UV Letters

May 13, 2016 BACK

You’re The One That I Want: A More Balanced Approach to Regulation

Volume VI, #10

One of the great tragedies of my childhood involved Olivia Newton-John. It wasn’t her 1981 video for Physical, although, in retrospect, the spandex spawned therefrom was a tragic crime of fashion. No, it was three years earlier: her introduction to a mass audience in the smash-hit Grease.

The tragedy, of course, was that, at the end, beautiful, natural Sandra Dee (“Sandy”) – the archetypal good girl – felt compelled to become a bad girl in order to win John Travolta’s Danny Zucko. For me, it was cold comfort that Danny also made an effort to change. First, his effort (a Rydell High letterman sweater over T-bird standard issue) fell short of his stated ambition (“I’m going to do anything I can to get her”). More important, it was dwarfed by Sandy’s transformation: red heels, tight black leather pants + jacket, low-cut shirt, smoking a cigarette, and hair and makeup seemingly courtesy of a nearby brothel. The pretense that the intersection between bad and good could be anywhere other than bad went out the window the moment Danny simultaneously lost control + his letterman sweater and was reified by suggestive dancing in the Shake Shack.

I remember walking out of the theater stunned, wondering why we had to lose Sandra Dee. I was depressed for days. Wasn’t there some happy medium? For example, couldn’t Sandy have put on Danny’s sweater? She could have been black and white – a singing, dancing, Australian zebra.

Many years later, I recognize that I wasn’t only upset because beautiful Sandra Dee had become a less appealing tart (although that was a lot of it), but rather because of the inherent Hobbesian weltanschauung: we’re all bad, and even those as good as Sandy are bound to end up cavorting in a fun house all the way to hell.

***

My Grease-induced childhood trauma explains what most upsets me about the current regulatory direction in postsecondary education: a Hobbesian guilty-until-proven-innocent approach with the burden of proof firmly on the institution.

As I noted in my last post, the origins of this approach are the understandable result of misleading and predatory behavior by bad actors among for-profit and traditional colleges and universities, and the tens of thousands of students who have been injured as a result. But look at the new Gainful Employment regulation. Gainful Employment (GE) calculations don’t include graduates’ income not reported to the IRS. Given that unreported income plagues many fields with significant GE coverage e.g., cosmetology, photography, massage therapy, paralegal, it’s quite possible that no institution covered by GE will be able to continue to provide these programs.

If that doesn’t sound fair, GE has established an earnings appeal process. It’s called the Recent Graduate Employment and Earnings Survey and it allows schools to survey their cohort graduates to see if they have additional wages that can be factored in. But the burden is on the institution to accomplish this, and achieve a survey response rate of over 50% – a Kafkaesque task considering graduates are unlikely to willingly divulge misreporting their earnings to the IRS. In addition, because institutions aren’t receiving student-level income data from the government, they’re unable to fully evaluate which programs are likely to pass the GE metrics, which naturally apply retroactively, allowing no opportunity to make changes.

Unfair burden shifting like this isn’t an innovation of GE. This legalistic approach has been utilized for years by the Office of the Investigator General within the U.S. Department of Education, including in the current investigation as to whether Western Governors University’s programs should be reclassified from “competency-based” to “correspondence courses” due to failure to provide “regular and substantive interaction, as well as in repeated instances of failing to close out investigations because institutions are unable to prove that something bad didn’t happen.

***

I get why we’re heading in this direction. Our toothless system of accreditation – more focused on process than outcomes – sat idly by while Corinthian burned its students and then burned to the ground. Burden shifting is an understandable reaction to a primary regulatory system that can sometimes appear Panglossian. Fortunately, there is a better way.

Coding bootcamps like General Assembly and Galvanize are coming forward with a more sensible framework for regulation in postsecondary education:

  1. Define common outcome metrics to be reported by every provider along with broad minimum standards that must be achieved; and
  2. Work with third-party validators to audit and approve reported numbers.

In General Assembly’s case, outcome metrics were the subject of an initial whitepaper prepared with the assistance of two of the Big Four accounting firms (thereby signaling a potential third-party validator). Galvanize is focused on placement rates and is considering utilizing California’s Bureau for Private Postsecondary Education’s definitions and – if accepted into the EQUIP program – would utilize a quality assurance entity (QAE) approved by the Department of Education.

A better response to the current lax regulatory regime is not to engage in legalistic burden shifting, but to clarify that institutions have the burden to – as the GA whitepaper says – “measure what matters” and demonstrate achievement. This means reporting defined metrics (i.e., reflecting that learning has actually occurred and that students are completing and landing remunerative jobs) that exceed broad minimum standards and ensuring that third-party validators review and approve the numbers as accurate. No provider should be required to do more than this.

With luck, the Department of Education will stop trying to regulate on the basis that providers of postsecondary education are wandering around wondering whether there are “Worse Things I Could Do.” Although no college or university could possibly be as good as Sandra Dee, unreasonable burden shifting should not be the Word when it comes to higher education regulation.

University Ventures (UV) is the premier investment firm focused exclusively on the global higher education sector. UV pursues a differentiated strategy of 'innovation from within'. By partnering with top-tier universities and colleges, and then strategically directing private capital to develop programs of exceptional quality that address major economic and social needs, UV is setting new standards for student outcomes and advancing the development of the next generation of colleges and universities on a global scale.

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Three articles that tell us where the puck is going in higher education

1. The Inevitable Competency Marketplace EDUCAUSE Review article on how employer demands and advancing technology will drive change in higher education, by Jamie Merisotis. In today's quickly evolving credentials landscape, there's a need for a more dynamic way to showcase prospective hires' qualifications. Several approaches are tackling this need… [to] facilitate a new learning paradigm in which students build their reservoir of knowledge and skills through a lifetime of learning experiences. A college transcript doesn't sum up a student's learning; rather, what's needed—and now possible—is having a digital passport to showcase learning and accomplishments throughout a lifetime. Read more 2. Higher Education Is Indeed Unique Wall Street Journal report on higher education: the only sector in public finance to receive more ratings downgrades than upgrades last year, by Timothy Martin and Heather Gillers. The downgrades also serve as further evidence of a U.S. higher education system that has become increasingly bifurcated. Many schools are struggling with their bottom line as national enrollment falls, many Americans question the value of a college degree and state funding for many public institutions is drying up. Elite institutions, meanwhile, enjoy record levels of popularity with student applications and alumni donations. Read more 3. Stop Falling In Love With Your Product EdSurge op-ed on the many mistakes EdTech companies make with colleges and universities, by Bridget Burns. The most successful firms—those that gain market share based on referrals from happy customers—design products around the workflows and capabilities of colleges and universities. Their technology may not always be the best on the market, but it’s designed from the get-go to work in higher ed’s ecosystem. Read more