In the Nation's Interest

Fixing Our Broken Colleges: Competency-Based Education and Reauthorizing the Higher Education Act

by Monica Herk May 14, 2015

It is that time of year again.  Students are graduating from high schools and colleges.  The press will be full of reports of who is delivering what commencement address where with what sage advice for all those new grads.  Booksellers will do a brisk business in Dr. Seuss’s Oh, the Places You’ll Go.  Meanwhile, for the approximately two thirds of high school graduates starting college next fall, schools have been chosen and deposits sent.  Visions of the college adventures that lie ahead may be dancing through their heads… while their parents ponder the tuition bills to be paid.

As one of two CED staffers personally involved in our nation’s graduation pageant this year, I in no way want to diminish the very real accomplishments of all these young graduates, or their excitement and enthusiasm about moving on to the next stage of their lives.  They (and the parents who supported them) are right to reflect on and celebrate all they have accomplished and what lies ahead.  Far be it for me to rain on anyone’s parade.

Yet even as we celebrate this year’s graduates, we should not completely forget that our system of postsecondary education is broken in many ways – or if not completely broken, then certainly in need of serious improvement and revamping.

Let’s look at the facts.
• 17% of employers say that recent college graduates they hire do not have adequate skills and require further training.  The figures are even worse for high school graduates.
• Even during the height of the recession with 15 million unemployed, the so-called “skills gap” meant that 2.1 million positions went unfilled because employers couldn’t find applicants with the skills to fill them.
• Increasingly a 2- or 4-year degree is a prerequisite for many jobs, including jobs that previously did not require postsecondary credentials.  For example, 65% of job postings for executive secretaries and executive assistants now call for a bachelor’s degree, but only 19% of current executive secretaries and assistants hold a bachelor’s degree.  Some analysts project that almost two thirds of jobs will require a postsecondary credential by 2020.
• Meanwhile, just when a postsecondary credential has become a near-requirement for entry into the middle class or higher, the cost of that credential has been skyrocketing.  Since 1978, college tuition and fees have increased 3.5 times faster than overall inflation, and almost twice as fast as increases in health care costs.1

• By the end of 2014, total student loan balances reached $1.3 trillion, more than tripling since 2004 due to larger numbers of borrowers, more private loans, and larger loans per borrower.  By 2012 the average balance per borrower was almost $25,000, and student loans ranked second only to mortgages among household debt.2   With many of these loans guaranteed by the US government, some have warned of a “student loan bubble.”

To make matters worse, these trends are occurring in the midst of rising income inequality in the US and are likely contributing to that inequality, at least for the bottom-middle of the income distribution.

In one sense, the solution is clear: America’s postsecondary institutions need to simultaneously become more effective and more efficient.  That is, they need to educate more students to a higher level of skills and knowledge, while doing so at a lower cost per student.

Of course, achieving that solution is a bit more challenging.  Fortunately digital innovations – in the form of computers, communications, and “big data” – may be opening the door to a disruptive transformation of the postsecondary sector through a shift to competency-based education.

Competency-based education is the idea that the primary unit of measurement and completion in education should be the skills and knowledge learned (an outcome) rather than the time spent achieving them (an input).  Among the historical accidents of the postsecondary system that we inherited largely unchanged from the late 19th century is that our primary measure of postsecondary learning is the credit hour or Carnegie unit.  This was an innovation when it was originally introduced, but today we can and should do better.  Another 19th century legacy we have inherited is that our standard “unit” of postsecondary education is a 4-year degree (and more recently, 2-year degrees and other credentials).  These 2- and 4-year degrees bundle together coursework in a variety of skills and knowledge – but always in predefined, 2- and 4-year chunks.  A student who felt that she could master the knowledge and skills of an undergraduate major in economics in, say, 1.7 years would be hard-pressed to find a postsecondary institution that would accommodate her.

Especially for younger workers, employers use the degrees students have completed (as well as the quality of the institution they attended) as “signals,” albeit very noisy ones, of what the student knows and can do.

In fact, much of what students spend their 4 or 2 years studying may be largely unrelated to the skills and knowledge that employers are seeking.  This is not to say that the liberal arts aspects of postsecondary education are unimportant or lacking in value -- just that it may be unfair and inefficient to require middle-income and poorer families to go into debt to purchase a 2- or 4-year degree consisting of many classes that are largely irrelevant to their goal of obtaining a job, especially when such degrees cost upwards of $16,000 per year in tuition,3 not to mention forgone earnings.

Ultimately employers are looking for employees who hold a particular mix of skills, with the precise combination dependent on the job in question.  Some of these skills are general – such as communication skills, ability to work well with others, good judgment and critical thinking – and are demanded across a wide range of jobs.  Others – such as knowledge of a particular technology or programming language – are very specific to particular jobs.

To the extent that employers can clearly communicate the skills and knowledge they require for particular jobs, it will throw open the doors to a new world of competency-based education.  Existing 2- and 4-year colleges and universities will be better able to align their courses to these competencies, at least for those students who are primarily interested in preparing for later employment.  Moreover, providers utilizing other approaches could enter the postsecondary “space.”  Think massive online open courses (MOOCs), coding boot camps, or other possibilities that have yet to be developed.

What else will it take to get to this promised land of competency-based education?  It will take objective validations -- validations that employers trust – that job applicants actually have the competencies that they claim, beyond just having taken a course or received a “badge.”

My belief is that transformation will require the careful definition of some of these essential competencies that cross many jobs.  For example, what is it that employers mean when they say they want “critical thinking” skills, and is “critical thinking” the same for every job?  And once those competencies are clearly defined it will take the development of trusted, valid assessments of those competencies, administered by organizations independent of the providers of the education and training involved.  Think of something similar to the SAT or ACT, but for adults and geared to the general skills and knowledge employers are seeking.  It is likely that there would need to be more than one assessment, geared to the variety of skills different jobs require.  Nor would all of these assessments necessarily be multiple-choice, bubble-in-the-answer tests.  The assessment industry has advanced in its ability to assess a broader variety of skills “authentically,” including through asking respondents to react to complicated scenarios online.  The key is to develop assessments that are reasonable predictors of future job performance.  These assessments need not be perfect, they just have to provide a better “signal” than what we have now.  But it’s hard to imagine a noisier signal than our current system of relying on what degree students have and where they received it.

Once a critical mass of employers trust a particular assessment, find it useful, and request that applicants submit their assessment results as part of their employment application, the postsecondary sector will start to change.  Some of the benefits of this change will include:

• New providers and approaches to helping individuals master the competencies in question will emerge.  Some will probably occur at existing 2- and 4-year institutions, but others may occur in totally new venues using new approaches.  The latter will benefit non-traditional learners – such as mid-career adults who need to retrain due to job loss or just because they want to upgrade their skills.
• Postsecondary education will become “unbundled.”  Individuals will no longer be required to “purchase” a 2- or 4-year degree from a single vendor.  They will be able to piece together education in a variety of skills from a variety of sources – including their own labor force experience – as long as they can demonstrate their mastery of those competencies through valid assessments that employers trust.
• Employers could use the assessments to assess the skills and gaps of their current workforce and use the results to plan for their internal workforce development efforts
• The postsecondary sector would become more efficient.  Students of all ages would not have to waste money and seat-time relearning skills and knowledge they have already mastered.  This will reduce the cost barrier for lower-income students seeking better jobs, as well as the student debt burden.

Much lies between where we are today and this brave new world of competency-based education.  To my mind, the biggest challenge is the development and significant adoption of valid competency assessments for adults of all ages, but especially those newly entering the labor market.  Once at least a couple of those assessments succeed as “proof of concept,” I believe the world will change rapidly.  There are just too many forces making our current postsecondary system unsustainable.

That said, inertia will likely be significant in the short run.  Congress will soon be taking up reauthorization of the Higher Education Act (HEA), which is the federal law governing postsecondary education.  Any reauthorization bill is unlikely to radically revamp our approach to postsecondary education.  But Congress would do well to provide more opportunities and flexibility for competency-based approaches in the HEA reauthorization, for example by making it possible for more students to receive federal student aid for competency-based programs.  (With a few exceptions, currently students can generally use federal student aid only at schools that use a traditional credit-hour approach.)

So don’t expect the postsecondary landscape to change dramatically in the next year, but hold onto your hats over the next decade.  I expect we will be in a much different place ten years from now.  But for right now, give a big congratulations and hug to any graduates in your life.  They deserve it.

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1. http://www.bloomberg.com/news/articles/2014-08-18/college-tuition-costs-soar-chart-of-the-day; http://trends.collegeboard.org/sites/default/files/2014-trends-college-pricing-final-web.pdf

2. http://www.newyorkfed.org/newsevents/mediaadvisory/2013/Lee022813.pdf; http://www.federalreserve.gov/releases/g19/current/ 

3. In 2011-12, the net price (including loans but after grants and aid) that students paid for tuition, fees, room and board at a public 4-year institution averaged $16,300.  At public 2-year institutions the corresponding figure was $11,300.  Lower-income families tend to pay somewhat less than this, due to higher aid packages, but not significantly less.  For example, students from the second lowest quartile of family income paid $15,300 on average after grants and aid but including loans. http://nces.ed.gov/pubs2014/2014902.pdf

Monica Herk is Vice President of Education Research at the Committee for Economic Development.