Romney claims that when Obama "nationalized the student loan market," he "drove away private lenders and moved a trillion-dollar obligation to the federal balance sheet." This simply isn't true. The government was already on the hook for that money -- that's what it means when to guarantee a loan. If it goes bad, you pay. Other than that, Romney makes some noise about private lenders offering students more information and choice. Again, this is nonsense, unless you believe the banks were doing a fabulous job informing 18-year-olds about the risks of taking out debt before 2010. The long and the short of it: This idea looks like a give-away to the banks, or possibly a way to weaken the federal direct lending program.
3. UNLEASHING FOR-PROFIT COLLEGES
Maybe not the greatest idea, unless you think recruiting at homeless shelters is OK.
Romney would like to see less regulation across the economy, and higher education is no exception. He specifically singles out the "gainful employment" rule, which cuts off federal financial aid for vocational schools that fail to place enough of their graduates in decently paying jobs. The for-profit college industry fought an all-hands-on-deck lobbying battle against the regulation and would still love to see it disappear (It's probably no coincidence that two Romney's education advisers previously lobbied for Apollo Group, corporate parent of The University of Phoenix).
There are many smart people who believe the for-profit colleges are helping push higher education into the 21st century, especially through their pioneering role in online learning. There's certainly no reason to strangle the industry in its cradle. But the gainful employment rule was aimed at scaling back the sector's worst excesses, like recruiting hopeless students at homeless shelters and halfway houses, then encouraging them to load up on debt. Unless you truly in your heart of hearts believe that all regulation is bad regulation, there's no reason to eliminate it.
4. LETTING COLLEGES DECIDE HOW TO AWARD DEGREES
Now we're talking!
Of course, there are some regulations that do stifle innovation. Consider the government's decision in 2010 to formally define a credit hour. That appears to be the rule Romney is suggesting we eliminate, when he argues that colleges need more leeway to award degrees based on demonstrated skills rather than the time spent in a classroom.
As the country's major education lender, the Department of Education is interested in making sure degree programs meet certain standards, and since schools are accredited partly based on the amount of time students spend studying in and out of a classroom, the agency felt compelled to issue a formal rule.
The problem, which Romney's paper articulates rather well, is that time is an expensive and ineffective way of measuring achievement. Here's his take:
The current emphasis on time to degree, rather than measured competency, discourages more innovative learning solutions and continues the frustration of employers who are unable to fill high-skilled positions. Forcing students to complete a fixed term of study also drives up the costs for those who might need less time, while graduating those who have not yet obtained market-ready skills. Federal regulations and aid rules must change to facilitate instead of obstruct models that recognize and address this reality.
Exactly. If schools can figure out ways to graduate students faster and cheaper without compromising the quality of their education, there's no reason to let the government get in the way.