ObamaCare for Everything
First health, then finance and now higher ed gets a federal fix.
• DANIEL HENNINGER Wall Street Journal
Thousands of American higher-education administrators will spend part of Labor Day weekend trying to plumb the meaning of the ideas President Obama dropped on them last week to "reform" the American college and university system. Given the political genome of college administrators nowadays, they'll try to make the Obama plan work. But for the handful who want to preserve and protect their hallowed institutions, here's a recommendation: Drop by the nearest medical school for a chat with the doctors about how it's going with the Affordable Care Act, aka ObamaCare.
Insofar as all these higher-ed reforms will be tied to federal rules for getting the money, it is beyond dispute that this will be ObamaCare for education, just as Dodd-Frank was ObamaCare for banking and finance.
A clue to where this is headed may be seen by clicking on the White House backgrounder's link to the "Financial Aid Shopping Sheet" jointly developed by the U.S. Department of Education and Dodd-Frank's Consumer Financial Protection Bureau. The sheet has a striking name atop it: "University of the United States (UUS)"—with a logo, no less.
The education proposal reflects the Obama modus operandi. First, identify an American industry that long ago made a Faustian bargain for federal support, such as hospitals and housing. Then describe the subsidy-dependent industry's inevitable bloat and inefficiency in images so stark no reasonable person could disagree. "Burdened with tens of thousands of dollars" in student debt, Mr. Obama said at Binghamton University in New York, "they have to put off buying a home, or starting a business, or starting a family." [Footnote: That was federal student debt.] Then after getting buy-in from the mortified industry, he imposes the solution—on his terms.
Those terms, as described by the White House, are that future financial aid will be tied to "college performance," based on a federal rating system of all colleges designed by the Department of Education with metrics defining affordability (average tuition, scholarships, loan debt), admission rates for disadvantaged students, remedial support for disadvantaged students, student outcomes (graduation and transfer rates, postgraduate earnings), and bonuses based on the number of Pell students graduated. And a lot more. The White House calls this a "datapalooza."
Terry Hartle of the American Council on Education commented on the proposals in the Chronicle of Higher Education, "If you want to condition the receipt of student aid on this information, you have an obligation to have perfect data." Wrong. Like ObamaCare, you'll make this work with far-from-perfect data.
One attribute that sets the U.S. higher education system apart from any in the world is the diversity of its 4,495 degree-granting institutions—big, small, private, public, religious. Under this plan, that historic diversity would melt beneath conformance. The Obama plan says it will increase the number of college graduates and contain tuition costs by "rewarding states that are willing to systematically change their higher education policies and practices."
Random thought: Will professors at participating ObamaEd universities become subject in time to the same cost-containment rules that, say, Medicare imposes on doctors? Think it can't happen? Better read the president's speeches last week.
To better comprehend the origins of all this, one need only visit the White House website and read the proposal's first sentence. Actually it's the first half of the first sentence, which makes it clear that something other than student debt loads and repayment schedules is in play here: "Earning a postsecondary degree or credential is no longer just a pathway to opportunity for a talented few." A talented few?
When, since the end of World War II, has U.S. higher education been for the "talented few"? Like everything else the past four years, the economics of higher education is about to be refracted through the same lens of social antagonism Mr. Obama uses to think about pretty much everything.
Here are two higher-ed reforms that weren't in the president's speeches last week, and likely never will be.
The first is reform of the U.S.'s No. 1 national disgrace: the failed inner-city public-school system. Their doors opened again this week, and in nine months they will sweep tens of thousands of uneducated "graduating" seniors out the doors, with no chance of qualifying for any college.
The Obama administration's contribution to the new school year? A lawsuit just filed by Eric Holder's Justice Department against Louisiana's school-voucher program, whose black participation rate is 90%. Why isn't Education Secretary Arne Duncan finally resigning in protest?
The second reform would be returning the U.S. to its historic 3.3% economic growth rate, rather than the below 2% rate of nearly the entire Obama presidency. In his speeches Mr. Obama said a college education ensures higher lifetime earnings. But not if you've graduated into four years of unemployment or underemployment.
Imposing ObamaCare on health, education, finance, energy and anything else in reach is the reason why 2% growth and 7.5% unemployment looks chronic. We may have the best higher-education system in the world, but we're underachieving. So is the president.