Making the Higher Education Market Work For Students And Taxpayers

October 7th, 2014

Andrew Kelly and Kevin James, American Enterprise Institute

Key points

  • US policymakers are more concerned with ensuring individuals’ access to US postsecondary institutions than with the educational value of enrollment, which contributes to discouraging labor market success and loan repayment rates among America’s university and college graduates.
  • Policymakers must examine the building blocks of the quality-assurance system for higher education–characterized by consumer choice coupled with a hands-off regulatory approach built on accreditation–to diagnose which elements have benefited students and which have fallen short.
  • While it is tempting to substitute federal power for the failures of the higher education market and accreditation system, such an approach would likely fail to ensure quality and would undermine positive aspects of the current system.
  • Reformers can help ensure positive educational outcomes and foster innovation in the higher education system by thinking more broadly about who can act as authorizers and accreditors of academic quality, who bears the risk when students fail to pay back their loans, and how to best equip consumers to choose the right universities or colleges.

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