Freezing Productivity in Higher Education: The Credit Hour Rule

UV Letter - Volume 1, #10

Imagine that the U.S. government imposed a new health care regulation requiring that patients presenting with certain symptoms spend a minimum length of time in treatment in order for the service to qualify for reimbursement via Medicare or Medicaid.Looking up from the bottom of a fiscal chasm – one created in large part by skyrocketing health care costs – such a rule would be unthinkable as a result of the likely negative impact on productivity. In education, the second largest sector of the economy behind health care, such a rule is not only thinkable – it already happened with hardly any controversy.

Unlike health care where costs have risen quickly, but outputs (in terms of human health) have increased even faster, education has seen scant few improvements in productivity. As a tenured faculty member at the University of Chicago told us recently: “I still teach the same way Socrates taught 2,400 years ago – only not nearly as well.”So given the Obama Administration’s ambitious higher education priority of returning to our rightful place as the nation with the highest percentage of college-educated adults, the government should be pulling out all the stops in order to encourage productivity improvements in higher education… Right?

Productivity is a measure of how efficiently inputs combine to produce outputs. In education, the inputs are labor (instructors), facilities, printed materials, technology and – of course – the time students allocate to their studies. The output is student learning, which can be broken down into various competencies gained as a result of the educational experience. Improving productivity involves changing the way education is delivered so that more output is produced per unit of input.

One surefire away to preclude improvements in productivity is to mandate that some “input” element of this equation remains fixed; inputs matter less than outputs. Unfortunately, as part of “Negotiated Rulemaking” a new rule states for the first time that access to Title IV financial aid – the lifeblood of higher education – requires adherence to a strict measure of educational inputs.

First, a bit of history: The first effort to formulate a means of accounting for inputs in higher education was launched by the Carnegie Foundation about 100 years ago. The formulation was simple: X contact hours of faculty-led instruction + Y hours of additional work outside the classroom by a student over Z weeks = N credit hours. The carrot dangled to induce participants into quantifying educational inputs was participation in the new retirement system sponsored by the Carnegie Foundation, which became TIAA-CREF.

Today, the “Carnegie Unit” remains the backbone input in American higher education. However, as part of its recently concluded rulemaking process, the Department of Education decided to bottom the entire system on this one input. It did so in a “Dear Colleague” letter from Eduardo Ochoa, Assistant Secretary for Postsecondary Education, stating that the Department would require that institutions participating in the Title IV financial aid programs follow the original Carnegie credit hour formulation, which is based on “minimum amount of student work… in accordance with commonly accepted practice in higher education.”

The Department’s logic was that “a credit hour is a proxy measure of a quantity of student learning.” But surely this is incorrect. A credit hour is an input – the amount of work a student does. Student learning is an output. Is it not possible to imagine a new mode of instruction, delivery or technology (or perhaps some methodology already in existence) that produces more learning for less student work? The result is that the U.S. government has created an indelible equation between the amount of student time that must be directed to the learning process and access to Title IV. Any attempt to innovate and increase productivity could be met with dire consequences. Returning to the health care analogy: Productivity improvement doesn’t simply mean the doctor isn’t paid – it means the hospital gets shut down.

Ironically, the credit hour rule has interrupted a nascent process wherein accreditation agencies were moving towards outcomes-based metrics for evaluating institutional quality. Last week saw publication of a draft report from the National Advisory Committee on Institutional Quality (NACIQI) – the Department of Education’s advisory committee on accreditation. The Department’s mandate to NACIQI for this report: fix accreditation to improve assurance of financial integrity and academic quality.

The report intentionally provides many options for the Department. But one clear theme emerges from the document: that both accreditors and the Department should base their judgments on outputs, not inputs. Specifically, the government should adopt “quantitative performance criteria” to evaluate institutional quality and determine eligibility for Title IV.

Such an approach would, by creating a federal process that assessed colleges based on “quantitative performance criteria” that are not financial in nature, give the government a bigger role in judging institutional quality than it has now. NACIQI goes out of its way to note in the report that without such criteria for determining Title IV eligibility, the Department’s actions have led to an “array of consequences that are neither appropriate nor desirable.”

NACIQI’s recommendation is a natural byproduct of a number of recent initiatives at regional accreditors. In 2001 the Western Association of Schools and Colleges revised its accrediting standards to shift the focus of institutional effectiveness evaluation from “inputs” to “outcomes” and followed on this change with a mandate that each accredited institution build the data resources necessary to enable effective measurement. The Higher Learning Commission, an early adopter of outcomes assessment through its AQIP protocols, recently announced its receipt of a grant from the Lumina Foundation to support its Beta review of Lumina’s Degree Qualifications Profile, a system of outcomes that are intended to provide a standardized set of learning outcomes that should be achieved by students graduating at the associate, baccalaureate and master degree levels. Perhaps the most innovative approach, however, has been that taken by the Northwest Association through its endorsement of the competency based learning methodology of Western Governors University, a delivery model that eschews credit hours in favor of a self-paced, competency based educational design that reduces tuition to less than $3,000 per six month term.

In time, we expect that market innovations will persuade the Department of Education to repeal or clarify the credit hour rule. The tragedy is that for the next several years, these productivity-enhancing models will remain very much outside traditional higher education, rather than evolving within and in close connection with traditional colleges and universities.

In a misguided effort to treat a mild cold afflicting higher education, the U.S. government has put the patient into a coma – and no one becomes more productive in a coma. The new credit hour rule is a classic example of President Reagan’s famous dictum: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.”

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