Posts published on August 25, 2015

Regulation For An Unbundled World: Nano, Stackable Degrees

Moving beyond college: Rethinking higher education regulation for an unbundled world

Michael B. Horn and Andrew P. Kelly

Key points

  • New “unbundled” higher education providers with modular, low-cost offerings powered by technology have begun to emerge, but they are constrained by the higher education regulatory system’s reliance on the traditional bundled model.
  • Policymakers could set up a path for these providers to receive federal aid in exchange for enhanced transparency on outcomes and cost, use independent authorizers to approve new providers and hold them accountable, or establish a market-entry regime based on labor-market outcomes and student satisfaction relative to an institution’s total expenditures.
  • Policymakers could also develop new financing approaches that may reduce taxpayer risk. They could require new providers to put up private capital to become eligible for federal aid and reimburse them if they exceed agreed-upon outcome targets or utilize tools like need-based grants and income-share agreements to spread risk across students and investors.
  • Policymakers may also simply wait for this emerging market to mature on its own and let consumer demand and competition drive innovation, though this pathway is slow and uncertain.

Read this publication online.

View a printable copy.