Obama's Education Initiative

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President Obama recently proposed a set of measures to make college more affordable. Some experts have argued for more innovation to drive down education costs, and the President is suggesting drastic changes to how the federal government promotes postsecondary education. Pending Congressional approval, federal financial aid would be partly linked to college rankings on measures like tuition, graduation rates, the percentage of lower-income students attending, and how much money graduates make. Some of this information is already available through an online college scorecard released earlier this year. The motivation for this approach is to encourage institutional innovation and allow students attending highly ranked colleges to receive better financial aid.

The President has also proposed other ideas, including experimenting with competency-based degrees that reflect students' knowledge more than the hours they've spent in the classroom, massive open online courses, three-year degree programs, performance-based financial aid, and more.

With changes likely coming to post-secondary education in the coming years, it is crucial to base policy decisions on the best research available. The Future of Children's issue on Postsecondary Education in the United States is a good place to start.

For example, while online learning is often believed to be an institutional cost-cutting measure, Bell and Federman explain that the evidence is inconclusive. There are significant start-up and recurrent technological support costs, yet implementation may result in savings in instructor compensation costs over time--particularly if institutions adopt more machine-guided courses. Research shows online learning can be effective for students, but we know little about how to do it right. One challenge colleges will likely face is a high dropout rate--especially among low income students without a fast Internet connection. In promoting innovation, the federal government will need to consider how to support technology delivery and use among disadvantaged students.

Obama has proposed performance-based financial aid. Dynarski and Scott-Clayton found that linking student financial aid to achievement can improve college performance and completion more than grants with no strings attached. This measure will likely be effective for enrolled students, but another issue is outreach to prospective students. For instance, many of them overestimate the cost of attending college by as much as three times, and a recent national survey of young adults found that fewer than three in ten individuals people without a college degree knew what the Free Application for Federal Student Aid (FAFSA) was. In revamping the financial aid program, policymakers should keep in mind that program complexity undermines aid's effectiveness. Aid needs to have simple, easy-to-understand eligibility rules and application procedures. To find more research and policy recommendations see the Future of Children's issue on Postsecondary Education in the United States.

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