Voices in Education

Trade-Offs Matter When Looking Abroad for Higher Education Solutions
Until about a decade ago, American policy makers rarely looked abroad for policy solutions in higher education. After all, the United States was the country that invented mass higher education and perfected the research university: what could it learn from anyone else?

In recent years, however, policy makers have reassessed American preeminence in the field. Concerns about rising tuition prices, student debt, and diminishing returns to a degree in the labor market suggested that there was room to learn from others. As a result, calls for the United States to adopt policies from countries as far apart as Australia, Chile, and Germany, are now common. While many of these policies have their merits, the contexts from which they grew and the implicit trade-offs they entail are given short shrift.

For instance, Australia’s famous income-contingent loan system, called the Higher Education Contribution Scheme (HECS) or the Higher Education Loan Plan (HELP), has attracted a great deal of favorable attention from the US over the years. Proponents note the efficient way the government collects the loans (through the tax system) and that the government historically did not require graduates to make payments until they earned the national average wage (about $48,000 US). Anxiety over student debt and college costs in the US has made this design look appealing.

The problem is that the program’s record, while impressive in the Australian context, is unlikely to be repeated in the US. The Australian loan system historically had high repayment rates because loans were effectively restricted to students in public four-year colleges, where the government capped both enrollment and tuition. Such an approach would likely receive broad opposition in the US where the loan program is intentionally designed to serve a more open and diverse higher education system. Loans are available at private institutions—some of which charge fees four or five times those of public four-year colleges—and to students in shorter vocational programs (such as associate degrees and certificates) which are generally open to all students through community colleges and for-profit institutions, but whose graduates tend to have less success in the labor market. Limiting access to loans would almost certainly improve loan performance and allow the government to provide more generous repayment terms for those who still receive them, but that is a trade-off few US policy makers could support.

Trade-offs in higher education policy are also evident in how other countries set tuition fees. In the early 2000s, some German states famously experimented with charging tuition fees, but by 2012, all returned to the free-tuition approach. A model to emulate? Possibly. But it is worth remembering that Germany does not offer free tuition by dramatically outspending the US. Rather, the country admits a smaller proportion of its youth to higher education, pays its tenured professors less, and in general, spends about half as much per student as the United States. Are Americans prepared to accept large cuts in higher education spending and fewer students admitted to college, in exchange for German-style free tuition? Trade-offs matter.

Similarly, Chile’s new free college program (known as “gratuidad”), which in fact only covers students from the poorest 60 percent of families, has admirers in the United States as well—the expansion of New York’s Excelsior Scholarships proposed by former Democratic gubernatorial candidate Cynthia Nixon would in some ways have closely resembled the Chilean program. Though widely seen outside the country as a means of expanding access to college, it is not entirely clear that this is the case. The number of first-year students entering higher education has remained unchanged since 2014, and there is some evidence of middle-income students crowding out poorer ones. Moreover, the substantial cost of the program has been borne partly by universities themselves (who receive less funding for gratuidad-eligible students than they would have received in tuition) and partly by the country’s scientific establishment, which now has to compete with gratuidad for funds. Targeted free tuition has its merits, but it nevertheless involves trade-offs that would be unpopular in the United States.

In our new edited volume, International Perspectives in Higher Education: Balancing Access, Equity, and Cost, out in January from Harvard Education Press, we provide both global overviews of key topics in higher education, such as admissions policies, cost-sharing and tuition, student aid, and private education, as well as profile some countries which have undergone intriguing policy experiments which are of specific relevance to the United States. What we find, over and over, is that interesting policies are almost always grounded in specific policy contexts which make them difficult to import to the US. That does not make them bad ideas; nor does it mean that American policy lessons cannot draw lessons or inspiration from them. But pursuing these ideas does risk undermining other values that US audiences hold dear, such as open access to universities, high-quality faculty, and world-class research. Maybe those values are worth sacrificing—but the trade-offs should be made explicit. In other words, it is important to understand the contexts as well as the policies and the trade-offs as well as the payouts. The more all policy makers can manage that, the better the policy making will be.

About the Author: Jason D. Delisle is a resident fellow at the American Enterprise Institute. Alex Usher is president of Higher Education Strategy Associates. They are the editors of International Perspectives in Higher Education: Balancing Access, Equity, and Cost (Harvard Education Press, 2019).