Improving Accreditation Part III: Innovation Through Alternatives

This is the third post in a series on improving accreditation. Previous entries are available here and here.

Proposals for controlling college costs typically follow two tracks. On one are calls for redistributive fixes that would get states to spend more money on their public institutions, increasing subsidies and decreasing tuition for students and families. The other is a market based approach, one that argues new entrants can offer education at a lower cost and compete with existing providers on quality.

A market-based approach will only work though if actors with cost structures that are radically different from existing institutions can operate. But creating such a space must also incorporate lessons from past expansions of new providers, particularly for-profit education, to ensure entrants are guided by a proper oversight system that does not present the same opportunities for hypergrowth and its accompanying reduction in quality.

The existing accreditation is simply not equipped to handle this kind of innovation. Nor is it particularly fair to add yet another mission to a set of agencies that already have extensive responsibilities. Instead, what’s needed is an alternative system of accreditation, one that would not compete with the current options but rather create a path for overseeing radically different postsecondary actors.

Four Design Questions

The concept of an alternative system of accreditation is a popular one on both sides of the aisle, from President Obama to Senators Marco Rubio (R-FL) and Mike Lee (R-UT). But neither set of ideas have gained much momentum. There’s a host of reasons for this, but part of the problem is a lack of details in how such a system would practically work.

In particular, an alternative accreditation system needs to make four design choices: what it would approve, how approved entities would have to be structured, how quality would be determined, and how it would interact with federal student aid.

1) Approve Programs, not courses

What alternative accreditation would approve is the most crucial question from which all other structures proceed. Proposals such as those from Sen. Lee suggest a course-based accreditation model, in which individual classes could gain access to federal aid. This ultra-granular approach has the benefit of maximizing available options and makes it very easy for super-specialized providers to get involved. For example, a mathematics professor could get accredited for a single calculus course.

But a course-based system would almost certainly become an unmanageable choice disaster. For one, it would exponentially expand the number of possible providers, likely taxing any alternative system to the point that it could do little more than offer a rubber stamp. Second, providers attempting to aggregate courses into some kind of higher-order credential would struggle to verify quality across so many options.  Third, we know that students already struggle to navigate course choices within a single institution. Dramatically expanding the options and then hoping students can cobble together something approaching coherence is overly optimistic for all but the most talented individuals (who probably want to attend elite institutions anyway).

A course-based system would also bring operational challenges for working within the federal student aid programs. While this system should be less burdensome in terms of what providers have to show to their approval agency, taking federal dollars will inherently come with basic accounting strings. Even a simplified version of that is still going to entail setting up things like special accounts for holding the federal funds and using disbursement systems to get aid to students. Expecting one-off course providers to do all that at any reasonable cost is unlikely.

An alternative system would therefore be better suited to operate at the program level. Looking at program quality would ease concerns since evaluators would know that providers were offering something that built to a more coherent whole. It would also ease burden throughout the system by not requiring oversight and verification into a multitude of individual courses.

Admittedly, a program-based accreditation system would provide less innovation than a course-based option. Fortunately, the next design choice can address this issue.

2) Approve curators, not just providers

When a student currently enrolls in an institution of higher education, the expectation is that college will be providing the instruction. In fact, federal regulations and many accreditors require this to be the case. For example, institutions participating in the federal aid programs that contract with an entity not approved to offer these benefits to deliver more than 25 percent of any accredited program will trigger a substantive review of their accreditation. And many accreditors require that at least 25 percent of credits for a degree are earned through instruction at that institution.  The idea behind these provisions is to prevent an accredited college from simply outsourcing all of its education to someone who has not been through the approval process.

A program-based alternative accreditation system could be made more innovative by removing requirements that a certain percentage of credits had to come from the provider. In effect, it would allow the creation of new entities that act as postsecondary curators. Through a combination of their own courses and deals with other providers they could put together a coherent program for students. Dollars could flow to the curator, who would handle all the complex federal financial rules. They would then work out compensation deals with whomever provides the actual course content.

This curator structure provides a number of benefits. It ensures that students seeking credentials from an alternative system are still taking a more coherent and structured set of learning experiences. And requirements about demonstrated curator expertise could further verify that the sequences chosen have value. Operating financial agreements through only the curator also limits the amount of financial transactions with the federal government, while creating a competitive market for high-quality providers. Finally, individual courses could presumably become part of multiple curated sequences, giving opportunities for a given provider to still reach lots of different people.

3) Determine Quality Externally

An alternative accreditation system must be about more than just letting in providers that do not look like typical institutions. To succeed it also needs to correct shortcomings of the current system, such as a lack of demonstrated quality, particularly in terms of learning. Admittedly, this places a greater standard on new providers than colleges approved under the existing accreditation structure, but it’s a fair tradeoff for not looking at less important things like facilities.

The need to determine learning quality is clearly a challenge for which there’s no consensus answer. But for the purposes of an alternative accreditation system, one element of a learning assessment system is particularly important: that it is external and impartial. Waiving essentially all other elements of an approval system only works if there’s confidence that someone is taking a meaningful look at the educational quality being offered. And that entity needs to be unconnected from the person actually offering the education. If they are not, what’s to stop a company or anyone else from offering subpar education, saying it’s good enough, and raking in federal cash?

The structure of external quality validators is also important. The exact form they would take would likely vary based upon the topic area. For liberal arts disciplines, experts in the field could presumably construct a set of competencies and skills needed to demonstrate sufficient learning. Depending on the subject area these competencies and skills could be measured through a combination of assessments, written work, presentations, portfolios, or something else. But an agreed upon metric for quality would create something that reviewers trained in that same field could judge a randomly sampled set of student work against when looking at a provider. In disciplines with more explicit technical knowledge, external quality checks should consider whatever assessments are used to measure those skills, such as a licensing test, if applicable, and also incorporate feedback from multiple employers in that field. This ensures that employability is taken into some account.

Verifying the quality of the verifiers would also be a challenge. One way to do this would be to use financial oversight instead of content. In other words, those in charge of verifying quality would share in the financial risk of negative outcomes (such as a loan default), with an escalating increase in penalties. This type of structure would create a strong financial incentive for alternative accreditors to care about the quality of the providers they oversee. Alternatively, a separate set of experts in the field could be asked to review the proposed learning measurement standards.

Broader changes to the compensation structure of alternative accreditors could also help. Right now accreditor revenue is dependent upon how many institutions they approve. That creates a disincentive for making any changes that might scare away colleges or lead to denials. Instead of this model, the Department should charge all approved institutions a set accreditation fee. It would then distribute these funds to accreditors as desired. This structure would make it possible to award additional funds for things that would otherwise not be acknowledged—such as greater transparency on learning outcomes.

Unfortunately, external quality verification groups needed to act as new accreditors do not readily exist. They also present a chicken and egg problem. It’s unlikely that they will start forming until there’s a reason to do so, but the reason why they are needed—an alternative accreditation system—can’t really work without them.

There are two ways the federal government could stimulate activity in this space. First, would be direct financial investments through some kind of competitive grant program—what the President announced in the federal budget a few years ago. A less expensive alternative would be to set a date for the beginning of a new accreditation system several years into the future whenever Congress authorizes it. This indicates these groups need to start cohering but leaves time to do so without rushing so providers can get approved right away.

4) Ease into federal aid

Federal student aid can be a blessing and a curse for innovation. As an entitlement program, federal aid provides an automatic revenue stream that can sustain and grow any new actor. But this also creates a strong incentive to prioritize growth over quality and can lead companies astray if they don’t face the correct incentive structure.

Much as the last post suggested, the best way to create the proper incentive structure for using federal aid is to ease providers into the system with a focus on reimbursement and lesser amounts of grant aid first and protecting access to loans. This structure in particular should limit access to loans at first and consider lower maximum levels of grant aid at first to see if it can push price points down.

Guided Innovation

Letting new actors into the postsecondary system should help increase the quality of options for students, particularly those choosing among distance education programs. But any such expansion must be cognizant of past mistakes and the consequences they produced. Encouraging a measured approach with an emphasis on quality and external validation is the best way to make that happen.

Clearly, though, an alternative system would take a long time to get Congressional approval. The next post will consider what accreditors could do right now to make the system work better.