Imagine you go to buy a new car, and you want to know whether it’s worth the sticker price. Would you prefer to learn how well it runs - how smoothly it operates, how frequently it’s likely to need repairs and what kind of gas mileage it gets - or how it was made?
Most likely you’re interested in the quality of the car, not what went into producing it. End results are what matter in buying decisions. But when it comes to picking a college, information is strangely skewed toward input rather than outcome.
The United States, unlike many developed countries, offers no direct government oversight of the quality of postsecondary institutions. Instead, this task is outsourced to a group of private accrediting agencies. These agencies must themselves be recognized by the Department of Education, but they are free to set their own standards. Accreditation is significant both because it is a source of information for potential students and because it is a requirement for receipt of federal financial support.
Nationally recognized accrediting agencies exist both for entire institutions and for specialized subject-specific programs. The institutional accrediting agencies are largely limited in scope by region, with a different agency, each with its own standards, assessing schools based on their locations.
Administrators and faculty dominate the accreditation process. In most cases, students and the general public have only a token role at best. For example, the Middle States Commission on Higher Education, which is responsible for assessing schools in Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania, Puerto Rico and the U.S. Virgin Islands, describes itself as a “voluntary, non-governmental, membership association” with the goal of “self-regulation and peer-review.” The commissioners are nearly all university administrators or professors, and the evaluators are “experienced professionals from across higher education” who “volunteer their time and expertise.” Similarly, the Southern Association of Colleges and Schools Commission on Colleges is run by an executive committee made up of “the Chair, a public member, and a representative from each of the eleven Southern states” for which the Commission is the recognized accrediting agency.
It is little surprise, therefore, that these agencies mainly investigate the things that matter to administrators and faculty. These are not necessarily the same things that matter to students when they pick a college or to the government in determining whether an institution merits financial support.
While the Middle States Commission’s “Characteristics of Excellence in Higher Education” handbook states that “the assessment of student learning is an essential component of the assessment of institutional effectiveness,” it offers little in the way of concrete guidelines for what constitutes an appropriate level of student learning. The idea that job placement, student earnings, overall and four-year graduation rates, inbound and outbound student transfers, college loan default rates or post-graduation satisfaction surveys could measure institutional success does not seem to be one that many accreditors have entertained.
Less than crystal clear standards for judging institutional success could be acceptable if the accrediting agencies also provided enough raw information for students and the government to make their own informed decisions independently. This isn’t the case. Accreditation is a yes-or-no game, and the information the decisions are based upon is generally kept confidential.
Through the accrediting agencies, established institutions can entrench their existing methods and cost structures, suppressing competition from new approaches to teaching and learning. As an abstract of a study from the not-for-profit Center for College Affordability and Productivity (CCAP) puts it, “Because federal financial assistance is tied to accreditation, the accrediting agencies are gatekeepers as to who can offer higher educational services. The cost of achieving accreditation is often high, a big barrier to entry to new, smaller schools.”
The result is a system in which colleges are judged by how much money they put into their programs, rather than how much students get out of them. Universities are given free rein to invest in ways that benefit their administrators and faculty, rather than their actual customers: the students who pay tuition and the federal government that helps subsidize that tuition. This helps to explain why, in many fields and instances, educational costs are rising at a rate that seems to be unrelated to the economic benefit that such education provides.
Faculty and administrators have an interest in creating excellent and successful institutions, of course. So do students and the government that helps to finance their education. Their interests in the process are not identical, however, and their power within the accrediting bodies that set higher education standards is grossly unequal.
As long as the federal government uses accreditation to determine how to allocate taxpayer support, it needs to ensure that accreditation actually works as a useful indicator of which institutions can provide a good return on that money. Andrew Gillen, Research Director for the CCAP, explains in a blog post, “Accreditation is currently being used to determine if colleges are fulfilling the government’s goals in providing public money. But accreditation is not primarily concerned with the government’s goals, and is therefore not doing an adequate job of ensuring that they are met.”
The first step would be to take the accreditation process out of the hands of the institutions. As in most other developed countries, the government should set the basic standards that schools must meet to make their students eligible for federal subsidies. Universities could continue to operate their own standard-setting bodies as well, and many would no doubt argue that their own standards are already higher than those that the government would set. Their argument would have more force if they made those standards transparent and their evaluations of specific institutions publicly available.
My guess, however, is that, given a choice between input-based standards and outcome-based standards, most students, like most car shoppers, would turn to the accreditation lists that could tell them what they can expect to get for their money.
Reforming accreditation procedures would not, by itself, resolve the problem of spiraling education costs. It would, however, be an important step in shifting the focus of education from the values of the suppliers to the values of their customers. The current system helps protect against diploma mills, but it does not prevent schools from becoming tenure mills, research mills and student loan mills. These are not the things students want, or should be expected, to pay for.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
Imagine you go to buy a new car, and you want to know whether it’s worth the sticker price. Would you prefer to learn how well it runs - how smoothly it operates, how frequently it’s likely to need repairs and what kind of gas mileage it gets - or how it was made?
Most likely you’re interested in the quality of the car, not what went into producing it. End results are what matter in buying decisions. But when it comes to picking a college, information is strangely skewed toward input rather than outcome.
The United States, unlike many developed countries, offers no direct government oversight of the quality of postsecondary institutions. Instead, this task is outsourced to a group of private accrediting agencies. These agencies must themselves be recognized by the Department of Education, but they are free to set their own standards. Accreditation is significant both because it is a source of information for potential students and because it is a requirement for receipt of federal financial support.
Nationally recognized accrediting agencies exist both for entire institutions and for specialized subject-specific programs. The institutional accrediting agencies are largely limited in scope by region, with a different agency, each with its own standards, assessing schools based on their locations.
Administrators and faculty dominate the accreditation process. In most cases, students and the general public have only a token role at best. For example, the Middle States Commission on Higher Education, which is responsible for assessing schools in Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania, Puerto Rico and the U.S. Virgin Islands, describes itself as a “voluntary, non-governmental, membership association” with the goal of “self-regulation and peer-review.” The commissioners are nearly all university administrators or professors, and the evaluators are “experienced professionals from across higher education” who “volunteer their time and expertise.” Similarly, the Southern Association of Colleges and Schools Commission on Colleges is run by an executive committee made up of “the Chair, a public member, and a representative from each of the eleven Southern states” for which the Commission is the recognized accrediting agency.
It is little surprise, therefore, that these agencies mainly investigate the things that matter to administrators and faculty. These are not necessarily the same things that matter to students when they pick a college or to the government in determining whether an institution merits financial support.
While the Middle States Commission’s “Characteristics of Excellence in Higher Education” handbook states that “the assessment of student learning is an essential component of the assessment of institutional effectiveness,” it offers little in the way of concrete guidelines for what constitutes an appropriate level of student learning. The idea that job placement, student earnings, overall and four-year graduation rates, inbound and outbound student transfers, college loan default rates or post-graduation satisfaction surveys could measure institutional success does not seem to be one that many accreditors have entertained.
Less than crystal clear standards for judging institutional success could be acceptable if the accrediting agencies also provided enough raw information for students and the government to make their own informed decisions independently. This isn’t the case. Accreditation is a yes-or-no game, and the information the decisions are based upon is generally kept confidential.
Through the accrediting agencies, established institutions can entrench their existing methods and cost structures, suppressing competition from new approaches to teaching and learning. As an abstract of a study from the not-for-profit Center for College Affordability and Productivity (CCAP) puts it, “Because federal financial assistance is tied to accreditation, the accrediting agencies are gatekeepers as to who can offer higher educational services. The cost of achieving accreditation is often high, a big barrier to entry to new, smaller schools.”
The result is a system in which colleges are judged by how much money they put into their programs, rather than how much students get out of them. Universities are given free rein to invest in ways that benefit their administrators and faculty, rather than their actual customers: the students who pay tuition and the federal government that helps subsidize that tuition. This helps to explain why, in many fields and instances, educational costs are rising at a rate that seems to be unrelated to the economic benefit that such education provides.
Faculty and administrators have an interest in creating excellent and successful institutions, of course. So do students and the government that helps to finance their education. Their interests in the process are not identical, however, and their power within the accrediting bodies that set higher education standards is grossly unequal.
As long as the federal government uses accreditation to determine how to allocate taxpayer support, it needs to ensure that accreditation actually works as a useful indicator of which institutions can provide a good return on that money. Andrew Gillen, Research Director for the CCAP, explains in a blog post, “Accreditation is currently being used to determine if colleges are fulfilling the government’s goals in providing public money. But accreditation is not primarily concerned with the government’s goals, and is therefore not doing an adequate job of ensuring that they are met.”
The first step would be to take the accreditation process out of the hands of the institutions. As in most other developed countries, the government should set the basic standards that schools must meet to make their students eligible for federal subsidies. Universities could continue to operate their own standard-setting bodies as well, and many would no doubt argue that their own standards are already higher than those that the government would set. Their argument would have more force if they made those standards transparent and their evaluations of specific institutions publicly available.
My guess, however, is that, given a choice between input-based standards and outcome-based standards, most students, like most car shoppers, would turn to the accreditation lists that could tell them what they can expect to get for their money.
Reforming accreditation procedures would not, by itself, resolve the problem of spiraling education costs. It would, however, be an important step in shifting the focus of education from the values of the suppliers to the values of their customers. The current system helps protect against diploma mills, but it does not prevent schools from becoming tenure mills, research mills and student loan mills. These are not the things students want, or should be expected, to pay for.
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