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Arne Duncan's High Hopes for Troubled U.S. Universities

Albert R. Hunt is a Bloomberg View columnist. He was the executive editor of Bloomberg News, before which he was a reporter, bureau chief and executive Washington editor at the Wall Street Journal.
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U.S. higher education is the envy of the world, with the most renowned universities attracting young men and women from around the globe.

As Americans consider college possibilities, the choices are terrific: large and small, public and private, in every region, along with a robust community-college system that is a gateway for many immigrants and for training older workers.

Yet higher education faces severe problems. It is unaffordable for many, creating a $1.3 trillion mountain of student debt. About half of students graduate. Politics and budget squeezes affect great public institutions such as the University of California at Berkeley and the University of North Carolina at Chapel Hill.

Student Loans

Few people have thought more about this than Arne Duncan, who will step down as education secretary in December after seven years on the job.

"We have the best system of higher education in the world," he said in an interview, "but have real and serious challenges."

The facts are sobering. Tuition and fees in recent decades have soared at public and private colleges, for-profit schools and two year community colleges. Seven in 10 students leave with an debt -- $28,950 on average.

Duncan is proud of the sizable increases in investment and aid during the administration of President Barack Obama, but he acknowledges these have been outstripped by rising costs. Forty- seven of 50 states have cut back on per-student higher education spending in the past five years.

At both public and private institutions, research shows, the number of administrators has increased far more than that of tenured faculty. Duncan says these higher administrative overhead costs are "pretty stunning."

Some of the solutions he and the president have proposed have been thwarted by the Republican Congress. These include tuition-free community colleges, which he considers the "engines" of the new economy. Other measures are taking effect. Starting next month, anyone with a student loan won't be assessed any more than 10 percent of monthly income for repayment and there are moves to renegotiate lower interest rates.

But Duncan, who will return to his native Chicago where he once headed the school board, says nothing will work without several overarching changes: improving the share of students who graduate -- now just 59 percent for four-year schools and 29 percent for two-year schools -- greater transparency in higher education and more creative innovations.

Graduating affects job opportunities and earning potential; graduates also are much less likely to default on student loans.

A few years ago, Obama and Duncan proposed a ratings system for colleges. The higher education lobby and Republicans on Capitol Hill quickly killed the idea. But the fallback has been a scorecard, which Duncan says is better anyway. It provides consumers, prospective students and parents, with basic information about each school's costs, including financial aid packages, educational options, graduation rates and average earnings of graduates. Two-thirds of students apply only to one school and Duncan believes that making this information more accessible will produce better choices and results.

He argues for more innovation and experimentation with different approaches and incentives as well as a greater appreciation for different kinds of students: Those in their 30s, 40s and older. The options, he says, certainly include for- profit colleges, though he has been a harsh critic of some that have "taken advantage of veterans and single moms."

A peeve of Duncan's is money-driven athletics at some top universities, which tolerate cheating and lower standards among players. He has championed more accountability for athletic programs and argues that high-profile coaches should be sanctioned when caught in transgressions.

That's probably a pipe dream. Among recent examples are the credible reports that basketball recruits and players at the University of Louisville were entertained by strippers and provided with sexual favors. The coach, Rick Pitino, himself involved in a sex scandal not too long ago, insists he had no knowledge. This is the most profitable U.S. college basketball program and there's little expectation that Pitino will be held accountable. 

On the larger picture, Duncan, a former Harvard basketball star -- he admits that may be an oxymoron -- exudes optimism. He believes that over the next five to 10 years, the inexorable trends toward more transparency, innovation and the realization that "the nontraditional student today is traditional," will make higher education more accessible, affordable and better.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Albert R. Hunt at ahunt1@bloomberg.net

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net