The higher education system suffers from many problems, including excessive costs,
low completion rates, uneven financial value for students, and high rates of student loan
nonpayment. Federal government policies unintentionally exacerbate many of these issues,
as taxpayers’ considerable investment in higher education comes with few quality controls
or accountability to ensure that colleges and universities are delivering on their promises to
students. Fortunately, this year’s budget reconciliation process presents a unique
opportunity to remedy many of the policy problems that have led the higher education
system astray.

The Problems Facing Higher Education

Americans are losing confidence in the higher education system. According to The
Wall Street Journal’s polling, 56 percent of Americans believe that a four-year college
education is no longer worth the cost. People are less likely to say that colleges and
universities have a positive impact on the direction of the country. This changing
sentiment has translated into falling enrollment: The number of students attending college
has dropped 12 percent since its peak in 2010.

Some of the public’s lack of confidence is justified. Higher education can be
financially beneficial for students—but there are major exceptions. A large proportion of
students who pursue higher education end up no better financially than if they had not
attended college at all. My analysis of the financial value of college for the Foundation for
Research on Equal Opportunity finds that 31 percent of federally funded higher education
programs leave the typical student worse off financially. For some credential types,
including master’s degrees, the share of nonperforming programs is closer to one-half.

Read the full testimony here or view below (begins at 29:03).