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College 2.0: An Entrepreneurial Approach to Reforming Higher Education

High school class of 2012 graduates will soon find themselves entering a higher education system facing unprecedented challenges — and skyrocketing college costs are only part of the problem. In this report, a panel of education leaders and policy experts identify critical challenges facing U.S. higher education and offer ambitious solutions to reform — and reinvent — the system itself.

The report was created as part of a Kauffman Foundation retreat in December that brought together a panel of 30 education analysts and practitioners to examine the challenges facing higher education and generate ideas to overcome them. The group addressed key topics including campus-level obstacles to innovation; accreditation; state and federal regulations; academic productivity; measuring student-learning and job-market outcomes; and how to take educational innovation to scale.

“U.S. higher education today faces a host of problems from rising costs and dismaying dropout rates to low productivity and failure to effectively serve nontraditional students,” said Ben Wildavsky, Kauffman Foundation senior scholar for research and policy and co-organizer of the retreat. “We see an urgent need to not just reform, but rethink, how colleges and universities deliver education to enhance quality, access, and graduates’ success in the workforce.”

“College 2.0” showcases ambitious ideas for reinventing higher education, focused on making better use of technology, developing a culture of measurement and performance incentives, and creating smarter regulation. Recommended actions fell into six broad categories, including:

  • Tackle campus-level obstacles to innovation.
    Faculty should be treated as enablers of innovation and provided incentives such as research funds to encourage development of innovative teaching models. Likewise, state policymakers should give colleges incentives to innovate by offering higher levels of funding to institutions with better student outcomes (and, presumably, more effective curriculum and teaching).
  • Rethink accreditation.
    Accreditation should place the fewest possible restrictions on both new and existing providers to encourage innovation. It should focus much less on inputs and much more on outcome measures, such as student performance and loan default rates. Online learning should be largely deregulated as long as minimum course-level outcomes are specified.
  • Streamline state and federal regulations.
    States should relax existing rules to make it easier to start charter colleges, including community colleges. Like K-12 charter schools, charter colleges should be given great flexibility in exchange for improving student outcomes. Also, Pell grants for low-income students should be staggered, providing fewer dollars up front and more as students advance toward degree completion. Colleges’ and universities’ eligibility for enrolling students who receive federal loans should be tied to bringing down costs.
  • Improve incentives to boost academic productivity.
    Universities should identify and financially incentivize those professors whose time would be more productively spent in the classroom rather than conducting and publishing scholarly research.
  • Fill information gaps about student-learning and job-market outcomes.
    To provide prospective students — and taxpayers — better metrics to assess higher education institutions, all states should provide information on labor-market outcomes by creating “unit record” data that link information on individual students’ college experience to how they fare in the job market.
  • Overcome barriers to taking innovative models to scale.
    Clear and accessible information about prices and student outcomes, both in the classroom and in the labor market, will introduce greater competition in the higher education sector, creating more opportunities for new entrants to introduce new models and take the most successful ones to scale.

Participants included Shai Reshef, founder of the University of the People; the management editor of The Economist; the founders of startups 2tor, Inc. and StraighterLine; senior leaders of nontraditional universities such as Olin College and Western Governors University; the president and CEO of Kaplan, Inc.; the directors of education policy at the American Enterprise Institute, the Brookings Institution, and the Center for American Progress; and professors who both study and participate in postsecondary reform initiatives.