Late last week, the Secretary of Education’s Commission on the Future of Higher Education released the third – and probably last – public draft of its report on reforming the American ivory tower. It will likely submit its final report to the secretary in September.

Just like the previous two drafts, number three includes a lot of bad ideas, including one sweeping proposal that all by itself justifies the report’s rejection:

The Secretary of Education, in partnership with states and other federal agencies, should develop a national strategy that would result in better and more flexible learning opportunities, especially for adult learners.

Imagine the kind of mischief policymakers could justify on the grounds that they are creating “better…learning opportunities”? No commission should ever give Washington such a broad license to legislate.

That said, there are a couple of things in draft three that differ markedly from drafts of old, including one that says something I never, ever thought I’d see in a federal report:

A private sector education lending market has fully developed (separate and distinct from loans subsidized by the federal government and made by private financial institutions), which provides a variety of competitive lending products offering many options for funding education expenses. The Commission notes that wider recognition and wider utilization of these options by many families would result in the private sector providing more funding for higher education and in freeing scarce public funds to focus on aid for economically disadvantaged students and families.

A report by a federal commission on higher education that promotes the use of private lending options? Is it April 1^st?

And that’s not all. Draft three also notes much more emphatically than the previous two the deleterious, inflationary effects of having tons of third-party funding – primarily, money forced out of the wallets of Joe and Jane Taxpayer – pumped into colleges:

A significant obstacle to better cost controls is the fact that a large share of the cost of higher education is subsidized by public funds (local, state and federal) and by private contributions. These third-party payments tend to insulate what economists would call producers – colleges and universities – from the consequences of their own spending decisions, while consumers – students – also lack incentives to make decisions based on their own limited resources. Just as the U.S. healthcare finance system fuels rising costs by shielding consumers from the consequences of their own spending choices, the high level of subsidies to higher education also provides perverse spending incentives at times.

Now, let me make this clear: If the commission’s final report is essentially unchanged from draft three, it will be a bad thing, encouraging federal and state governments to impose numerous new rules and regulations on America’s ivory tower, which despite all its faults is still the best in the world. At least, though, draft three doesn’t ignore either the root causes of, or free-market solutions for, higher education’s problems.

That alone is a reason for optimism.