How to Put Colleges on the Hook

The White House is working on a rating system for colleges aimed at showing whether students are getting their money's worth.

Cecilia Muñoz, the director ofthe White House Domestic Policy Council.    (©2013 Richard A. Bloom)

With minorities on track to become a majority of the nation's under-18 population before 2020, closing the gaps in educational attainment between them and white students looms as an increasingly urgent challenge. Cecilia Muñoz, the director of the White House Domestic Policy Council, spoke last week with Atlantic Media Editorial Director Ronald Brownstein about the administration's agenda for narrowing those disparities, at the relaunch event for National Journal's Next America project. Edited excerpts of the conversation follow.

Where are we making progress in reducing the gaps in educational attainment and skills, and where are we still struggling?

We are making progress in college participation. We know the Latino numbers, in particular, are going up. And we're doing better in terms of student performance overall. Those numbers are creeping up. But they're creeping up in a way that demonstrates that the racial attainment gaps aren't narrowing nearly as quickly as we need them to be.

Where could we expand our effort to produce the most bang for our buck?

In my view, that's pretty clearly in early-childhood education. The return on investment is huge. And the likelihood of children actually arriving at kindergarten ready to learn increases dramatically. Without it, we end up with disparities already at kindergarten that we may never catch up on. When the president asked his team last year, "If we're going to be reducing inequality "¦ where do we get the best bang for our buck?" the answer to that is preschool.

The funding mechanism for your universal-preschool proposal is an increase in the tobacco tax. Are you open to other means of financing?

This is ambitious, and it costs money. We found a way to pay for it by increasing the tobacco tax. That ends up having important returns for the health of kids. We calculated that about a quarter of a million young people would not start smoking as a result of this particular increase in the tobacco tax. But if there are other ways to pay for it, we are absolutely open to that.

The president has had pretty ambitious proposals to tie student aid in higher education to outcomes. Where does that stand?

We've already expanded student aid, things like Pell Grants and the American Opportunity Tax Credit, which have had a very important impact in making college accessible. But at the same time, I think we agree that student aid by itself isn't going to solve this problem.

We cannot get in a situation in which the cost of a college education is unattainable for a middle-class family or for families struggling to get to the middle class, because that's how you get there. What the president has put forward is this notion that when you as a parent or as a student are shopping around for an education, you need the same kind of information that we have when we're shopping for a refrigerator or a car, just in terms of value. What is your loan likely to look like, if you need loans; what are your payments going to look like; and what kind of value are you getting for your money? The goal frankly is to put states and colleges and universities on the hook to answer the question, "What am I getting for my dollars?"

So the president has proposed and we are developing a rating system which is frankly intended to compete with U.S. News & World Report's rating system, which in many ways values the wrong things. It values selectivity, for example, as a measure, as opposed to how many students graduate on time and are they able to pay off their loans successfully. It's a big investment, and we think we can provide information which can both help students and families make better-informed decisions and help with this notion of driving costs down.

How will this rating system work?

We're developing it now. It is important to make sure that this rating system doesn't create incentives to not bring on board the very students we want to serve: the first ones in their families to go to college, the ones who need financial assistance. So we're going to measure how successful you are not just in enrolling those students but also in making sure they graduate. Because right now, our student aid pays for inputs — how many students enroll — but it doesn't pay for how much progress you make, and we want to drive the system in that direction. We're engaging the higher-education sector very aggressively to help us develop this rating system. But it will be developed by the end of next year, and it will be in place for the following school year.