Paul Ryan needs to take a good look at Jeb Bush's higher education reform plan.
Last week, Speaker Paul Ryan unveiled "A Better Way," a policy blueprint for a Republican approach to "poverty, opportunity, and upward mobility." Ryan's previous blueprints decisively reshaped Republicans agenda on entitlements, and my Manhattan Institute colleague Scott Winship deemed Ryan's safety-net reforms "ambitious and distinctive."
“When Hillary Clinton presses Congress to fund "debt-free" college, a Republican counter offer to streamline federal programs will look pretty flimsy.”
Yet when it comes to higher education reform, "A Better Way" does not go far enough.
Ryan could have pulled a bold agenda right off of the shelf. For too long, the debate between Democrats and Republicans has been whether to raise or lower student loan interest rates. Though it was largely drowned out amidst the media circus of the Republican primary, Jeb Bush put forth a plan to fundamentally restructure the economics of American higher education. Republicans should not let Bush's plan become a footnote; it ought to be the gold standard by which all other proposals are judged. Ryan's plan takes Republicans a step forward by properly diagnosing higher-ed's ailments, but doesn't prescribe anything tough enough to cure them.
Ryan's plan notes that it's nearly impossible for students "to find the information they may need to choose the right school." That's true, and largely due to a national student-level data ban that the higher education lobby won in order to obscure a detailed picture of the expected value of their diplomas.
Bush would have repealed that ban, enabling states to create databases tracking post-college earnings, unemployment rates and debt-repayment rates. Colleges may fear this transparency, but students have a right to know what their degree would be worth before making the biggest economic decision of their young lives. Ryan's plan doesn't call for repealing the ban, merely asserting that the existing data should be streamlined "in a format that is easy to understand." But formatting doesn't much matter if the most useful information remains secret.
On student loans, Ryan's plan notes that the "complicated system of federal aid leaves students confused about the options they have to responsibly pay for their college education." That's true too, but the public is concerned with the financial burden of student debt, not the paperwork. When Hillary Clinton presses Congress to fund "debt-free" college, a Republican counter offer to streamline federal programs will look pretty flimsy.
Bush's plan would have overhauled the whole system, replacing all federal loan programs with a line of credit up to $50,000 for high-school graduates who wish to enroll in postsecondary education. For every $10,000 dollars they borrowed, students would repay 1 percent of their income for 25 years. Repayment would be processed through tax withholding, essentially eliminating defaults and ensuring that no student sees his credit history wrecked. Just as importantly, the firm cap on federal lending would finally give colleges an incentive to contain their costs. Furthermore, by allowing students to spend that money on a wider array of postsecondary options, Bush's plan would have fostered innovation in a notoriously stagnant sector.
But one Bush reform is conspicuous by its absence from Ryan's plan: institutional risk sharing. Colleges should have "skin in the game" on student loans. If students can't pay back their loans, colleges should be on the hook for some of the balance. Introducing that small amount of risk would give postsecondary institutions a real incentive to contain their costs and make sure they're providing an education that's worth it.
This idea, pioneered by American Enterprise Institute scholar Andrew Kelly, is the only policy initiative that both Hillary Clinton and Donald Trump agree on. So it's disappointing that Paul Ryan, who has injected so much fresh thinking into the Republican party over the past several years, left this one on the sidelines.
All in all, though, Ryan's plan is still a big step forward for the Republican Party. For too long, Republicans have done little more than complain that the federal government gives out too much money. Ryan's plan moves beyond this intellectually shallow and politically unpalatable platform. It identifies real structural problems, and at least gestures towards solutions.
Ultimately, the speaker of the House can only do so much to set his party's agenda. Bold leadership sometimes simply has to come from a presidential nominee. In a perfect world, Trump would pivot from defending Trump University to making higher education great again by adopting Bush's high-energy higher-ed plan. But that may be a thing more ardently to be wished for than seriously to be expected.
It may be left to policy entrepreneurs in Congress to push their party forward. No doubt, Clinton will call for unprecedented higher education spending. Republicans shouldn't counter simply by arguing against more spending. They should put forward an agenda to make the economics of higher education actually work for students.
Jeb Bush has spent many years pushing states toward innovative K-12 reforms, and it's clear that he intends to continue that work. Here's hoping he also helps Congressional Republicans, and American students, by leading the national debate on higher education in the years to come.
This piece originally appeared in U.S. News & World Report
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Max Eden is a senior fellow at the Manhattan Institute.
Photo by Evy Mages / Stringer
This piece originally appeared in U.S. News and World Report