INTRODUCTION

Over the last 30 years, college tuition has skyrocketed. From 1988 to 2018, tuition at public four-year institutions (in real terms) rose 213%. The numbers for private tuition are also stark, with a jump from 1988 to 2018. Students at public four-year institutions paid an average of $3,190 in tuition for the 1987-1988 school year, with prices adjusted to reflect 2017 dollars. Thirty years later, that average has risen to $9,970 for the 2017-2018 school year.

The price jump at private schools has also been significant. In 1988, the average tuition for a private nonprofit four-year institution was $15,160, in 2017 dollars. For the 2017-2018 school year, it’s $34,740, a 129% upsurge.

In response to the exponential surge in the cost of higher education, policymakers have focused increasingly on proposals to expand financial aid and loans, and canceling the vast sums of debt that college students have accumulated. Calls for canceling student debt are understandably popular with those burdened with those loans. But student loan forgiveness is a one-off gift to one generation of borrowers, that does nothing to prevent the problem from repeating itself year after year.

The first step to make college more affordable and expand access to more Americans is to increase price transparency about the true cost of college, and ensure prospective students get credit for college-level work they have completed before starting their degree.

Presently, students lack the information they need to make smart choices about if and where they should go to college. Colleges and universities are not transparent about the true cost of tuition and fees and are opaque about how much credit (if any) students can earn before enrolling (which in turn can reduce the cost). As a result, too many students aren’t getting the college credit they have earned and are being forced to pay and borrow more than they should.

As the pandemic abates, higher education institutions must commit to holding down the cost of tuition and helping students reduce the amount they have to borrow. For example, colleges should guarantee up to two semesters worth of credit for successful completion of Advanced Placement (AP), International Baccalaureate (IB), and college courses taken in high school. They should also make the transfer of credits from community colleges more seamless.

This paper offers a series of pragmatic steps policymakers could take immediately to curb college costs and borrowing. The federal government should use the leverage of billions in financial support for higher education to increase transparency around tuition price, credit transfers, and acceptances so that students can make more informed decisions around college costs:

1.) The White House should push for legislation that gives the Department of Education greater authority to establish policies for AP, IB, and dual enrollment course credit and ensure that these credits transfer automatically.

2.) Colleges should be required to disclose before a student matriculates the number of credits, including through AP, IB, or from community college coursework, that will be accepted.

3.) The Department of Education should require that colleges provide easy access to information on transfer credits.

4.) States should set clear standards for minimum tests scores on AP tests and GPA-level coursework required to earn college credits.

BACKGROUND

The skyrocketing cost of higher education has become a millstone around the necks of young Americans. More than one in five U.S. households hold a student loan, up from one in 10 in 1989.₁ According to the Bureau of Labor Statistics, the cost of college has increased by nearly five times the rate of inflation since 1983.₂

These increases depend on the type of institution a student attends, and tuition hikes have been most pronounced among four-year private universities_.3 Overall, researchers point to state disinvestment in colleges and rising administrative costs as key drivers of higher education costs.

The education debt crisis has disproportionately affected millennials₄, who are already saddled with lower wages and lingering economic pains from the Great Recession. Of young adults aged 25 to 34, or the bulk of millennials, approximately one-third hold a student loan.₅ Collectively, as of 2019, 15.1 million millennial borrowers hold $497.6 billion in outstanding loans.₆ Economists have pointed to this massive debt burden as a key reason why millennials are not buying houses, starting small businesses, or saving for retirement in the same way as past generations, and it is to the overall detriment of the economy.₇

 

Those who have borrowed for degrees are more likely to be lower-income, Black, and less likely to have family wealth to fall back on. Thus, they are more likely to default, exacerbating poverty and the racial wealth gap. According to the U.S. Department of Education, 20% of borrowers are in default, and a million more go into default each year. Two-thirds of borrowers who default never completed their college degrees or earned only a certificate and owe a comparatively low average amount of $9,625.₈ Those who default include veterans, parents, and first-generation college students.₉ This “debt with no degree” syndrome leaves borrowers in the hole without access to the earning power associated with a postsecondary degree.

Pell Grant recipients from lower-income households represent an exceptionally high percentage of defaulted borrowers. For example, close to 90% of defaulters received a Pell Grant at one point.₁₀ Of this group, even those who earned a bachelor’s degree are three times more likely to default than students from families that don’t qualify for a Pell Grant.₁₁

For young people who borrow heavily and get in over their heads, default often has catastrophic implications for future access to credit. Many have their wages garnished and tax records seized, starting adulthood and careers on the wrong foot.₁₂

DIMINISHING CREDIT FOR COLLEGE LEVEL COURSEWORK COMPLETED IN HIGH SCHOOL

More high school students are graduating with college-level coursework that could help alleviate some of these costs. High schools with AP and IB programs, as well as Early College high schools,₁₃ give students a head start on advance credits. But many colleges are not transparent about which of these credits will transfer once students matriculate.

According to data from the National Center for Education Statistics, nearly 71% of community college students intend to, at some point, pursue a baccalaureate degree.₁₄

Adding to their data, studies from the Center reveal that approximately 20-50% of new university students are actually transfer students from community college. As students move between institutions, they find it very difficult to navigate the system of credit transfers and agreements.

In fact, colleges have made it increasingly difficult to receive course credit for AP, IB, and work completed at community colleges.₁₅ Some schools (Dartmouth, Brown, and Williams, to name a few) have stopped granting course credit entirely for AP. Furthermore, only 20 states have statewide policies for AP course credit, and more often than not, those that do have statewide policies do not have a minimum score guaranteeing credit transfer.

Why are schools restricting the use of AP? Many claim AP courses are not an actual substitute for college courses. Yet most of these schools that restrict credit are willing to grant those same students’ waivers out of many college courses, which underscores that AP courses are perfectly acceptable substitutes for college courses. A more likely reason is revenue, as more and more schools have become dependent on tuition in order to keep operating.

 

HIGHER EDUCATION’S TRANSPARENCY PROBLEM

To say that higher education has a transparency problem is an understatement. No industry, with the possible exception of health care, makes it more difficult to compare costs and lock-in an actual price.

Many have long recognized this problem, but efforts to get schools to provide basic pricing information has lagged. For example, work conducted by researchers at the University of Pennsylvania noted that some colleges do not comply with federal rules requiring net-price calculators, while others offer “misleading,” “incomplete,” or dated information about price.₁₆

Another problem is inconsistent financial aid offers — sometimes loaded with obscure and overly complex language, or sometimes omitting the cost of attendance altogether, according to New America and uAspire’s report, Decoding the Cost of College.₁₇

Students looking for information on credits for Advanced Placement work or courses completed at community colleges often have to wait until they arrive on campus. Most schools have made it increasingly difficult to figure out how much AP credit will be awarded, with many leaving that decision to university and college departments. And more and more schools are offering only waivers or exemptions, instead of actual course credit that can reduce the cost of tuition.

What information schools do provide is often vague and confusing. As the reprint below of an agreement between Johns Hopkins and Prince George’s Community College on course transfers highlights, many school websites provide no more than a low-quality copy of legal language that raises more questions than it answers.

The federal government has attempted to address some of these issues, but most of these reforms have proven ineffective because neither party is willing to use the billions in federal support for higher education as leverage.₁₉

MAKING FEDERAL AID CONTINGENT ON PRICING AND ADVANCED CREDIT TRANSPARENCY

During his campaign, President-elect Joe Biden proposed creating a more seamless process for earning credit for college-level work completed prior to enrolling as an undergraduate (dual enrollment). The Biden administration should fast track this effort in two steps.

First, President Biden should direct the Department of Education to create a federal website where prospective undergraduates could access simple and clear information on the AP, IB, and dual enrollment policies of undergraduate institutions. Trying to find whether your AP test score or that community college class you took will earn you credit at a particular college is like looking for a needle in a haystack. Schools often bury this information on their website, or even worse, don’t provide it all. This lack of transparency can often deter prospective students from even trying to get credit for work that should qualify.

Second, the Biden administration should require schools that receive federal aid to provide admitted students with a detailed spreadsheet of how much credit they will or won’t receive from AP, IB, and dual enrollments prior to their matriculation. No student should have to wait until they arrive on campus to learn how many courses they need to take (and how much money they will have to spend) to graduate.

Accessing early college coursework opportunities can make high school more relevant, increase college-going, make higher education more affordable, and provide a financial lifeline to eligible colleges struggling with depressed enrollments. College-level coursework through AP, IB, and dual enrollment can be motivating to disadvantaged students. It facilitates completing a degree faster and at lower total cost to students and their families.

Of course, neither of these policies would reverse the impact of those colleges and universities that have made it increasingly difficult to get actual course credit for AP, IB, and work completed at community colleges. To truly bring down the cost of tuition and the debt burden on future students without relying completely on federal subsidies, a Biden-Harris administration will need to push for legislation that gives the Department of Education greater authority to establish policies for AP, IB, and dual enrollment course credit.

For example, colleges and universities should be prohibited from capping the amount of credits one can earn towards their degree outside from AP or community college coursework. As long as the students meet the minimum requirements, credit should be granted automatically.

In addition, schools would be required to agree to a universal minimum test score for all AP subject matter tests and a GPA level for coursework at a community college.

These two reforms would help millions of future college students reduce their tuition bill and get them into the job market or graduate school sooner.

 

 

CONCLUSION

Promises of massive debt cancellation and increased federal aid are popular with students, but they won’t fix the higher education system’s broken financial model. Instead, they’ll pour more taxpayer money into an opaque, high-inflation college sector and generate new waves of debtladen students and families. We need to break this pernicious cycle by rethinking transparency in higher education with a focus on bringing down costs through a more seamless and transparent process for credit transfers.

Policymakers should require increased transparency on AP and IB credits as part of acceptance packages, as well as ensure that credits transfer more easily between institutions. These will help students and families better plan for the cost of a postsecondary education, and reduce the bills for those who matriculate or transfer with college-level coursework.

 

ABOUT THE AUTHORS

Paul Weinstein Jr. is a Senior Fellow at the Progressive Policy Institute and Director of the Graduate Program in Public Management at Johns Hopkins University.

Veronica Goodman is the former Director of Social Policy at the Progressive Policy Institute.

 

REFERENCES

 

1 Venoo Kakar, Gerald Eric Daniels, and Olga Petrovska, “Does Student Loan Debt Contribute to Racial Wealth Gaps? A Decomposition
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2 “Not What It Used to Be,” The Economist, December 1, 2012, https://www.economist.com/united-states/2012/12/01/not-what-it-used-to-be
3 “The Rising Cost of College,” The Hamilton Project, December 3, 2010, https://www.hamiltonproject.org/charts/the_rising_cost_of_college.
4 “The Biden Plan for Education beyond High School,” Joe Biden for President: Official Campaign Website, August 2020,
https://joebiden.com/beyondhs/.
5 Ben Miller et al., “Addressing the $1.5 Trillion in Federal Student Loan Debt,” New America (The Emerging Millennial Wealth Gap, October
2019), https://www.newamerica.org/millennials/reports/emerging-millennial-wealth-gap/addressing-the-15-trillion-in-federal-studentloan-debt/.
6 Wesley Whistle, “The Emerging Millennial Wealth Gap,” New America (The Emerging Millennial Wealth Gap, October 2019),
https://www.newamerica.org/millennials/reports/emerging-millennial-wealth-gap/millennials-and-student-loans-rising-debts-and-disparities/.
7 Christopher Ingraham, “Millennials’ Share of the U.S. Housing Market: Small and Shrinking,” The Washington Post, January 20, 2020,
https://www.washingtonpost.com/business/2020/01/20/millennials-share-us-housing-market-small-shrinking/.
8 Ben Miller et al., “Addressing the $1.5 Trillion.”
9 Colleen Campbell, “The Forgotten Faces of Student Loan Default,” Center for American Progress, October 16, 2018,
https://americanprogress.org/article/forgotten-faces-student-loan-default/.
10 Ben Miller, “Who Are Student Loan Defaulters?”, Center for American Progress, December 14, 2017,
https://americanprogress.org/article/student-loan-defaulters/.
11 Ben Miller et al., “Addressing the $1.5 Trillion.”
12 Ben Miller et al., “Addressing the $1.5 Trillion.”
13 Joel Vargas, Caesar Mickens, and Sarah Hooker, “Early College,” Jobs for the Future, https://www.jff.org/what-we-do/impact-stories/
early-college/.
14 Ellen M. Bradburn, David G. Hurst, and Samuel Peng, “Community College Transfer Rates to 4-Year Institutions Using Alternative
Definitions of Transfer,” U.S. Department of Education (Research and Development Report, June 2001), https://nces.ed.gov/
pubs2001/2001197.pdf.
15 Paul Weinstein, “How Biden Can Cut the Cost of College,” Forbes, December 14, 2020, https://www.forbes.com/sites/
paulweinstein/2020/12/14/how-biden-can-cut-the-cost-of-college/?sh=43214ce936a8.
16 Laura W. Perna, “It’s Time to Tell Students How Much College Costs,” The Hill, May 18, 2021, https://thehill.com/blogs/congress-blog/
education/553650-its-time-to-tell-students-how-much-college-costs.
17 Stephen Burd et al., “Decoding the Cost of College,” New America, June 5, 2018, https://www.newamerica.org/education-policy/policypapers/decoding-cost-college/.
18 Paul Weinstein, “Diminishing Credit: How Colleges and Universities Restrict the Use of Advanced Placement,” Progressive Policy Institute,
September 2016, https://www.progressivepolicy.org/wp-content/uploads/2016/09/MEMO-Weinstein-AP.pdf.
19 “Two Decades of Change in Federal and State Higher Education Funding,” The Pew Charitable Trusts, October 15, 2019, https://www.
pewtrusts.org/en/research-and-analysis/issue-briefs/2019/10/two-decades-of-change-in-federal-and-state-higher-education-funding.

INTRODUCTION

For much of the last two decades, beginning with the passage of No Child Left Behind (NCLB) in 2002, our top political leaders have shown concern about children stuck in failing public schools. NCLB required districts to do something — not enough, but something — about those schools. Presidents George W. Bush and Obama both called education “the civil rights issue of our time.” And President Barrack Obama’s Race to the Top and School Improvement Grants created incentives for states and districts to act.

Some states went further than others. New Jersey and Massachusetts took over entire school districts. Louisiana created a Recovery School District (RSD) to take failing schools from their districts and hand them to charter operators. Indiana passed a law allowing the state Department of Education to do the same. Tennessee, Michigan, North Carolina, and Nevada emulated Louisiana’s RSD, to one degree or another.

Predictably, the bureaucracy fought back. School boards, district administrators, and teachers unions all objected. Adult jobs were at risk, after all, and adults vote, while children don’t. In 2015 Congress backed down, replacing NCLB with the Every Student Succeeds Act (ESSA), which, despite its name, significantly reduced the pressure on districts to do anything meaningful about failing schools. As the teachers unions ramped up their pressure, Michigan killed off its takeover district, Georgia’s governor tried to create a takeover district but was defeated at the polls, Nevada killed off its Achievement School District, and North Carolina’s Innovative School District took over just one school. Just recently, the Indiana legislature repealed its legislation authorizing the state to take over failing schools.

Yet millions of children still languish in low-performing schools, where they are less likely to develop the skills or habits necessary to get into college or the military or succeed in anything but low-paying jobs. Most of them are from low-income families, many of them Black or Brown.

This should be a national scandal. In the era of Black Lives Matter, it should be the civil rights issue of the day. But with the glare of publicity focused on other, equally appalling problems — on police officers who kill unarmed Blacks and legislatures that restrict voting rights — it is not. That’s a tragedy, because Black minds matter, too.

If you are a governor, legislator, education commissioner, or district leader who wants to help low-income and minority children get a decent education, what can you do? We still have far too many schools that fail their students year after year. Is increased “support” of the kind suggested by ESSA enough to generate significantly better outcomes? Not often, according to the research data.

Takeover districts with wholesale replacement of existing schools can work, but the political backlash they unleash makes elected leaders leery of them. In their absence, state leaders should do two things. First, make it painful for districts to let their worst schools stagnate, by closing them, handing them to nonprofit operators, or appointing a new school board. Experience shows that district leaders will scramble to avoid such outcomes. Second, give districts an attractive path to turn those schools around by encouraging them to create “innovation zones,” in which schools have the flexibility they need to change, and ensuring that those schools are accountable for performance by appointing a zone oversight board that can replace them if they fail or help them replicate if they succeed. The zone board’s job would be to do whatever it takes to turn the schools around: bring in new principals, replace staff — replace everyone at the school, if needed — even bring in a proven outside operator, such as a charter management organization, to run the school. States should encourage this with a carrot: roughly $1,000 extra per pupil, per year, for zone schools, for the first three-to-five years.

An independent, appointed zone board, organized as a not-for-profit 501(c)3 organization, would ensure that when schools continue to struggle, something is done about it. Typically, when this happens, boards replace principals. If failure continues for several years, they should have the authority to replace entire schools. Elected school boards have proven reluctant to replace schools, for fear of the blowback. Turnout at school board elections is often under 10%, which means a few hundred angry voters can defeat a board member. And nothing creates angry voters quite like closing and replacing a familiar neighborhood school, even if it’s doing a poor job.

We have learned, over the past three decades, that with few exceptions, real change will not occur unless it is driven by local leaders. Innovation zones are locally owned: They require approval by the elected school board, their members are usually prominent local civic, community, and philanthropic leaders, and some of the schools remain in the hands of local principals. The zones give local leaders a workable structure, and the carrot and stick give them an incentive to act. Such zones are succeeding in cities as diverse as Springfield, Massachusetts, South Bend, Indiana, Los Angeles, and several Texas cities: Waco, Ft. Worth, and Lubbock. Other places are even using them to help a group of decent schools go from good to great.

Creating effective innovation zones is not necessarily easy. But after decades of trying different strategies to help children trapped in failing schools, it appears to be our best bet.

 

WHAT HAS NOT WORKED

Between 1989 and 1995, New Jersey pioneered a new strategy to deal with districts full of failing schools: state takeover of school districts in Jersey City, Paterson and Newark. Since 1989, 29 states have passed legislation allowing such takeovers, and at least 22 have tried it. Most have not been very successful. Only in cases where those appointed by the state have a clear improvement strategy and the political power to impose it has takeover yielded significant improvement.

Massachusetts had some success when it helped Boston University take over Chelsea’s school system in the late 1980s. Almost 25 years later, the state took over the Lawrence schools and also produced significant improvement. In contrast, New Jersey’s takeover districts languished for decades. Only when the state embraced rapid expansion of charter schools as its strategy in Newark did that district begin to turn around. New Jersey then pursued the same strategy in Camden, with equally significant results.

But most takeovers come with no coherent strategy and achieve little. Legislators in both parties are pushing to repeal Ohio’s takeover law, and in most states, the current political climate makes takeover a non-starter.

In 2003, Louisiana pioneered another approach. Its legislature created the Recovery School District (RSD), a statewide school district to take over failing schools and hand them to charter operators. After Hurricane Katrina in 2005, it voted to place more than 100 New Orleans public schools — all those performing below the state average — in the RSD. As I documented in Reinventing America’s Schools, this strategy produced the most rapid improvement of any city in the nation.

Governors and legislators in other states took note, and soon there were bills to emulate the RSD in a handful of other states. In Michigan, the governor created the Educational Achievement Authority in 2011, but he could never persuade the legislature to authorize it or fund it properly, so it remained small and unsuccessful, until the legislature killed it. Virginia passed a bill creating an Opportunity Education Institute in 2013, but the courts ruled it unconstitutional, “because it was created by the general assembly rather than by the state board of education, and because it superseded local district control,” as one analyst summed it up. Nevada passed an Achievement School District in 2015, but it was underfunded and the Democrats abolished it as soon as they took control of the legislature in 2019. North Carolina passed a similar bill in 2016 but limited the new district to five schools, and by 2021 it had taken charge of only one school, amid considerable pushback from districts. Georgia Governor Nathan Deal proposed an “Opportunity School District” and secured a two-thirds vote in the legislature to put it on the ballot as a constitutional amendment in 2016. But after an expensive campaign against it by the teachers unions, 60% of voters opposed it.

The one robust effort to emulate the RSD occurred in Tennessee. In 2010, Tennessee’s legislature created an Achievement School District (ASD), to take over the state’s worst schools. The bill also allowed districts to create innovation zones for low-performing schools and grant them significant flexibilities. Because this strategy showed such promise in its early years, it is worth examining its experience in some detail.

 

TENNESSEE’S ACHIEVEMENT SCHOOL DISTRICT AND INNOVATION ZONES

Tennessee’s strategy was particularly aggressive in Memphis. By 2016 the ASD had taken over 29 of Memphis’s more than 150 district-operated schools. The ASD turned 23 of these schools over to charter operators, recruited from all over the country, and ran six itself. Unlike Memphis’s other charters, ASD charters were neighborhood schools, not schools of choice. Their students were among the poorest in the district, both in terms of finances and academic performance.

Meanwhile Shelby County Schools (SCS), Memphis’ school district, had moved 21 schools into an Innovation Zone, on its own initiative. In its “iZone”, as it quickly became known, the district lengthened the school day by an hour, using federal School Improvement Grant funds to pay for it. After that money ran out before the 2015-16 school year, the district turned to grants, donations, and its regular budget.

District leaders recruited their best principals to take over iZone schools and gave them the authority to hire staff, and those principals recruited the best teachers they knew. Teachers could earn bonuses based on student performance, and their schools provided intensive support and coaching. Principals were not constrained by union contracts, because Tennessee teachers no longer had collective bargaining rights. All teachers had to re-apply for their jobs once their school entered the iZone, a reality that led to hundreds of layoffs. But once a teacher was rehired and had tenure, firing was still difficult.

There were other limits on autonomy: iZone schools had only about half the autonomy a charter school enjoyed. Principals didn’t control most of their budgets, for instance, and they could choose their own curricula and assessments only if their first-year test scores were above a certain threshold.

But both the ASD and the iZone thrived in their first three years. ASD schools struggled during their first year with high student turnover and discipline issues, but later improved. Tennessee uses a Value-Added Assessment System (TVAAS) to measure student growth, which factors in students’ socioeconomic status. It rates schools on a scale of one (slowest growth) to five (fastest). In 2015, second- and third-year ASD schools averaged level five, while first-year schools averaged level one.

Innovation Zone schools showed faster academic growth than the ASD for their first two years, but in 2014-15 the ASD outpaced them. By 2016, seven iZone schools had improved enough to jump off the “priority list” — the bottom 5% of schools in the state, by performance. Unfortunately, those results came at the expense of district schools that lost talented principals and teachers to the iZone. Predictably, they showed declining performance.

Still, the combination of the iZone and the ASD gave Memphis a more aggressive strategy to deal with its worst public schools than almost any other city. Of the 69 priority schools identified in Memphis in 2012, by 2016 only a handful had escaped some intervention: 28 had been taken over by the ASD, 21 had been moved into the iZone, and 13 had either been closed or consolidated with other schools.

But taking over schools and closing schools generates fierce political resistance, and Memphis was no exception. As a result, according to Chris Barbic, the ASD’s first superintendent, by 2015 Governor Bill Haslem had retreated from his initial support for such aggressive strategies. Disappointed, state Education Commissioner Kevin Huffman departed, and his successor, Candice McQueen, was more intent on mollifying superintendents and principals than taking over schools. Reading the tea leaves, Barbic left the ASD in early 2016. The commissioner never allowed Barbic’s replacement to follow through on ASD plans to spin off its direct-run schools into a new charter management organization, nor to replace struggling ASD schools with stronger operators. Nor did the state place any more failing schools in the ASD. Its performance stagnated — some ASD schools excelled, others lagged far behind. Within a few years, many in the state considered it a failure.

Read the full report.