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The biggest problems with America's colleges

In recent years parents, thinks tanks and politicians have complained mightily about the runaway cost of college. But this focus on schools' affordability has obscured equally troubling problems with higher education.

Among the signs of distress, millions of Americans aren't finishing their college degrees, and those who do are routinely taking more than four years to graduate. Research also suggests that many new grads lack the critical thinking, problem-solving and writing skills employers expect. Thanks to lobbying by educational institutions, meanwhile, the federal government is barred from making federal data publicly available about the salaries and employment track records of grads at individual colleges.

A new report from Third Way concludes that families are picking colleges largely in the dark, and often not getting what they bargained for. The centrist think tank also attacks the federal government's role in higher ed, claiming that it doesn't hold colleges accountable in ensuring that students are learning, among other issues.

The Princeton Review releases "Colleges That Pay You Back" 03:46

Yet the government's intervention is key to reform because it is by far the biggest funder of higher ed. For the 2013-14 school year, the government sank $126 billion into undergraduate student aid. But despite showering colleges and universities with money, it rarely punishes institutions that are failing their students.

"For that level of involvement," the group noted, "[the federal government] does shockingly little to evaluate and improve the quality of undergraduate education. Instead, existing spending has encouraged schools to drive up costs, while completion rates remain low and evidence of substantial student progress remains slim."

Here are some of the problems that the Third Way report sees with U.S. college and universities today:

Poor graduation rates. Just 39 percent of full-time college students earn a bachelor's degree in four years, and only 59 percent finish in six years.

Faulty incentives. Federal dollars are a factor in the surging cost of education. Federal financial aid increases what students are able to pay, and colleges will spend as much as they can get.

Lopsided priorities. The government's largess is focused almost entirely on supporting academic research rather than promoting quality teaching. The government sinks $33 billion a year into academic research, but devotes a mere $79 million to encourage quality teaching. Put another way, for every $100 the federal government spends on research grants, it provides just 24 cents to improve education.

Willful blindness. Federal law prohibits the government from disclosing information about the employment and salaries of graduates of individual schools. For instance, that makes it all but impossible to learn what typical business majors or psychology majors earned after graduating from a particular school.

Along with outlining problems that plague the nation's colleges and universities, Third Way also proposes remedies focused on improving the quality and lowering the cost of education. One low-hanging fix: repeal the ban on providing salary and government information for particular schools.

Six figures still isn't enough to pay for college 02:00

More broadly, the government should use its funding leverage to renew an emphasis on good teaching. By 2020, every college that participates in the federal aid system -- and that's nearly all of them -- should be required to have a transparent system in place to measure student learning, according to the group. Schools should also have a plan to train professors to teach effectively.

Third Way recommends that the federal government issue $200 million worth of grants to help schools design the best ways to evaluate student learning.

Finally, the government should restructure federal college loans. Currently, parents can borrow large money through federal PLUS loans. These loans should be curbed to reduce excessive borrowing. Financial penalties also should be imposed on colleges with high loan default rates and that have a high percentage of students who fail to make their monthly loan payments.

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