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American higher education has traditionally been financed through a mix of public and private resources. This paper, prepared for the National Commission on Financing 21st Century Higher Education, notes that many advocates argue that college is a 'public good' and should be financed entirely by taxpayers. But reserving a role for private financing is critical to expanding access, encouraging market discipline, and promoting innovation. The author examines new ways to use private money in pursuit of public attainment goals. The paper begins with a discussion of different ways to fund students: rethinking college savings plans, creating space for new private lending models, and promoting innovative employer tuition-reimbursement programs. The author then discusses different types of employer partnerships and the role of private investors in creating new services and educational organizations.

The paper concludes with implications for policymakers. The author proposes that for private capital to flow to valuable options, investors, lenders, and entrepreneurs must be able to identify which those are. In higher education, that means detailed data on retention and completion rates, the return on investment (ROI) from different programs, and projections of labor market demand for particular credentials. States have made advances in these areas, building longitudinal databases that track students through postsecondary education and into the workforce, but only a handful allow for program level analysis of completion and earnings. Collecting and reporting such data can help lay the groundwork for many of the reforms discussed in the paper.

The University of Virginia Miller Center created the non-partisan commission in 2014 to recommend policy and funding changes to help the US attain the goal of 60 per cent of the labor force with a postsecondary degree or certificate by 2025. With support from Lumina Foundation, the commission was tasked with developing policy proposals aimed at providing long-term sustainable finance models for US higher education. To learn more about these issues, the commission engaged highly qualified experts to create 10 white papers on different dimensions of the higher education problem. The Commission suggests that higher education needs new financing options to increase educational attainment for all students, but particularly for low income students and students of color and to encourage innovative, high-quality, lower-cost forms of teaching and instruction.

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Using a new, nationally representative survey, this report explores how adults without a college degree perceive the postsecondary system as a whole and the costs and benefits of their potential options. Specifically, the study examines the following questions: Do adults without a college degree aspire to higher levels of education? Do they feel that the current higher education system is well designed to meet their needs? Do these adults hold accurate beliefs about the costs of public community colleges? How do they see the economic returns to different types of education?

The 20-minute Internet-based survey asked respondents a battery of questions about their current economic situation, their educational history and current aspirations, the costs and potential benefits of different postsecondary options, and the types of information they see as important in choosing a college or program. The report provides the top-line findings from this survey, and future analysis will dig deeper into the data. The author briefly describes the survey and the data set; explores the main findings on aspirations, attitudes, and beliefs; and concludes with implications for policy.

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Massive open online courses (MOOCs) are a new form of digital learning that has enthralled some, infuriated others, and changed the conversation about higher education in the US and abroad. [This report] clarifies the debate around the purpose and potential of MOOCs. [The author] argues that MOOCs are neither a panacea nor a passing fad, and instead, can serve as a tool for enhancing higher education and career training if properly deployed. [The author] highlights four early lessons learned in the first few years of innovation with MOOCs. His analysis shows that despite predictions that MOOCs would become a substitute for traditional college courses, few students have actually redeemed MOOCs for college credit. Most of the students who register for MOOCs already have a college degree, are employed, and more interested in earning job skills than college credit. Likewise, efforts to use online courses to improve remedial education have disappointed.

The first section of this report examines the MOOC movement, providing a snapshot of its origins and a sense of how the platforms work. The second section lays out the potential effects that MOOCs could have on higher education. The third section outlines some early lessons from the first two years of the movement. The fourth section discusses the implications of these early lessons for policymakers.

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Last fall [2013], President Obama unveiled a plan to promote college affordability by changing the way the federal government distributes student financial aid. The proposal calls for a federal college ratings system that appraises colleges on measures of access, affordability, and student success. These ratings would then govern the allocation of federal student aid dollars, with schools that perform well receiving larger Pell Grants and more generous student loans. Schools that lag behind would get less. The proposal is a dramatic departure from the government's traditional approach to aid policy, under which loan and grant monies flow to any accredited college that enrolls students, so long as the institution passes minimal standards of financial health and student loan default rates. The new plan would challenge colleges to perform on all three sides of higher education's 'iron triangle': access, affordability, and quality. Never before has a reform targeted all three sides of the iron triangle at the same time.

Since the ratings plan was announced, college leaders, advocacy groups, and researchers have asked whether these three dimensions can be measured accurately and whether existing databases could collect the necessary data. Accepted measures of 'quality' are notoriously absent, and capturing affordability and access is not straightforward either. Others have voiced concerns about the consequences the ratings may have for particular groups of institutions like open-access and for-profit colleges, where completion rates are usually low. But while it's easy to hypothesize about which institutions and students would win and lose under the new ratings scheme, an informed debate requires an empirical look at how America's colleges and universities currently fare on the three sides of the triangle. Is the iron triangle an iron law? Or are there colleges hitting high marks on all three sides? How many colleges might be in trouble under a new ratings scheme? And how are students distributed across the different levels of performance? This policy brief provides such a snapshot.

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How is it that rising educational attainment and increased access to college have not made a dent in economic mobility? In this chapter, the author argues that the problem lies in the disconnect between the payoff to a college degree and the number of disadvantaged Americans who actually make it that far. College does have a large effect on one's chances of moving up, but those benefits only accrue to those who actually finish a degree. Recent data suggests that college dropouts are no better off than those who never go at all. The chapter concludes that many individuals would be better off pursuing something other than a four-year or a two-year degree, such as a short-term vocational certificate or an apprenticeship that provides access to skills and a job. However, such alternatives are often treated as a last resort instead of a worthwhile option. Consequently, they are underdeveloped and underfunded. The author ends by proposing policy changes to fix that, as well as policies and practices that will help more low-income children to succeed in two-year and four-year degrees.

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Technology has the potential to transform higher education as it has other knowledge-based sectors like music, journalism, and financial services, where new providers have unbundled goods and services and improved access and convenience while reducing costs. But technology does not guarantee innovation. Innovation demands that entrepreneurs use technology to re-engineer higher education. This report offers proposals for re-engineering America's higher education system. It begins with a discussion of the changing higher education landscape, then examines the new ideas that could transform postsecondary provision and the pitfalls of faux innovation that props up the status quo rather than upending it. The paper concludes with recommendations for policymakers and other stakeholders who wish to promote innovation.

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In the face of increasing costs and lackluster outcomes, traditional higher education is under increasing pressure to prove its value proposition. Meanwhile, new providers have 'unbundled' the components of a postsecondary degree or certificate, offering stand-alone courses or sequences of courses, targeted job training, and assessments and certifications, often at much lower cost than existing institutions. These models cannot deliver all of what a traditional college or university does, but they can provide affordable, flexible, and customizable opportunities to learn. As unbundling in higher education has accelerated, reformers have asked whether there is a role for federal aid dollars to play in facilitating access to these new opportunities. This, in turn, has raised questions as to whether the traditional approaches to regulating postsecondary education at the state and federal level are well suited to this new ecosystem.

That the existing quality assurance system is ill-designed for this new world is abundantly clear. Less clear, however, is what should replace it. Simply lowering barriers to entry such that federal money can flow to a much wider array of providers would invite waste, fraud, and abuse. Thus, this policy brief outlines potential regulatory approaches and tools - many of which would work well in combination - that policymakers could use to facilitate access to this unbundled market while protecting consumers and taxpayers.

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Higher education is at a pivotal moment. The Great Recession has reduced state funding for higher education, with tuition and student debt soaring as a consequence. Meanwhile, doubts are emerging about the value of a college degree for student learning or future employment. These conditions have led to calls for reform. States, who control the purse strings, license new providers, and serve as the nation's laboratories of democracy, are well equipped to enact meaningful change. What can forward-thinking state policymakers do to chart a new way forward?

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When Americans think about opportunity and mobility, [they] think about higher education. Nearly three-quarters of Americans believe that getting a credential beyond high school is necessary to find a good job, and more than eight in 10 believe it will become even more critical in the years ahead. But after years of relentless tuition hikes, families increasingly feel trapped, forced to choose between taking part in a system where costs have skyrocketed while benefits have become more uncertain and consigning young adults to a lifetime of low wages. Seventy-seven per cent believe that higher education is not affordable for those who need it, and only 40 per cent believe higher education does a good or excellent job of providing value for the money.

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Amid growing concerns about the quality and cost of American higher education, policymakers are searching for reforms that can both increase the supply of affordable and effective postsecondary options and maintain consumer protection. Much of the focus has tended toward the federal student aid programs and policies that govern access to those programs. Though states play an important role in authorizing postsecondary institutions to operate in their state, observers have paid comparatively less attention to how they carry out that responsibility. This paper aims to present lessons for regulatory reform by examining how states organize their authorization process.

The paper concludes by recommending a better way for states to authorize postsecondary institutions: a risk-based approach, in which state authorizers would focus their resources on cases that pose the most risk to consumers. Authorizers could set up oversight boards independent of the political process and the existing higher education system in the state, require new entrants to provide basic documentation to establish a minimum level of seriousness, and have a well-designed set of consumer protections to weed out poorly structured or fraudulent institutions. In particular, states could require organizations to put up private capital as insurance against failure, which would also help to separate serious providers from diploma mills.

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