees of the Higher Learning Commission, and that service has opened my eyes both to the broad variety of institutions that the Commission serves and, very frankly, to instances of institutions that have gone awry, that are not serving their students well, that are not good stewards of the federal dollars that flow through their budgets, and that are either unwilling to admit their shortcomings or unable to address them.

The investment that government -- both federal and state -- makes in financial aid to students, who then pay that money to us so that we can use it to deliver our programs, is certainly considerable, and we need to be good stewards of it, so that students are well-served and taxpayers' dollars well-spent. If those ends are to be achieved, some regulation will be necessary.

So, how much is just right? Here’s an answer: the minimum amount necessary to achieve the two goals I just mentioned: ensure that students are well-served and that tax dollars are well-spent

As the reaction from the higher education community to the Department of Education's talk about a federal rating system for colleges and universities demonstrates, those seemingly simply goals I just articulated aren't simple at all once you get into any level of detail in specifying what it means to be "well-served" or "well-spent."

Does "well-served" for example tie out to a minimally acceptable four- or six-year graduation rate? What about open-access institutions whose mission is to prepare underserved students to succeed at a different kind of institution? What about institutions in a situation where graduation may not be the most important goal?

"Well-spent" raises similar questions. If you are an institution with a graduation rate in the 90 percents, but the percent of Pell-eligible students in your student body doesn’t reach the number of Pell-eligible students that somebody in an office in Washington decided was minimally acceptable, does that mean the federal dollars that flowed to your budget through student tuition payments weren't well-spent because they weren't supporting certain policy goals, despite evidence that your program is effective?

These problems aren't new. Every regulated industry faces them, and perhaps as we think about proposed increases in the regulation of higher education a wise thing to do would be to study those industries -- if any -- where the right balance between the actors in the industry and government regulation has been struck.

In the meantime, here are a few thoughts about how much government regulation is just right:

It's too much if it imposes compliance costs and burdens on institutions that plainly are serving students well and being good stewards of tax dollars. 

It's not enough if there's demonstrable evidence that there are numbers of institutions with clearly articulated and appropriate mission statements that are not delivering on those missions but are nevertheless consuming significant resources.

It's not enough if there is clear and demonstrable evidence that self-regulation, and by that I mean accreditation, is ineffective.

It's too much if regulation requires an institution that is otherwise flourishing to change its mission in response to the policy goals of whoever happens to be running the U.S. Department of Education at the moment.

It's too much if the net effect is to narrow the diversity of types of higher education institutions in America, the diversity of their missions, of their entry points, and so forth.

It's too much if a compliance industry grows up around regulation.

It's too much if it can't be demonstrated that the net effect of the regulations, after the costs and burdens it imposes, has been to make institutions better serve students and steward tax dollars.

Many institutions of higher education in America don't need more regulation to help or force them do their job. Some do. Regulation that starts from that simple fact is most likely to be good for students, good for higher education, and good for the country.