It calls for tying Federal funds and tax privileges to three measures: the percentage of low-income students a school enrolls; the share of each entering class that receives a bachelor’s degree within six years; and the rate at which students repay their student loans.

For example, under this proposal, a school which has fewer than 17 percent of its freshmen receiving need-based Federal scholarships, such as Pell grants, risks losing eligibility not only for Federal aid, but also to issue tax-exempt bonds and receive tax-deductible donations. Failing to meet the criteria for the other measures would result in similar sanctions.

The report notes that schools may need time to comply and some may have good reasons for being unable to do so. It also proposes efforts to help them improve. But the report suggests that every few years, the bar should be raised so that colleges and universities face increasingly higher requirements.

Neither IU nor most Indiana schools are in danger of falling below the initial criteria. But holding higher education to these standards risks reducing its diversity, historically a source of its strength. Moreover, the standards neglect other important functions of colleges and universities, such as research and public service. The standards also do not actually say anything about what students learn, only how the schools they attend perform.

Nonetheless, they could become a reality.

Sources:

President Obama pledge

Education Trust report