The University of Austin: a new hope for higher education?

Plus: FAFSA chaos portends a college enrollment collapse, and what to do about colleges that suddenly close.

Photo by Carlos Alfonso on Unsplash

IMPORTANT UPDATE: This will be the last newsletter I publish on the FREOPP Substack platform. Starting next month, I will transition this newsletter over to my personal Substack page. If you want to continue receiving updates from me, subscribe here.

Elite higher education isn’t terribly popular these days. Critics see many problems at top colleges: excessive costs, administrative bloat, outdated pedagogical models, and an abandonment of the principles of liberalism and free expression. Some of those critics have wondered whether we can really wait for elite colleges to fix their own problems. Instead, why not disrupt higher education from the outside, by starting an entirely new university?

In 2021, that’s exactly what several of them did. Spearheaded by several prominent public figures such as Niall Ferguson and Bari Weiss and backed by more than $200 million in philanthropic funding, the University of Austin was born. But as I explore in a new essay for Education Next, this new endeavor has run up against an underappreciated problem: red tape.

It’s too hard to start a new university

To get a new university off the ground, the first step is receiving permission from the appropriate state authorization agency. For the University of Austin to launch in Texas, this required more than a year of prep time, 2,000 pages of documentation, and ten months for the Texas Higher Education Coordinating Board (THECB) to process the school’s application. During that time, the University of Austin was barred from recruiting or enrolling students—and couldn’t even officially call itself a university.

But state authorization is just the first step. Most states, including Texas, require their colleges to be accredited or on a path to accreditation. This will add another five to seven years to the University of Austin’s approval process, not to mention millions of dollars and the attention of several full-time staff.

Most concerningly, accreditors are often skeptical of or hostile to different educational models that new schools might want to try. Mike Shires, a University of Austin official helping the school navigate these various approval processes, says that accreditors tend to engage in “benchmarking”—asking, in effect, whether a new school conforms to the practices of existing schools.

But that approach clashes with the innovative model that the University of Austin wants to pursue. “We’re trying to look different than other institutions—to blow up the departmentalized administrative process and create a more coherent whole,” Shires told me in an interview. “It’s very important to us that we’re allowed to hold on to that mission, and that we’re not going to be expected to go out and match whatever Baylor [University] or [the University of Texas] is doing.”

Why we need more colleges

I’m optimistic that the University of Austin will succeed, given the considerable resources, prominent public figures, and political capital at its disposal. But it may be the exception that proves the rule. Aspiring new universities without Austin’s profile often find these barriers to entry insurmountable.

As a result, almost all students attend colleges that first formed decades ago, if not centuries. The few “new” schools that have formed in the last quarter-century are mostly offshoots of existing universities. But while the number of degree-granting nonprofit colleges has stagnated since 1990, the undergraduate student population has swelled by 25 percent. Higher demand and inelastic supply explain the tuition hikes that college students have suffered over the past thirty years.

It may seem odd to worry about barriers to entry in higher education when college enrollment has started to drop and small schools are closing at a rate of one per week. But one major reason for falling enrollment is disillusionment: many Americans no longer agree college is worth the cost. To change their minds, colleges need to lower costs and improve quality. That will require innovation, which new institutions are best positioned to supply.

The University of Austin represents the hope that disruption can improve the college experience. But its experience also illuminates the artificial barriers that prevent American higher education from reaching its full potential. Read more in my full essay at Education Next.

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What I’m writing

• Protect students—and taxpayers—from the costs of college closures. (Inside Higher Ed) Philadelphia’s University of the Arts announced its closure last week, potentially leaving 1,200 students in the lurch. If they can’t transfer their credits somewhere else, those students could lose years of effort and tuition payments, while the government could be on the hook for millions in discharged student loans. We can only expect such closures to become more common as college enrollment declines. It could be time to revisit my proposal from 2022 to require colleges to insure themselves against closure risks, rather than passing the bag to students and taxpayers.

• New student debt relief rule goes further than you think. (OppBlog) I submitted my public comment on the Biden administration’s latest student loan cancellation proposal. The new scheme is more limited than the version the Supreme Court struck down last year, but still significant, as the summary of my comment up on OppBlog details. The comment raises three major issues with the regulation: the plan is likely illegal, it could unduly benefit wealthy borrowers, and the Education Department’s cost estimate of $147 billion could be too low.

What I’m reading

• Why don’t American medical schools produce more doctors? In a report for the Heritage Foundation, Jay Greene argues that monopoly control over the American medical school accreditation system is to blame. Medical schools are accepting and graduating fewer students relative to the population, even though there is no shortage of qualified applicants or residency slots. The solution, according to Greene: “Congress must break up the accreditation cartel.”

• D.C. passed a regulation requiring child care workers to earn college degrees, and it’s making the child care crisis worse. As Justin Zuckerman of Reason explains, the regulation may force veteran teachers out of their jobs and reduce the supply of child care—making it even more expensive. Day care for toddlers in D.C. now costs more than $24,000 per year.

• The FAFSA debacle may push some small colleges over the brink, warn Charles Ambrose and Michael Nietzel in Inside Higher Ed. The botched rollout of the new financial-aid application could reduce the ranks of college freshmen by 10 to 20 percent, the authors figure, though we won’t know the true impact until September. Some colleges will not survive a blow like that.

• Credentials below the bachelor’s degree level can help students prepare for a good job—if they’re in the right field of study. But a new report from Georgetown University suggests colleges are granting so-called subbaccalaureate credentials in all the wrong fields. In fact, 28 percent of these credential “have no direct occupational match” whatsoever.

What I’m doing

Check out my conversation with Michael Horn, who hosts The Future of Education podcast. We discuss the latest student loan cancellation news, attempts at higher education reform from left and right, and the best way forward on accountability for colleges.

One more reminder to subscribe here if you want to keep receiving this newsletter in July and beyond.

At the end of May, I visited the Galapagos Islands with my mother. What I love about this place is that its historic lack of land predators—including humans—means the animals are fearless. It’s possible to observe them up close; most are completely unbothered. I was fortunate enough to see this pair of blue-footed boobies engaged in a courtship ritual.

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