Ezra Klein on Obama’s New College Plan: “bringing the cost-control theories of Obamacare to the higher-ed sector”

August 22nd, 2013

The core of President Obama’s plan to cut higher-ed costs is “pay-for-performance.” The idea is to use federal financial aid to move colleges away from the current pay-for-enrollment model and toward a model in which they make more money if they graduate more students, hold tuition costs down, etc. (This is, in a sense, bringing the cost-control theories of Obamacare to the higher-ed sector.)

Oh, great.

And also like Obamacare, the President can make many of these changes unilaterally. Who needs Congress?

The easy thing to do here is dismiss the whole effort because the Obama administration can’t get anything through the divided Congress. That’s more or less the approach NBC’s First Read took. “Few believe his push will make any difference to the gridlock in Washington,” they wrote. “Here was Tuesday’s Buffalo News headline ahead of the president’s trip: ‘Obama’s road trip unlikely to change D.C. stalemate.’ ”

What’s interesting about this plan, though, is that only half of it needs congressional approval — and it’s the half that comes later, and that can be done quicker. The Obama administration doesn’t need congressional approval to build the performance measures. That’s something the Department of Education can do on its own.

The fact sheet is pretty clear on this: “Before the 2015 school year, the Department of Education will develop a new ratings system to help students compare the value offered by colleges and encourage colleges to improve.” Look ma! No Congress!

In other words, Obama is starting something he know he can’t finish, and leaves his successor with a framework, and all the hard work.

So what Obama is really promising to get done in his second term is to create the infrastructure necessary for a pay-for-performance system: the definition of performance and the routine collection of the underlying data. He doesn’t need Congress for that. When that’s are done, Obama can try to get legislation passed through Congress to tie them to financial aid by 2018. But even if he fails, he will have set the next president up to finish the job, as the technically hardest and most time-consuming task will be complete.