A group with Louisiana connections has delivered advice on how to restructure student financing of college education, and while much of it addresses federal policy, if the basic theory behind it is heeded beyond its issues of execution, it will have ramifications both for state policy and the way Louisiana delivers public higher education.

The group American Dream 2.0, with a diverse group of individuals overseeing the publication of a report concerning financial aid, including Southern University System Pres. Ronald Mason and National Urban League Pres. Marc Morial, formerly New Orleans mayor, lists as its overall philosophy making policy where financial aid becomes a motivator of success, not as a fertilizer cast about in the hope of student success springing forth. That would create a fundamental change not just in this task, but in the very operational ideology of public higher education.

The current system began in 1970, first with the start of the Pell Grant program that shovels unrestricted cash at students, which supplemented the recent dramatic expansion of government-backed student lending, then complemented by court decisions against intelligence testing for employment that made a college degree the de facto credential needed to work in higher-status/income occupations. In short, this created a boon for higher education, a seller’s market that resulted in rapid expansion that has continued to this day, and only encouraged when income restrictions were dropped from federal student lending in 1992.

It also created every incentive to the price of higher education to go sky high. Since 1985, average tuition and fees for higher education has increased about six-fold, or more than four times the rate of increase of prices in general. While universities naturally added staff to accommodate increased enrollments – which increased in that time span from 10.6 million to 21 million – the rate of tuition increase was three times the doubling of enrollment.

Because it was a seller’s market and with cheap if not free government money at all levels available to subsidize buyers, higher education found it could raise tuition and fees with impunity, and gave it far more resources than necessary to add additional capacity. This additional money began to work its way into sparkling facilities and the addition of some ancillary to education, creation of a variety of new programs beyond traditional core subjects with many not connected to market-driven forces, vast expansion of staff and administrative positions, and in lowering teaching loads and providing more benefits to faculty members separate from the teaching function.

One of these was a sharply increased emphasis on research production as the means by which to evaluate faculty performance. Driven by these abundant resources and by the inherent difficulty in judging teaching outcomes in many areas as a way to distinguish performances, this made for easier quantification by which to judge faculty worth in hiring and promotion/tenure (but not in discharge; unless you were caught with a live boy or dead girl and vice versa, couldn’t speak English well, or committed a felony it was unlikely anyone ever receiving tenure would be discharged, regardless of teaching ability or research output).

The influential place that research output has in faculty review is not without merit in many cases where it has practical import, meaning principally in the science, technology, engineering, and mathematics disciplines. But even in these it has become overemphasized at the expense of teaching, as nonprofit organizations and the private sector provide plenty of opportunities and results in research and can more than carry the load for innovation in these crucial areas.

As for other areas, the emphasis on research long ago superseded any meaningfulness as a metric in judging overall faculty quality. Evidential that it has assumed an unwarranted dominance comes from the fact that in the 1970-2005 period published research output in the area of the social sciences increased on average 7 percent per year, implying an over ten-fold increase over that span that cannot help but drift into minutiae, extreme tangents, re-explication if not reinvention of the wheel countless times, and in pursuit of theory that strains observations of common sense or face validity in the real world.

These are the places the cascade of money went, which vary from tangentially to hardly affecting the quality of instruction. But recently times may be changing, as college enrollment actually dipped in 2011 in a contradictory climate. Typically, as American suffers through a fifth year of negative economic growth to, at best, historically slow growth, periods such as this typically grew college enrollments as people in an inferior job market returned to school or extended their stays in it, both encouraged by government subsidization of costs. Yet today they may no longer exhibit this behavior, precisely because increasingly they are rejecting the option as too little return for the cost involved, even when it is subsidized.

As the Pres. Barack Obama economy continues to promise dimmer futures for all but those co-opted into its ideology of increased government management of outcomes, the payoff from higher education is seen as lower. And even if subsidized, students bear some costs which only increase as does tuition and fees as their resources stagnate. To sum, the government-inflated tuition levels, readily exploited by higher education in a manner too often inconsistent with its primary responsibility of educating in a quality manner, have created an unsustainable financing model for higher education at its present level of consumption and the philosophy that guides it.

Into this environment comes the group’s plan, which more specifically proposes to limit financial aid programs only to the neediest students and to link federal aid to degree completion. The former idea invites means-testing more forcefully into the equation, while the latter involves paying grants, and for a minimum of 15 hours per semester (higher education in most majors steadily has moved towards a 120-hour standardization) rather than the current 12, only after the completion of the semester, and with aid given to schools that meet some minimum qualification in terms of completion rates in a defined time span.

To some degree, this agenda addresses an atmosphere that envisions no large increases in government money coming in the form of aid and provides an avenue of incentive to have higher education concentrate more on teaching, because it is assumed that higher quality instruction and more of it, along with emphasis on steering students into programs that they can complete and become employed as a result of that completion, will boost completion statistics, which today are not much above 50 percent. But it only goes halfway, which threatens that it would end up doing little good.

In part, this is because the two main ideas cancel each other to some degree. With the tying of grants to need, it intends to replace a potentially falling source of revenue, federal government subsidization, with another untapped one: families’ resources. This provides no incentive for universities to steer resources more towards teaching and thereby miss on the increased emphasis that could increase completion, contradicting the intent of the tying of aid to outcome.

Perhaps tying even reduced government subsidization would be enough to spur changes overall – if it were not possible for higher education to game the system the recommendation would create. For the easiest way to boost completion is to make completion easier, by lowering standards. While this could not be done universally – some degrees tie to professions where they serve as crucial preparation for licensing – a decline in standards in courses backing programs of study that face no external judgment in relation to a defined career path easily could happen, entirely subverting the intent of the reformers to have higher completion with quality. Worse, it could cause universities to provide incentives to place students in those areas that could be gamed, which are less likely to produce graduates in areas with the greatest demands.

Thus, to tie genuinely financing mechanisms to outcomes, these reforms must go further. Government could create a basic grant available to all who meet a certain academic standard at the end of secondary education, based on grades and standardized test scores, designed only to provide a basic tuition level. All would receive this, but those who did better could qualify for more, perhaps up to the current Pell Grant level ($5,500 maximum).

This would be a one-time deal. The remainder of financing would come from loans in the manner the group envisions, i.e. their proceeds come only after a successful term completion. Thus, the initial grant covers the first term costs, and successful completion produces funds for the next. Only five years worth are covered (with exceptions for programs that take longer to complete, extraordinary extenuating circumstances, etc.).

Outcomes also would matter – but measured by success in finding full-time employment. Schools would be required to track graduates, who would indicate whether they are seeking work and their success in finding full-time work (or full-time graduate student placement) and in what occupation. Institutions that don’t meet a certain standard face sanctions in their abilities to draw aid for students. This marketplace-driven evaluation reduces the ability of schools to game the system, as the market’s thirst for quality and proper supply of graduates to match labor demands will prevent erosion of standards.

As for Louisiana, to formulate a similar kind of regime, it would provide minimal GO Grants on the basis of basic demonstrated achievement and make it Taylor Opportunity Program for Scholars a true scholarship program with graduated awards on the basis of superior demonstrated achievement, based upon the cheapest tuition levels in the state, with money awarded after successful semester completion. The changing of award dates would go a long way to resolving a frequent policy-maker complaint that some students with the award do poorly and then fail to graduate, in effect wasting the money; this way, they get it only if successful with incentive to keep going to completion.

However flawed the execution of their basic notion of success in outcomes drawing aid, that remains a worthy policy to implement. Even if the federal government does not reform itself this way, there’s no reason Louisiana could not for itself.