College accreditation and government regulation fail students and entrepreneurs

By Jason Stoffer , written on September 11, 2013

From The News Desk

In 2009, I flew to Washington DC to meet Paul Freedman, an audacious young entrepreneur building what he hoped would be the world’s best community college.

As the son of UC-Berkeley professors, Paul wanted to give the higher risk students who typically attend community college the same educational opportunities he himself had accessed. He envisioned a school that provides individualized student support, gives students the skill set to transfer to the 4-year school of their dreams and incorporates the latest innovations in education technology. We invested in Paul’s company, Altius Education, which aimed to realize Paul’s dream through Ivy Bridge College (IBC), a partnership he launched with Tiffin University, a strong regional school in Ohio.

Since then, Ivy Bridge has changed the lives of thousands of students. Within three years of enrolling at IBC, 64 percent of IBC students graduate or transfer, a rate at least 50 percent better than the national average for other 2-year schools, according to industry-standard benchmarks published by CollegeMeasures and Complete College America.

IBC students have gone on to study at 4-year schools including USC, Penn State, Texas A&M, Pepperdine and Ohio State. We also built a competency-based learning platform called Helix, which uses assessment to understand what a student knows and then serves up course material to fill in the gaps. EDUCAUSE and The Gates Foundation awarded us a Next Generation Learning Challenge grant, to further develop the platform's features.

In 2010, based on Ivy Bridge’s track record of helping a high-risk student body succeed in their goals, we became more public in our desire to spin out IBC into a separate stand-alone institution. We hoped to parlay our early success into building the most innovative community college in America.

As we began to apply for the necessary approvals, the regulators at the Higher Learning Commission (HLC), the body that regulates colleges in the Midwest, acted to stymie our plans. They forced us into a change of control process when all we wanted was approval for a branch campus in California. In non-regulatory parlance, that means they created additional layers and processes to achieve independent accreditation, in a clear effort to prevent us from ever becoming a standalone university. The regulator’s hostility came to a head in late July, when HLC ordered the Ivy Bridge program to be terminated by mid-October.

In every industry, new entrants, funded by private capital, drive innovation and shake up existing markets. General Motors never could have created Tesla and Motorola couldn’t invent the iPhone. In post-secondary education, new for-profit entrants into the system are just not allowed. Since 2010, HLC has only approved candidacy for accreditation of a single for-profit school that has been started in the past decade – Rocky Vista University. At the same time, it has placed one of the biggest for-profit education organizations in the country, University of Phoenix, under regulatory sanctions.

We wanted to make sweeping changes to how colleges are run, changes that would rock the existing system to its core.

These include:

  • A $5,000 degree program
  • A competency-based instructional approach where degrees are granted based on achievement of learning outcomes rather than time in class
  • Separation of instructors and graders, so instructors are vested in helping the students vs. having to both help them and grade them
  • Compensation of instructors based on how well they affect student outcomes
The regulators represent legacy constituents that appear ready to do anything to prevent these changes. These hidebound incumbents want to maintain their ability to teach students the same way they did a hundred years ago. This is at a time when new technologies and approaches can truly improve how students learn.

Investors are excited about the potential: $600 million in venture capital was invested in education in 2012, five times more than 2002. However, this investment is largely going into technology tools, services and supplemental education. Regulators have stifled those investment dollars from going to where they could have the most impact – reinventing the core of what happens in the K12 and college classroom.

These regulatory actions are clinging to outdated practices and causing the US post-secondary system to fall behind global competitors. In 1995, the U.S. ranked 2nd after New Zealand in terms of the higher education graduation rate among 19 OECD countries with comparable data. In 2010, its ranking dropped to 13th among 25 countries with comparable data.

Our society is in a place where our government and the regulators they enable are counting on incumbent non-profit schools to transform education in the US. New schools cannot be started because for-profits are collectively demonized as capricious actors who do not have the students’ best interest in mind.

I’d ask where we would be as a society if the legacy AT&T monopoly was in charge of mobile innovation and bringing the Internet to the masses or if agriculture was viewed as a vital national interest like in Cuba and we could only get bread at government stores?

We are allowing the government to behave this way in post-secondary education and, in doing so, delivering a poor legacy product to students while our international competitors are leaving us in the dust.

[Image courtesy Chris Devers]