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The state universities that are best—and worst—on prices and outcomes
Plus: The misleading and outright deceptive ways colleges conceal their prices; bipartisan higher ed reform ideas; and a better approach to regulating crypto firms
Ranking the 50 state public university systems on prices and outcomes: Students consistently report that their primary reasons for attending college are getting a better job and increasing their earnings potential. That makes considering the return on investment (ROI) that different programs provide a crucial part of assessing their value. In his expansive and ongoing research on the financial value of more than 60,000 postsecondary degrees, FREOPP Senior Fellow Preston Cooper ranked the 50 U.S. state public university systems by median ROI. He found that the highest-performing states tend to have a well-developed technical college system and a preponderance of career-oriented majors at four-year schools. States that didn’t perform as well can increase their aggregate ROI by implementing performance-based funding and removing restrictions on high-value majors.
Which state was the winner in Preston’s rankings? South Dakota. South Dakota’s public colleges and universities have a median ROI of $217,000—the highest in the country. Next-highest were Minnesota, Iowa, Kansas, and Pennsylvania. The poorest-performing states? Hawaii, Montana, Louisiana, Connecticut, and New Mexico. You can see Preston’s analysis and data on all 50 states at FREOPP.org.
How colleges conceal their true prices: As Preston reported in the inaugural issue of his new newsletter “The Tassle” last month, the Government Accountability Office recently revealed that just nine percent of colleges accurately report the net price of tuition when they communicate financial aid offers to prospective students. For instance, many colleges don’t distinguish between grants and loans in aid offers, making it unclear what money students are given versus what they will have to repay. These kinds of misleading and sometimes outright deceptive practices are part of a system-wide lack of transparency that crushes low-income students with debt, allows colleges to continue to jack up prices, and contributes to a broken higher education market. Increasing price transparency is a common-sense reform that would have an outsized impact.
Three bipartisan higher education reform ideas for the new Congress: Although a closely divided Congress makes prospects for major legislation appear dim, there are areas of agreement where Republicans and Democrats could cooperate on higher education reform. In Forbes, Preston recommends that Congress consider measures to enact student loan risk-sharing, fund work-study with an endowment tax, and reform college accreditation.
→ To hear more from Preston about how opaque and unaccountable prices drive student debt—and what Congress should do about it—check out his panel at FREOPP’s Freedom & Progress conference, or listen to his conversation with Leah Murray and Marty Carpenter on the Inside Sources podcast.
Regulate stablecoins and crypto firms like banks: Last year’s collapse of cryptocurrency exchange FTX and blowup of the algorithmic stablecoin Luna prompted a renewed interest in regulation among policymakers and the public. In National Review, FREOPP Visiting Fellow Jon Hartley argues that both crypto firms and stablecoins are susceptible to runs and misuse of customer funds, and they should be regulated like banks to protect customers and bring stability to the sector. This would mean applying rules to govern customer deposits in crypto firms and mandate the full backing of stablecoins.
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