Commentaries
Seven Ways the Department of Education Has Made Higher Ed Worse

By Richard Vedder

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October 28, 2015

Testifying before the Senate Homeland Security and Government Affairs Committee recently, I was asked by Senator Claire McCaskill (D-MO) if, with respect to higher education, I would favor eliminating the U.S. Department of Education. 

She was aghast when I said “yes.” 

Before I go into the damage our national educational ministry has done to higher education, it is worth reviewing its creation in 1979. 

The Democrats then controlled all of the federal government, with large congressional majorities. The party had promised to create the Department in its 1976 platform. President Jimmy Carter advocated it, as did the nation’s largest teachers union, the National Educational Association (NEA). 

Yet the bill barely passed. The House committee considering it advanced it to the floor on a 20-19 vote—with seven Democrats voting no. The liberal press such as the New York Times and the Washington Post opposed it editorially.

In particular, the criticism leveled by the Times in its May 22, 1979 editorial “Centralizing Education Is No Reform” was sharp and prescient: 

The idea [of the Department of Education] remains as unwise as when it was first broached in a Carter campaign promise to the National Education Association.... It has always been American policy...to deliberately avoid centralizing education in a way that requires direction and financing by a national ministry.... We believe that diversity of direction has served American education well and that it will continue to do better without a central bureaucracy, even a benign one.

The preeminent Democratic public intellectual, Senator Daniel Patrick Moynihan, was also against it. 

Largely because of the NEA’s political clout, however, the widespread bipartisan skepticism about the wisdom of creating a cabinet-level education department was overcome. 

Would the U.S. be better off today if the department had not been created? A review of the pre- and post-Department developments in higher education shows why I favor eliminating the Department—at least regarding authority over universities. 

The 30 years between 1950 and 1980 were the Golden Age of American higher education. The proportion of adult Americans with college degrees nearly tripled, going from 6 to 17 percent. Enrollments quintupled, going from 2.3 to 12.1 million. 

By the end of the period, the number of doctorates awarded in engineering had quintupled and over 40 percent of Nobel Prizes were going to individuals associated with American universities. 

This was the era in which higher education went from serving the elite and mostly well-to-do to serving many individuals from modest economic circumstance. State government support for higher education rose dramatically—spending per student rose roughly 70 percent after inflation. 

During this period, however, the federal role was quite modest. The GI Bill had increased higher education participation, but the loan programs authorized under the 1965 Higher Education Act were comparatively small until the very end of the period when loan eligibility was extended to large numbers of comparatively affluent Americans. In 1978, the year before the Department’s creation, only one million student loans were made totaling under $2 billion—less than 5 percent the current level of lending even allowing for inflation.

College costs remained remarkably stable. Tuition fees typically rose only about one percent a year, adjusting for inflation. At the same time, high economic growth (real GDP was rising nearly four percent annually) led to incomes rising even faster, so in most years the tuition to income ratio fell. In other words, college was becoming a smaller financial burden for families.

Compare the Golden Age to the post-Department of Education era (1980 to 2015). While college attainment has continued to grow, in percentage terms the growth has slowed. But that is not all. Let me briefly enumerate seven other unfortunate trends.

First, of course, education costs have soared. Tuition fees rose more than three percent a year in inflation-adjusted terms, far faster than people’s incomes. As new research from the New York Federal Reserve Bank demonstrates, rising federal student financial aid programs are the primary factor in this phenomenon.

If tuition fees had risen as fast after 1978 as in the four decades before, they would be about one-half the level they are today, and the student debt crisis would not have occurred. Presidential candidates would not be talking about “free” tuition.

Second, if anything, college has become more elitist and less accessible to low income students. The proportion of recent graduates who are from the bottom quartile of the income distribution has declined since 1970 or 1980. The qualitative gap between the rich highly selective private schools and state universities has widened—fewer state schools make it near the top in the US News rankings, for example.

Third, there has been a shocking decline in academic standards. Grade inflation is rampant. The seminal study Academically Adrift by Richard Arum and Josipa Roksa shows that very little improvement in critical reasoning skills occurs in college. Adult literacy is falling amongst college graduates. Large proportions of college graduates do not even know in which half-century the Civil War occurred. Ideological conformity is increasingly valued over free expression and empirical inquiry. 

The Department of Education does nothing to reverse those trends. It doesn’t even acknowledge them.

Fourth, accreditation of colleges, overseen by the Department of Education, is expensive and ineffective. Few schools are ever sanctioned, much less closed for shoddy performance. The system discourages innovation and new entries—it is anticompetitive. Conflicts of interest are rampant. The binary evaluation system (you either are accredited, or you are not) provides no useful information to consumers.

Fifth, the federal aid programs and “college for all” propaganda promoted by the Department have led to a large proportion (probably over 40 percent) of recent graduates being underemployed, working in jobs traditionally done by high school graduates. Arum and Roksa observe in their follow-up book Aspiring Adults Adrift that two years after graduation nearly one-fourth of graduates are still living with their parents. More college graduates work in low paying retail trade jobs than are Americans serving in our Armed Forces.

Sixth, the Department is guilty of regulatory excesses and bureaucratic blunders. For example, the Office for Civil Rights (OCR) imposes a “preponderance of evidence” standard on colleges in sexual assault cases that violates American ideals regarding due process and fair treatment of accused. Twenty-eight members of the law faculty at Harvard, among others, have bitterly complained about that, but the OCR continues its crusade. 

Also, the form required of applicants for federal student aid (FAFSA) is Byzantine in its complexity—the 2006 Spellings Commission criticized it severely—but nothing important has been done about it.

Seventh, the one arguably useful function of the Department is to provide information to consumers and taxpayers about college performance. Yet Department bureaucrats have done very little to give useful information on student learning, post-graduate success, consumer satisfaction, et cetera.

Years after promising it, the Department has finally developed a College Scorecard, which is  potentially valuable, but marred because it excludes a number of politically incorrect colleges such as Hillsdale—ones that refuse to participate in federal aid programs or collect data on racial characteristics of students. 

Summing up, the Department of Education has had, so far as I can see, no positive impact on higher education and has either caused or ignored numerous negative effects. Thus it is a tragedy that the skeptics about creating it did not prevail back in 1979.

 


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