December 1, 2011

THE PRICE OF a college education keeps spiraling upward. Tuition is up 8.3 percent for in-state students at four-year public universities for the 2011-12 academic year, according to the College Board. Lest you think state budget cuts are solely to blame, tuition at four-year private colleges rose 4.5 percent at the same time. Both figures far outstrip the rate of inflation.

It’s true that federal student aid has also been rising; thanks largely to the 2009 American Opportunity Tax Credit, education tax credits and deductions have more than doubled, from about $7 billion in 2007-08 to $14.8 billion in 2010-11. Federal assistance offsets much of the recent price increases. But with college graduates leaving school with an average of $25,000 in debt, it’s no wonder that 57 percent of Americans told a recent Pew Research Center survey that college is no longer a good value — or that a group called the Occupy Student Debt Campaign demands the forgiveness of all student debt and threatens a mass boycott of debt payment if it doesn’t get its way.

President Obama has offered to help students stretch out payments, consolidate loans and reduce interest costs. But this is a palliative at best. Increasing federal tuition aid, whether loans or grants, has a counterproductive aspect: Enabling students to pay higher prices enables institutions to keep raising them.

The time has come for a vigorous attack on the cost side of this equation — as Education Secretary Arne Duncan urged in an important speech Tuesday. “I believe that postsecondary institutions and states also have yet to fully tackle the cost-containment challenge in a comprehensive and sustainable fashion,” the secretary said, noting that much higher-education spending is connected only remotely to the core mission of educating students. “Too many universities today actually have a perverse incentive to invest in expensive non-academic perks to drive rankings and attract students, like building gilded athletic centers and residential dorms.”

To this welcome dose of straight talk, Mr. Duncan added a call for more innovative use of technology when teaching large courses, accelerating the four-year degree schedule and awarding degrees based on demonstrated knowledge as opposed to accumulated course credits. And he suggested ways in which the federal government can encourage the adoption of such reforms: steering federal loan dollars to schools based on the graduation rates of low-income aid recipients, or offering grants that reward states and institutions for systematic reforms that increase graduation rates.

Though reminiscent in concept to Mr. Duncan’s Race to the Top program for boosting reform in K-12 education, these modest steps hardly amount to a revolution. Even if adopted, they would fall well short of a broader conditioning of federal support for higher education based on improved cost-effectiveness. But they would be steps in that direction and, as such, steps in the right direction.