Academic journal article AEI Paper & Studies

Inputs, Outcomes, Quality Assurance: A Closer Look at State Oversight of Higher Education

Academic journal article AEI Paper & Studies

Inputs, Outcomes, Quality Assurance: A Closer Look at State Oversight of Higher Education

Article excerpt

Executive Summary

Amid growing concerns about the quality and cost of American higher education, policymakers are searching for reforms that can both increase the supply of affordable and effective postsecondary options and maintain consumer protection. Much of the focus has tended toward the federal student aid programs and policies that govern access to those programs. Though states play an important role in authorizing postsecondary institutions to operate in their state, observers have paid comparatively less attention to how they carry out that responsibility.

This paper aims to present lessons for regulatory reform by examining how states organize their authorization process. The intent is not to summarize every aspect of each state's authorization policy, as states differ tremendously in how they structure their approval pathways for institutions. Instead, the goal is both to draw out broad patterns across states and, where useful, to identify specific examples of states that have taken a unique approach--for better or worse--to the regulatory process. We examined different dimensions of state statute and regulation and combined that information with insights from various experts who navigate these processes every day.

This paper explores:

* Who is involved in state authorization processes? Since board members and staff can have significant influence over the implementation of a policy, we looked at the people who oversee state authorization processes. States rely on a variety of entities to carry out this role, from existing state agencies or boards to separate boards created specifically for this purpose.

* What do state authorizers require of new institutions? We reviewed the common features of state authorization processes that govern new applicants, first coding "input" requirements--faculty qualifications, facilities and equipment, and academic programs--that authorizers usually require of institutions. We also looked at various state boards' timelines, fees, and required consumer-protection mechanisms, such as refund policies, surety bonds, student-protection funds, and complaint procedures.

* What do authorizers measure in the renewal process? We examined state renewal processes with an eye toward the extent to which states measure performance outcomes--graduation rates, job-placement rates, wage data, default rates, and so on--and base renewal decisions on those outcomes. Overall, most states require providers to report on student outcomes. However, interviewees suggested that few states actually renew authorizations on the basis of those outcomes.

The paper concludes by recommending a better way for states to authorize postsecondary institutions: a risk-based approach, in which state authorizers would focus their resources on cases that pose the most risk to consumers. Authorizers could set up oversight boards independent of the political process and the existing higher education system in the state, require new entrants to provide basic documentation to establish a minimum level of seriousness, and have a well-designed set of consumer protections to weed out poorly structured or fraudulent institutions. In particular, states could require organizations to put up private capital as insurance against failure, which would also help to separate serious providers from diploma mills.

Once an authorized institution begins to enroll students, regulators should be on the lookout for alarms--outcome measures that might trigger a more in-depth investigation of a potentially troubled institution. Because some of these data are not readily available, states should take steps to invest in the necessary infrastructure, such as connecting wage information from unemployment insurance databases to postsecondary-enrollment information. State regulators could then use those data to renew organizations that have proven successful and to weed out those that have not. …

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