Increasingly, policymakers and the general public are raising concerns about the value of higher education.  A recent report from Gallup and Lumina Foundation found that while the overwhelming majority of individuals without a credential believe that postsecondary education is necessary for economic mobility, the majority of respondents noted their precarious confidence in the value of a credential as the main factor in enrolling or remaining enrolled in college. According to polling commissioned by the Chronicle of Higher Education and by New America, there is a growing partisan divide on the question of whether colleges do a good job in educating their students and whether colleges have a positive or negative effect, overall, on their communities. Given this current climate and concern, I was recently invited to give a brief TED-style talk at Third Way on ideas to advance postsecondary value. I was joined by others in the field who have thought deeply about these issues and was happy to have an opportunity to share reflections from my work in both federal and state policy. One key point is that while federal policy plays a crucial role in higher education, states hold significant power to shape the landscape and ensure that postsecondary education delivers value for students.

This post, drawing on lessons learned from my time as New Jersey’s Secretary of Higher Education, presents six key levers state policymakers can utilize to promote value in postsecondary education.

The New Jersey Framework: A Students-First Guiding Principle

Our work in New Jersey centered on a fundamental principle that embodied our vision for postsecondary delivering value: every student, regardless of background, should have the opportunity to obtain a high-quality credential that prepares them for life after college. This value statement informed the development of a "Student Bill of Rights" framework, outlining how postsecondary education should serve students, particularly those from underserved communities, including students of color, those from low-income backgrounds, and adults.

This framework offered a students-first approach to ensuring postsecondary value that we advanced through various legislative and policy approaches. Most obvious were a new state funding formula for colleges and universities that prioritized equity in student success and college affordability guarantees that made two or more years of college free for low-income students across the state. Less prominent were other creative ways in which we identified state levers to ensure appropriate oversight of postsecondary education on behalf of students. This post delves into some of these less-explored options for state policy action on postsecondary value .As a disclaimer, while each of these concepts were informed by my time in New Jersey, not all of these were implemented in exactly the ways outlined below.

Six Levers for State Policy Action

1. Initial Authorization with Outcomes and Labor Market Needs in Mind: Each state has a process for authorizing postsecondary institutions to officially operate lawfully within the state. This “state authorization” also serves (along with other requirements) as a prerequisite to institutions’ eligibility to offer student’s federal financial aid. This process should consider labor market demand for the institution's programs, as well as past performance data (if applicable) to assess the institution's ability to serve students effectively. Probationary authorization for a limited period, with students ineligible for federal aid initially, could be a tool to ensure institutions establish a strong track record before accessing federal resources.
2. Reauthorization Based on Evidence of Student Success: Similar to initial authorization, reauthorization processes should evaluate institutions based, in part, on student success metrics using College Scorecard data. Graduation rates, transfer rates, economic outcomes (including for non-graduates), and student loan repayment rates are all vital indicators. Institutions with persistently poor outcomes could face sanctions or even lose their reauthorization status.
3. New Program Approval with Industry Partnerships: State approval for new postsecondary programs should consider labor market projections and industry partnerships that demonstrate a clear need for the program's graduates. This doesn't solely apply to technical fields. New Jersey, for instance, saw a community college program in glassblowing succeed due to demonstrated labor market demand.
4. Risk-Based Reviews for Veterans Programs: The VA and Department of Defense rely on state officials to approve programs for veterans' benefits. Limited capacity often leads to cursory reviews, making it difficult to identify programs that most struggle to consistently provide high-quality education and adequate value for students. Implementing a risk-based review process, targeting programs with high closure risk or those potentially leaving students with significant debt, could optimize resource allocation for program oversight.
5. Statewide Task Force for Coordinated Oversight: State oversight of higher education can be fragmented, with responsibility spread across various agencies (e.g., SHEEO, higher education systems, workforce boards). A task force bringing together officials from these agencies could foster information sharing and develop coordinated policies that prioritize program value.
6. State Financial Aid with Outcome Measures: Several states, like California, are exploring linking financial aid eligibility to institutional outcomes. Additionally, states like New Jersey are considering "gainful employment" rules tied to state financial aid and other funding opportunities. Gainful employment rules typically set minimum expectations for student outcomes after leaving postsecondary institutions, including measures such as employment, earnings, or debt-to-income ratios. These approaches incentivize institutions to prioritize programs that lead to successful career outcomes.

A Call to Action for Policy Leaders = By utilizing these six policy levers, and others, states can play an important, proactive role in ensuring postsecondary education delivers true value to students. This is not a call to replace federal action, but rather to leverage the combined power of state and federal efforts to create a higher education system that effectively prepares all students for a bright future.