Traditional higher education does not work for everyone. Federal student aid should be available to those pursuing nontraditional pathways. However, without accountability, making aid widely available risks substantial institutional fraud and abuse. The accreditation process tends to be controlled by traditional higher education institutions, thwarting innovation.

Make federal aid available on a “deferred-compensation” basis. New institutions would be ineligible for aid until they proved they could provide a positive return on investment. In the meantime, they would rely on private-sector funding.