Education nudging
By Daniel M. Ryan
web posted June 21, 2010
The U.S. Department of Education's announcement of new requirements for colleges receiving federal aid could be looked at as showing how Democrats react when they're faced with limits. The limit in this case is student-loan funding, which the Obama DoE wants paid back more frequently. To this end, proprietary institutions of higher education [for-profit colleges] and postsecondary vocational institutions which receive federal aid will be required to provide graduation and job-placement rates. The report sketching the reforms out did not say that those rates are to be broken down by major; nor did the summary at the Department of Education's Website. Other features are elimination of the bounty system for compensating student recruiters and bans on misrepresenting career or success prospects.
Those reforms display the mindset of the Democrats. Implicit in them is the picture of helpless students being preyed upon by slick-talking recruiters and oily admissions officers, who seduce said naïfs into taking on more debt than they can afford. Given that it's a Democratic Administration, not much else could be expected. As a reform, though, it has the potential to be the thin edge of the wedge – a wedge that conservatives can use. To put it in quasi-lawyerese, a precedent has been set but with only partial application; that partiality makes it inconsistent. More plainly, the new requirements leave a noticeable loophole that lets one of the Democrats' major constituencies off the hook. That would be the so-called non-proprietary institutions of higher education. They don't have to disclose a thing, even though they have some student-loan problems themselves. This inconsistency is, of course, geared to not rile the Democrat professoriate.
Right Up The Alley
The fact that some majors are associated with high-paying jobs while others are associated with difficulty hauling the student-loan sack is well known among conservatives, especially economic conservatives. Not being liberals, they tend to criticize the students in the latter category for being foolish. It fits in with the conservative critique of America's socio-economic decadence: too many lawyers and artistes, not enough engineers and scientists. Reminiscent of the remark that the U.K. went decadent because its schools graduated too many civil servants and not enough civil engineers, this part of the critique blames American lack of competitiveness in cutting-edge manufacturing to too much softness in American higher education. Too many students taking easy courses and majors, and treating themselves to a four-year party. Too many professors going easy on their students, and minimizing their professorial duties to save more time for research, scholarship or other career-focused activities. The end result is less a community of scholars than a community of slackers attending de facto think tanks.
What's interesting about the DoE reform package is that it concedes, once the Democrat niceties are stripped away, that the critiquers have a point. As is customary for them, the Democrats make the for-profit branch into the whipping boy for the whole sector while not daring to look further. What this inconsistency means for conservatives is Obama & Co. have opened a certain door but are not walking through. The next level would be walking through.
It doesn't take a Canadian outsider such as me to spell out what the next level would be:
- Breaking down graduation and job-placement rates by major or specialty.
- Breaking down student-loan default rates by major or specialty.
- Breaking down unusually delayed repayment times by major or specialty.
- Extending the same oversight required of proprietary institutions of higher education to non-proprietary ones. (Fair is fair, after all.)
- Extending the same prohibition against misrepresentation to non-proprietary institutions of higher education. (Again, sauce for the gander.)
Destroying Education?
One objection to the above list of extensions to the DoE's own reforms – that's all that it is – claims that it would gut higher education. It would make the university more venal, more mercenary, and clamp down on courses of study whose true worth is not captured by the soulless marketplace. Nowadays, anyone making that argument would be quickly pegged as an arty leftie. Believe it or not, the same argument would have pegged the objector as a Kirkian conservative back in the '50s and '60s. Leave it to self-interest to explain why lefties are catching up with conservatism's yesterday.
In the venal and mercenary world of dollars-and-cents economics, which in this case includes taxpayer dollars, a course of study whose worth is captured by the future earnings to be derived from it is an "investment." A discipline whose worth is not captured by future earnings is called a "consumer good." Granted that most majors partake of both, and I will stipulate that the category is blurred from the input perspective. An engineering student that can't get enough of engineering may experience an engineering program as largely a consumer good, because (s)he thinks it's fun to study and talk about engineering. There are more than a few amateur mathematicians turned pro who are like this. Making the categorization more confusing is the fact that an engineer who sees hard study as a pleasure instead of a chore is likely to wind up a better, more resourceful and more productive engineer unless (s)he's a mere study robot. When measured in terms of inputs, the two categories are sometimes hard to distinguish.
That's because the demarcation line comes with outputs. Some disciplines show a statistically significant tendency to lead to steady high-paying jobs relative to the institution as a whole, while others don't. Some show the opposite tendency.
There's nothing inherently wrong with someone taking a course of study for the sheer love of it with no thought for career prospects. Many people like that do add to the world outside of the market nexus. There's nothing innately wrong with an education that economic analysis would peg as a pure consumer good. After all, there's more to life than production. Production for production's sake elevates a means to an end. Outside of strict Calvinism, there's no moral duty to abjure enjoyment for productivity – and Calvinism nestles productivity in a wider matrix of Godliness. There is a real gulf between "wrong" and "imprudent."
Unfortunately, that gulf does not make imprudence into a virtue. [Myself, I had to learn this the hard way.] It would be of no consequence in the abstract had education been completely self-financed, but modern higher education does have a lot of taxpayer help. Said taxpayer is slowly becoming tapped out.
To use an old trope: even the Obama liberals agree to the need for limits, in their own way. 
Daniel M. Ryan is currently watching The Gold Bubble.