A Bipartisan Step Toward Smarter College Accountability
Rarely do Washington policymakers find common ground on higher-education reform. Conservatives often call for discipline in how taxpayer dollars are spent. Progressives typically focus on protecting students from predatory institutions and crushing debt. Yet in the recent reconciliation legislation, the One Big Beautiful Bill, both sides can find something to like. Its new accountability standards, connecting financial aid to the earnings outcomes of college majors, mark a major step forward for students and taxpayers alike.
To be sure, education is its own reward, and ideally, the system would not reduce learning entirely to a financial value. But with tuitions rising and debts exploding in a system of federal grants and loans, the lack of adequate safeguards against low-financial-value offerings has been a serious problem. Policymakers have long known that many programs, particularly in the for-profit and non-selective sectors, saddle students with loans they cannot repay. Yet the federal government continued to underwrite these programs. The new law changes that. For the first time, all institutions and programs using federal aid will face real consequences if the earnings of more than half of their graduates fall short. Federal dollars—and the students who rely on them—will be steered away from programs that predictably lead to financial hardship.
That’s a step forward for consumer protection and for taxpayer accountability. It marks the greatest step forward in increased accountability on colleges since the creation of the college scorecard during the Obama administration, which publishes graduate earnings for every college eligible for federal aid, and the parallel introduction of rules demanding that graduates of some schools be able to find “gainful employment” after graduation.
The victory in the law was won in part due to the simplicity of the policy, tying a program’s eligibility for federal aid to graduates’ earnings. But that simplicity comes at a cost. The new accountability system measures one side of the value equation—how much graduates earn—while ignoring the other side—how much they paid to get there. That omission matters. A program whose graduates earn $60,000 might look great on paper, but not if students borrowed $80,000 to complete it. Conversely, a low-cost community-college program that produces graduates earning $40,000 in steady employment could be an excellent investment, even if those earnings fall short of the federal benchmark.
In short, the new law rewards high earnings but not value-for-the-price. It treats expensive success and affordable success as equal, when in reality the latter is far better for both students and taxpayers. What we need next is a measure of return on investment, not simply return.
Price is not a trivial factor—it’s the linchpin of value. When policymakers ignore cost, they risk incentivizing institutions to spend more rather than spend wisely. Colleges can raise tuition, add luxury facilities, or pour millions into marketing, so long as graduate earnings remain high enough to clear the federal bar. Over time, that can drive up costs across the system, leaving students with more debt and taxpayers with a larger bill.
Adding price to the equation would repair the incentive. It would reward programs that deliver strong outcomes at a low cost—programs that tend to serve the lowest-income Americans. Community colleges, regional public universities, and many workforce-training programs would likely fare better under an ROI-based system than they do under an earnings-only approach. By aligning accountability with affordability, policymakers could create new incentives for institutions that already do more with less.
Adding price to the accountability equation would also give a fairer shake to programs that prepare students for public-service occupations—teaching, social work, public health, and others—where earnings may be modest but the societal value is immense. Under an ROI-based system, such programs could preserve access to federal aid by keeping tuition low enough that graduates can manage their debt on a public-sector salary. That would protect both access and mission: ensuring that federal dollars continue to support careers that serve the public good.
This is about both market discipline and equity. When institutions are rewarded for delivering strong outcomes at a reasonable price, they have an incentive to innovate and control costs. At the same time, high tuition and debt burdens disproportionately harm low-income and first-generation students. Rewarding affordability advances fairness and expands opportunity. These dual perspectives lead to the same conclusion: measuring only earnings is an incomplete measure of success.
Fortunately, fixing this doesn’t require throwing out what works. The foundation laid by the new law is solid. Lawmakers could build on it by incorporating price or borrowing data into the accountability framework. For example, programs might be assessed based on the ratio of graduate earnings to typical debt, or relative to the total cost of attendance.
A value-based approach would do more than prevent waste; it would transform incentives. Colleges that deliver strong outcomes at a low cost would rise to the top. Institutions that rely on high prices to maintain prestige would face pressure to justify those costs. Students would gain clearer signals about where their education dollars—and their time—are best spent. Taxpayers would get more value for every federal dollar invested.
Accountability in higher education has always been a politically fraught issue, pitting calls for access against concerns about quality and cost.
Accountability in higher education has always been a politically fraught issue, pitting calls for access against concerns about quality and cost. As conservatives and progressives, we don’t always see eye to eye on how to fix higher education, and there are other aspects of the law on which we disagree. Yet on this, we agree: students deserve programs that are worth their cost, and taxpayers deserve to know they’re funding value, not vanity or profiteering. The One Big Beautiful Bill Act brought us closer to that goal. Now Congress should take the next step—and make sure our accountability system reflects not just what graduates earn, but whether the price paid was fair to them and to taxpayers.
