The Great Stagnation, a continuing story

The Education Department did not go nearly as far as college leaders would have liked in backing away from a new rule requiring colleges to get approval from every state in which they operate distance education programs. But in announcing Tuesday that, for the next three years, the agency would not meaningfully punish institutions that have shown “good faith” efforts to get such approval…

Do you need to read further?  Abolish the DOE, I say.  The full, messy, and heartbreaking story is here.


Yes, a sad story, and a better example of stagnation.

But wait a second...all these colleges are fighting over a massive government subsidy in the first place: Title IV funding. Hardly seems unreasonable to demand return on that investment. Right?

Reading this story just shifted my worldview about 20 degrees to the right.

Cui bono? What's the lobby behind these stupid rules: Small colleges? Certain states with no big universities? Or DoE administrators themselves for the sake of power?

I had the exact same question. Who benefits from this waste? It does seem like a case of power for power's sake. A bureaucracy justifying its own existence by pretending to play an important role in things.

Then again, maybe there are a lot of universities in favor of it and we're just not hearing that part of the story. It could be another case of the casino industry in Vegas lobbying against online gambling.

Tyler, are you so lazy that you post this sort of thing and can't even be bothered to state exactly what your objections are, much less defend them? You increasingly give the impression of someone who lets his ideology do his thinking for him.

Anonymous, we all get frustrated with Tyler sometimes but I think that the right way to see this is to perceive it as a pedagogical technique. If you want to learn stuff, you--The Reader--also need to do some thinking.

When Tyler is being especially incomplete, as here, I think he really does want you to think why this is fairly obviously against the best-known/most robust principles of economics and WHY.

I'll do your homework for you, but just this once. In this case, the government is preemptively legislating against what may or may not become a problematic industry in the future. In doing so, they are reducing the future consumer's choice set, and raising prices for a class of goods that was supposed to induce cost-savings. Within the (diminished) number of online education providers that make it to market, their opportunities to try new things to meet the mysterious consumer demand is truncated. There are many innovations that will never happen because they won't conform to regulations. But since the regulations are being made ex nihilo, they aren't solving any sort of existing problem!

In short, this is classic regulatory overkill.

In the future, I would ask you to be more kind to Tyler.

Asides from the "pedagogical technique" angle, I might offer another (rather perverse) incentive for being intentionally vague and incomplete. It becomes extremely difficult (relative to a lot of other online bloggers) to criticize a specific position that Tyler holds. Simply because most of his statements are very equivocal and come with several riders and counterpoints that are often hard to precisely define in hindsight.

As a longtime reader my interpretation of Tyler is something like this: the world is an exceptionally complicated place, many phenomena are very very complicated relative to what people think, lots of people on different sides of an issue have different pieces of the truth, and, finally, it's often best to take many of the best explanations from different sides of the arguments (which often have more than two sides) and combine them--provided that they aren't mutually exclusive.

That's why Tyler always sounds like he's hedging: because the world is just complicated.

Can't disagree with your point about the issues being complicated. All I say is that, if an expert like Tyler can't ultimately take a stand, then what chance do the rest of us have?

Thanks for the effort, ck, but your answer doesn't cut it either. Both Tyler and you failed to address what legitimate reasons might exist for these regulations and argue why those reasons don't hold water. Your assertion that these regulations would solve a non-existent problem is not one that their advocates would agree to, and I'm just left with the sense that you're arguing that "regulation = bad" on general principal without addressing the particulars. I give you a C- on this assignment, while Tyler gets an incomplete.

Could you think of any legitimate reasons that might exist for these regulations?

Anonymous, you may be under the missimpression that this blog is Tyler's class teaching notes.

Tyler posts a wide range of material, including food and restaurants, politics, economics, basketball, ... the list is endless. Sometimes he posts long segments from other authors, sometimes he posts long segments of his own. Other times it's just a link to something he found interesting. He owes us no obligations; his blog is interesting, it's free, and it gives us a lot of material to pursue on our own.

If you feel you are entitled to the kind of detailed exposition you demand, you probably need to pay the tuition and sit in his classroom.

I tend to agree with the part of Anonymous' point that seems to be demanding precision. I doubt that precision is the sole domain of the classroom. A little more precision might be salutary for MR posts. For once, this is a Tyler pathology rather than an Alex one. Ken Rhodes' "Go elsewhere" is hardly a constructive response to legitimate criticism.

How can you have "precision" when the specific action that's being criticized is the propensity to regulate in advance of the discovery of a problem?

Now you may hear my interlocutor "Anonymous" say that this is just lazy ideology. I politely but firmly disagree. If Hayek taught us only one true thing, it was that knowledge is widely dispersed and the market is a good process for discovering what works. If this sounds to "ideological" to you, simply eliminate the word "market" and boil it down to its essence: trial and error.

We're human beings, not far-seeing gods. Crystal balls are fake.

That would be true if "precision" was the subject of Anonymous' comment. It wasn't. "Expository detail" was what he asked for.

Tyler writes a LOT of posts, and he has another job, too. He is entitled to give us as much or as little expository detail as he feels like. And if you thought Tyler's one-liner was imprecise, you better go back and study it a little harder.

I think internet learning has an enormous potential for actually educating a large portion of the country and the world's population. I feel that much existing accreditation is actually a barrier to entry propping up the costs of education, entrenching more student debt for young people. This move seems specifically aimed at internet-based colleges.

It effectively increases the regulatory burden on internet schools by 50-fold relative to brick and mortar colleges. If it were actually an attempt to regulate interstate education, states wouldn't accept degrees from schools in other states, or the DoE would be working to create more uniform accreditation standards. They're not. This is a clear attempt to impose additional regulatory burden favoring some competitors over others.

You seem to have ignored the obvious alternative explanation: there ARE no conceivable justifications for such a regulation. It does not prove that regulation is bad, but it is evidence that sometimes it is. Very obvious evidence.

Why should the burden of proof be on Tyler? Surely the Department of Education hasn't made a case for why their regulation's benefits outweigh its costs. I do not see why it should have the power to interfere.

I assume this approval is above and beyond corporate registration with the secretary of state? Or are colleges exempted from that requirement?

It's aimed at internet schooling. I don't think you're required to register with the secretary of state in order to allow people in that state to visit your website. But I'm not sure if that's your question?

I think the main carrot/stick here is whether the school can be given pell grants/student loans for over-the-internet students. I think they can do whatever they want if they're not accepting federal grant/loan money. But that's where all the education cash is. :)

The reasoning for the rule could be DOE subsidizes tuition for certain citizens and Internet "education" offerds the opportunity for scams.

That is not a justification for a regulation requiring state-by-state approval. Trying to force distance learning programs to obtain regulatory approval in every state is a thinly-disguised attempt to try to tie up new educational business models with regulatory burdens and raise costs in order to prevent them from undercutting high-cost, legacy brick-and-mortar institutions. I expect this to be a long, high-stakes battle -- the legacy educational system will make every attempt to use government regulatory power to try to protect their existing high-cost business models from new, innovative, lower-cost competition.

Totally agree. It costs $80 billion a year and doesn't educate anyone.

If you need to be convinced that this is over-regulation try reading the 150 page DOE rule as published in the Federal Register. I have and it is worse than you can imagine. Presumably, this is in reaction to incidents in California with for-profit schools that have been permitting students to collect federal loans without attending class. How you get from there to the federal government needing to enforce state laws that require registration I am not sure.

What is involved varies from state to state. In some cases, it is just a letter informing them that you have students in their state. In others, you must pay thousands of dollars for every program you are offering. The rule applies even if the students resides in State X, attends school in State Y and returns home for summer break! Every university in the country is scrambling to collect the required approvals, keep track of each state's requirements, and in some cases, turning students away because the number of students in that state do not justify the expense involved. The penalty for not obtaining the approval is potentially the loss (and payback) of all federal student loans received.

This was enacted after thousands of sensible comments offered by the higher education community. DOE disagreed with every comment that claimed this was unduly burdensome.

I think the fundamental problem here is a curious (or malicious) misconception of the "virtual space" in which Internet "activity" occurs. This problem crops up everywhere: not just in distance education, but also in retail sales (Amazon), poker sites (recently attacked by the U.S. government), and 510(c) charitable organizations (which must "register" in most of the 50 U.S. states, and pay fees, for permission to legally place a "Donate" link on a web site).

"Abolish the DOE, I say."

Why? Why not, let the DOE regulate distance education programs rather than the states?

Tyler, you're (implying?) claiming over-regulation of an industry (education) is going to theoretically lead to less opportunity for the consumer.

The DOE is claiming it needs to maintain educational standards (part of its mission) so that the consumer essentially doesn't get bilked.

Both POVs have validity; the second seems to prioritize the value/quality of the product (education) vs. the first one's concern for access to it (which would inherently decrease its value; supply broadens = demand decreases--in this case both for the product and resultingly for its end-value (educated degreed people) in the human marketplace).

But I'm not going to delve into the implicit antagonism of education-as-industry within a capitalist society that underlies all of this, I only want to note that your "solution" of abolishing the DOE is irresponsible. The DOE does much more good than bad, and I think you know that. I'll let you have an emotional-response hall-pass on that, though, and offer you the chance to present a REAL solution now that you've had time to think about it more. Otherwise you've got detention and will have to fill the chalkboard with "I do not want to abolish the DOE".

See, here's the thing. If the goal is to maintain educational standards, then you would require the school to get approval from any *one* state. If you thought that wasn't going to be good enough, then you could pick one particular state that you thought had good standards, or the DOE could come up with its own approval process. (But if you think that there are states whose approval process isn't up to snuff, isn't that a significant issue in and of itself?)

Requiring approval from *every* state involved, on the other hand, is pretty obviously just a ploy to make the approval process for an Internet-based college drastically more onerous than the some process for a physical school.

Sol, you make a reasonable point, and I think we can agree that the idea of internet-colleges has the potential to inspire bias among old-guard education people.

But if I start out on taking some internet-based classes, and I live in Oklahoma, and I take a class being taught by a professor recently retired from Columbia, using curriculum developed by the college based in Utah, how can I reasonably hope to transfer those credits to a university in Texas that I want to attend? I can easily hope to do that if -all- states have signed off on the internet-college's standards. There's no other way it can work. And the DOE is ideally suited (perhaps uniquely suited) to facilitate that.

What you're seeing as an (admittedly) onerous process for the business is truly a necessary process for the customer to have anything of use/quality as a product. I think we've all become taken by this belief that the internet should automagically make anything we try to do easier, and that's just not always going to be the case. The internet-colleges want plug-and-play education-as-e-commerce, and it can't work that way. I know it's easy to imagine the DOE having a naturally adverse reaction to accrediting internet-colleges, I get that, but what they're doing here actually is completely in line with what their existing policies are--there's no bias at play with them.

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I had lunch today with three bright college students, all former homeschool debaters. Two have taken college courses online via Thomas Edison College and through an intermediary that provides weekly phone calls from a "coach." The third student is at a private college, and trying to earn enough money to continue there. Interesting too the various side-jobs: interning at a top research laboratory, college/semi-pro soccer referee work, and private school coach.

Some 300 students were competing at the Modesto homeschool debate tournament this week. I wonder what percentage will choose some version of "homeschool college"? 20%? 30%? 50%?

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