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Mitch Daniels: Feds should ‘modernize its rules’ to help make higher ed affordable

(Associated Press)

(Associated Press)

The biggest problem facing students today is the ever-rising cost of a college education. And that’s the hurdle Purdue University President Mitch Daniels thinks they can overcome if universities and the federal government come together to allow for innovative ideas.

“The sheer cost of higher education has risen unbelievably fast, three times the rate of inflation. It’s the only thing you can find that has gone up faster than healthcare — tuition and room and board,” Daniels said in an interview with Red Alert Politics.

“We’re at at least a tipping point, if not a breaking point.”

This prompted Daniels’ recent visit to Washington D.C.

The former Indiana Governor testified before a House panel working on a higher-education bill and he brought up his idea for the “Bet on a Boiler” program at Purdue.

This program would give students the opportunity to find an investor, typically an alumni, to put them through school in exchange for a share of their future income. But right now federal law isn’t clear and this type of program would find itself in a grey area legally, he said.

“I raised it not simply on its own merits, but to illustrate the fact that right now various federal laws and regulations make it hard to innovate in higher ed. This is one example. People are hesitant to start these programs because the tax law is ambiguous. That’s the larger point I was making,” Daniels said.

“At a time when we need to innovate and try new things to keep the cost of education affordable and to speed time to completion, the federal government could help if it would modernize its rules.”

While higher education and the skyrocketing cost has been discussed in Washington, not all of the proposals work toward this goal, he said.

Sen. Elizabeth Warren’s proposal, one of the most frequently discussed, would forgive a lot of student loans and refinance others. But Daniels argues that this is not the answer.

“So much of the benefit of that would go to wealthy families and wealthy students and people who are already out of school. That’s not the problem I think we should be focused on,” he said.

“The problem we should be focused on are those students we’re trying to encourage to go on past high school now into some form of post-secondary school and keeping it affordable for them.”

Daniels said that Warren’s proposal is yet another example of a way that Washington tries to over-regulate in a way that ends up harming students. He said that the federal government needs to “drastically deregulate” higher education.

“There are way too many people in higher ed that aren’t teaching anybody, they aren’t researching anything. They are pushing paper, filling out forms, answering voluminous questions for the federal government,” he said.

The rules in place don’t allow universities to come up with innovative solution on their own, he added.

For instance, Daniels is working toward implementing a competency-based program at Purdue that would have students working at their own pace and potentially graduating faster. But current federal laws only allow student aid to be doled out on the traditional semester schedule, limiting the times of year when some students could participate.

These rules are “tied to the old way of doing thing,” he said, and must be updated before higher education will see the changes it needs.


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