Historic Opportunity, No Legislation Required

October, 2013

Washington -- Many college admission directors and business officers across the country are worried about the sustainability of their enrollment models, strategic plans, and the future of the institutions themselves. Old enrollment management schemes, like "merit aid" discounts based on the high-tuition-high-aid model, may have run their course. Overall, higher education enrollment is down this year and, at several colleges, seriously down.

This means many institutions have excess capacity and could handle more students at low marginal costs per student. The institutions should be happy to enroll students who bring in revenue that covers marginal costs, namely those bringing federal aid, like Pell students and veterans. These students, if more aggressively recruited, could keep up necessary enrollments where the alternative might be a downward spiral of slashing programs and faculty until the institution is faced with demise.

This is where the Secretary of Education could be helpful, not only in pushing for more affordable access for Pell recipients and veterans, but also in reversing the exhausted merit aid model. He could offer colleges a carrot for opening up access to the lower income in ways that do not burden them with loans.

Under current law, the Secretary has wide discretion to establish "experimental sites"; he could invite several willing colleges starting next year to rework their strategic plans and models away from futile chases after rankings and prestige, toward affordable access for populations that are now being squeezed out financially or poorly served by exploitative, proprietary institutions that sink students into unconscionable levels of debt. The reward could be a substantial relaxation or waiving of regulations for a college, as an experimental site.

This could be done under current law with no additional appropriations. The Department could put an invitation in the Federal Register for proposals. The current situation of excess capacity, exhausted tuition gimmickry schemes, fearsome student debt burdens, and a widening lower-income access gap presents a historic opportunity for action.