Last week President Barack Obama toured the country to promote an ambitious proposal to reform higher education by, among other possibilities, turning the federal student aid program into a system of carrots and sticks for colleges.

Kansas University officials say they are making progress in some of the key areas that could be tied to aid under the plan, but they hope any new system takes quality of education and other factors into account.

At the center of the plan would be a new “College Scorecard” released by the U.S. Department of Education that would rate institutions based on their access and affordability to students as well as student outcomes.

If Congress goes along with the president’s plan, the federal government would start distributing student aid based on the rankings. Currently the federal government gives out $150 billion each year in grants and loans, all of it based on enrollment figures for colleges. Kansas students receive about $1.27 billion in federal aid.

Incentives under scrutiny

How exactly the education department would measure things like student outcomes is still not decided, but already it is a source of controversy.

The White House offered graduation rates as one possibility. KU provost Jeffrey Vitter points out that the university has worked hard to build “a pipeline of getting students into and through KU.” The university currently shows the highest graduation rates for incoming freshman classes among state universities.

Vitter said he was concerned that a focus on graduation rates could erode the quality of education should colleges start competing over graduation rates, maybe even “giving grades away.”

“We’re working hard to increase accessibility and affordability (at KU), but we must protect quality as well,” he said.

The president would need Congress on board to distribute student aid based on the ranking system, but not to create the ranking system itself. The administration said that the education department will release the first edition of the scorecard in 2015.

More financial and informational transparency in higher education is something long overdue to many observers.

“We do a very bad job in higher education with providing parents and students with good information that they can use to make comparisons and wise decisions,” said Christopher Morphew, a professor at the University of Iowa College of Education and former KU faculty member.

Controlling costs

Under the president’s proposal, tuition costs and student debt levels at schools could also determine where aid goes.

The cost of college is something very much on people’s minds these days as tuition around the country rockets ahead of inflation. This year’s 4.4 percent tuition increase at KU is the smallest spike in more than 10 years. Most yearly tuition increases since 2002 have been at or above 6 percent.

Vitter pointed to KU’s cost-cutting program, dubbed “Changing for Excellence,” as one way the university is trying keep college affordable for students.

Looking at the higher education system as whole, colleges have few incentives to cut costs. Morphew points out that colleges try to attract students with luxurious housing and campus amenities.

Colleges effectively tell students: “We’re going to have the lowest student-faculty ratio. We’re going to have student life and campus life that is luxurious. If you want to start your own club, start your own club,” he said.

The end result is an “arms race” in spending among universities. And historically, that’s helped them attract high-ability students.

State partnerships

Another driver behind tuition increases is the decreased spending in real dollars on higher education among U.S. states. Kansas is no exception to that trend. The state is one of the few to cut higher education outright.

About $2.6 million in revenue from the most recent tuition increase at KU approved by the state’s Board of Regents is meant to offset state $5.3 million in state budget cuts to the Lawrence and Edwards campuses.

If tuition at Kansas schools stays on that path, and if the president’s proposals become law, college students in Kansas could be at disadvantage in the future.

With or without such a policy in place, Vitter said “we need a strong state commitment to go along with our efforts” to cut costs and maintain education quality.