Our Wishlist for Higher Ed Reform – RealClearEducation

Report on Proposed Higher Education Reforms and Alignment with Sustainable Development Goals

Introduction: Advancing Sustainable Development through Higher Education Policy

A review of potential legislative reforms to the United States’ higher education financing system reveals significant opportunities to align federal policy with key UN Sustainable Development Goals (SDGs). Proposed changes focus on enhancing accountability, affordability, and accessibility, directly contributing to goals for quality education, poverty reduction, and economic growth. This report outlines three primary reforms and analyzes their impact through the lens of the SDGs.

1. Refining accountability metrics to include program cost alongside graduate earnings.
2. Eliminating the Parent PLUS federal loan program.
3. Restricting federal loan access for first-year undergraduate students.

Proposal 1: Enhancing Accountability Metrics for Quality Education (SDG 4) and Reduced Inequalities (SDG 10)

The primary proposal involves revising the accountability system that links federal aid eligibility to graduate outcomes. The current framework focuses solely on an absolute earnings threshold. The proposed refinement would incorporate the price of the educational program, creating a value-based ratio of earnings relative to cost.

• Mechanism: Programs would be evaluated on whether graduates can recoup their educational investment within a reasonable timeframe, such as ten years. This holds institutions accountable for both the outcomes they produce and the prices they charge.
• Intended Impact: This change would incentivize institutions to lower prices or improve graduate earnings. It would also prevent penalizing lower-cost programs that train for essential but modestly-paid occupations.

SDG Alignment:

• SDG 4 (Quality Education): This reform directly supports Target 4.3 by promoting affordable and quality tertiary education. By linking funding to value, it ensures that educational pathways lead to relevant and effective outcomes.
• SDG 10 (Reduced Inequalities): The revised metric provides a fairer evaluation for institutions serving low-income communities or training for public service roles like teaching and nursing. It ensures these vital programs can maintain affordability and remain eligible for federal aid, promoting equal opportunity.

Proposal 2: Eliminating Parent PLUS Loans to Combat Poverty (SDG 1) and Promote Decent Work and Economic Growth (SDG 8)

A second key reform is the proposed elimination of the Parent PLUS loan program. This program allows parents to borrow nearly unlimited amounts for their children’s education, which has been identified as a driver of tuition inflation and significant financial hardship for families.

• Problem Identification: The program’s design encourages institutions to raise prices, knowing that families can access substantial federal loans. This has led to a financial crisis among older Americans who have taken on high-interest debt they cannot repay.
• Proposed Solution: Discontinuing the Parent PLUS program would protect families from unsustainable debt, apply downward pressure on tuition growth, and refocus federal aid on students and programs that deliver measurable value.

SDG Alignment:

• SDG 1 (No Poverty): Eliminating this loan program is a direct measure to prevent families, particularly those from low- and middle-income backgrounds, from being pushed into debt-induced poverty and financial instability.
• SDG 8 (Decent Work and Economic Growth): By reducing the debt burden on households, this reform supports sustainable economic growth. It ensures that the pursuit of higher education does not result in long-term financial hardship that hampers economic participation for multiple generations.

Proposal 3: Reforming First-Year Borrowing to Ensure Equitable Access and Success (SDG 4)

The final proposal suggests a structural change to when students can first access federal loans. It recommends barring first-year undergraduates from taking out student loans, with aid packages for this period consisting exclusively of grants.

• Mechanism: Loan eligibility would begin in the second year of study, contingent upon a student demonstrating the ability to succeed in college-level coursework. This makes the initial exploration of higher education a less financially risky endeavor.
• Intended Impact: This policy would protect students, families, and taxpayers from investments in programs where students are unlikely to succeed and persist. It encourages institutions to provide sufficient grant aid and support to ensure first-year student success.

SDG Alignment:

• SDG 4 (Quality Education): This reform promotes inclusive and equitable access to quality education (Target 4.3) by lowering the financial risk for new students. It incentivizes the completion of studies by tying loan access to demonstrated academic progress, thereby supporting lifelong learning opportunities for all.

Conclusion: Fostering Sustainable and Responsible Institutions (SDG 16)

Collectively, these three reforms would advance a more rational and sustainable federal aid system. They align with the principles of fiscal responsibility and equity, ensuring that public funds support educational programs that provide tangible value. By enhancing accountability, protecting vulnerable families from debt, and reducing financial risk for students, these policies directly contribute to the framework of SDG 16 (Peace, Justice and Strong Institutions) by promoting effective, accountable, and transparent institutional practices in the governance of higher education financing.

Analysis of the Article in Relation to Sustainable Development Goals

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The article on higher education reform connects to several Sustainable Development Goals by focusing on the economic and social outcomes of education. The primary SDGs addressed are:

   • SDG 4: Quality Education: The entire article is centered on improving the quality, affordability, and accountability of higher education. It discusses reforms to the federal student aid system to ensure education provides real value.
   • SDG 1: No Poverty: The article addresses the financial hardship caused by student debt, noting that “too many middle- and low-income families take on high-interest debts they can never repay.” By proposing measures to curb excessive debt and ensure education leads to better financial outcomes, it connects directly to poverty prevention and reduction.
   • SDG 8: Decent Work and Economic Growth: The core of the proposed accountability system is to link higher education to employment outcomes. The article advocates tying “colleges’ access to federal student aid to whether their graduates achieve reasonable financial outcomes,” which directly supports the goal of productive employment and decent work.
   • SDG 10: Reduced Inequalities: The article highlights the “equity benefits” of its proposed reforms. It aims to create “fairer accountability rules” for programs that serve “low-income students” and protect “vulnerable borrowers,” thereby addressing inequalities in educational access and outcomes.
   • SDG 16: Peace, Justice and Strong Institutions: The call to reform the “federal aid system toward a more rational and sustainable design” and to introduce “long-overdue accountability in higher education” relates to building effective, accountable, and transparent institutions.

2. What specific targets under those SDGs can be identified based on the article’s content?

   Based on the issues discussed, the following specific SDG targets can be identified:

   • Target 4.3 (under SDG 4): “By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university.” The article’s proposals to “lower prices,” end programs like Parent PLUS that “drive… tuition inflation,” and tie aid to value are all aimed at improving the affordability and quality of tertiary education.
   • Target 4.4 (under SDG 4): “By 2030, substantially increase the number of youth and adults who have relevant skills… for employment, decent jobs and entrepreneurship.” The emphasis on graduates’ earnings and ensuring they can “recoup what they paid for their degrees” directly links the educational system to providing skills relevant for employment.
   • Target 1.2 (under SDG 1): “By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.” The proposal to eliminate Parent PLUS loans is intended to stop a “driver of… household hardship” and protect families from debt, which is a key factor in preventing poverty.
   • Target 10.3 (under SDG 10): “Ensure equal opportunity and reduce inequalities of outcome…” The article advocates for reforms that would be “fairer to programs that serve low-income students” and offer “protections for vulnerable borrowers,” directly addressing the need to reduce inequalities of outcome in the higher education system.
   • Target 16.6 (under SDG 16): “Develop effective, accountable and transparent institutions at all levels.” The central theme of the article is to create an accountability system for higher education, ensuring that “taxpayer dollars flow only to programs with measurable value” and making the federal aid system more rational and accountable.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   Yes, the article mentions and implies several specific indicators that can be used to measure progress:

   • Graduate Earnings Level: The article explicitly states that the current accountability rule “focuses solely on earnings, applying a single dollar threshold.” This absolute earnings level is a direct indicator of the financial outcome of education.
   • Earnings-to-Cost Ratio: A key proposal is to evaluate programs on “a ratio—earnings relative to cost.” This would serve as a new indicator to measure the value proposition of an educational program, reflecting both what students get and what they pay.
   • Time to Recoup Investment: The article suggests a specific benchmark for the earnings-to-cost ratio: “ensuring that graduates’ earnings above a benchmark are sufficient to recoup what they paid for their degrees within ten years.” This time-based metric is a clear indicator of a program’s financial value.
   • Program Price / Tuition Cost: The proposal to “incorporate price alongside earnings” makes the cost of a program a critical indicator. The goal is to encourage institutions to “lower prices” to remain eligible for federal aid.
   • Level of Household Debt from Student Loans: The article describes Parent PLUS loans as a cause of a “quiet financial crisis among older Americans.” The volume and repayment status of these loans serve as an indicator of financial hardship and the sustainability of the lending system.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article. In this table, list the Sustainable Development Goals (SDGs), their corresponding targets, and the specific indicators identified in the article.

   SDGs	Targets	Indicators
   SDG 4: Quality Education	4.3: Ensure equal access to affordable and quality tertiary education. 4.4: Increase the number of youth and adults with relevant skills for employment.	Graduate earnings level (absolute dollar threshold). Earnings-to-cost ratio of educational programs. Time required for a graduate to recoup the cost of their degree (e.g., within 10 years). Program price/tuition cost.
   SDG 1: No Poverty	1.2: Reduce the proportion of people living in poverty.	Level of household debt from student loans (e.g., Parent PLUS loans).
   SDG 10: Reduced Inequalities	10.3: Ensure equal opportunity and reduce inequalities of outcome.	Access to federal aid for students in low-cost programs serving low-income populations. Financial outcomes (debt vs. earnings) for vulnerable and low-income borrowers.
   SDG 16: Peace, Justice and Strong Institutions	16.6: Develop effective, accountable and transparent institutions.	Proportion of federal aid funds flowing to educational programs that meet value-based metrics (e.g., positive earnings-to-cost ratio).

Source: realcleareducation.com