[Senate Hearing 116-425]
[From the U.S. Government Publishing Office]
S. Hrg. 116-425
REAUTHORIZING THE HIGHER
EDUCATION ACT: STRENGTHENING
ACCOUNTABILITY TO PROTECT
STUDENTS AND TAXPAYERS
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING REAUTHORIZING THE HIGHER EDUCATION ACT, FOCUSING ON
STRENGTHENING ACCOUNTABILITY TO PROTECT STUDENTS AND TAXPAYERS
__________
APRIL 10, 2019
__________
Printed for the use of the Committee on Health, Education, Labor, and Pensions
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
41-395 PDF WASHINGTON : 2021
COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
LAMAR ALEXANDER, Tennessee, Chairman
MICHAEL B. ENZI, Wyoming PATTY MURRAY, Washington
RICHARD BURR, North Carolina BERNARD SANDERS (I), Vermont
JOHNNY ISAKSON, Georgia ROBERT P. CASEY, JR., Pennsylvania
RAND PAUL, Kentucky TAMMY BALDWIN, Wisconsin
SUSAN M. COLLINS, Maine CHRISTOPHER S. MURPHY, Connecticut
BILL CASSIDY, M.D., Louisiana ELIZABETH WARREN, Massachusetts
PAT ROBERTS, Kansas TIM KAINE, Virginia
LISA MURKOWSKI, Alaska MARGARET WOOD HASSAN, New
TIM SCOTT, South Carolina Hampshire
MITT ROMNEY, Utah TINA SMITH, Minnesota
MIKE BRAUN, Indiana DOUG JONES, Alabama
JACKY ROSEN, Nevada
David P. Cleary, Republican Staff Director
Lindsey Ward Seidman, Republican Deputy Staff Director
Evan Schatz, Minority Staff Director
John Righter, Minority Deputy Staff Director
C O N T E N T S
----------
STATEMENTS
WEDNESDAY, APRIL 10, 2019
Page
Committee Members
Alexander, Hon. Lamar, Chairman, Committee on Health, Education,
Labor, and Pensions, Opening statement......................... 1
Murray, Hon. Patty, Ranking Member, a U.S. Senator from the State
of Washington, Opening statement............................... 3
Witnesses
Wheelan, Belle, Ph.D., President, Southern Association of
Colleges and Schools Commission on Colleges, Decatur, GA....... 7
Prepared statement........................................... 8
Tandberg, David, Ph.D., Vice President for Policy Research and
Strategic Initiatives, State Higher Education Executive
Officers Association (SHEEO), Boulder, CO...................... 11
Prepared statement........................................... 12
Summary statement............................................ 27
Looney, Adam, Ph.D., Joseph A. Pechman Director of the Center on
Regulation and Markets, Brookings Institute, Washington, DC.... 28
Prepared statement........................................... 30
McMillan, Cottom, Tressie, Ph.D., Assistant Professor of
Sociology, Virginia Commonwealth University (VCU), Richmond, VA 37
Prepared statement........................................... 38
ADDITIONAL MATERIAL
PostsecData Collaborative and National Skills Coalition
Support the Reintroduction of the College Transparency Act.
............................................................. 62
REAUTHORIZING THE HIGHER
EDUCATION ACT: STRENGTHENING
ACCOUNTABILITY TO PROTECT
STUDENTS AND TAXPAYERS
----------
Wednesday, April 10, 2019
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m., in
room SD-430, Dirksen Senate Office Building, Hon. Lamar
Alexander, Chairman of the Committee, presiding.
Present: Senators Alexander [presiding], Cassidy, Romney,
Braun, Murray, Casey, Baldwin, Murphy, Warren, Kaine, Hassan,
Smith, Jones, and Rosen.
OPENING STATEMENT OF SENATOR ALEXANDER
The Chairman. The Committee on Health, Education, Labor,
and Pensions will please come to order. Senator Murray and I
will each have an opening statement, then we will introduce the
witnesses. After their testimony, we will have five-minute
rounds of questions.
When I was President of the University of Tennessee, one of
the first things I did was ask David Gardner, who was then
President of the University of California, why his university
was considered to be one of the best in the world. And this is
what he told me, he said, first autonomy. We basically have
four branches of Government in California, he said, and one of
them is the University of California. Second, he said
competition and choice. Large amounts of state and Federal
money following students to the campus of their choice, meaning
Pell Grants, student loans, Cal Grants. And third, a commitment
to excellence by institutional leaders and faculty on the
campuses of the University of California.
As a former University President, I am very much aware that
despite that autonomy that Dr. Gardner talked about, our
country's 6,000 colleges and universities report to a lot of
bosses. They are accountable to a great many individuals,
boards, Governments, and other entities. First, they are
accountable to the students who may vote with their feet. They
may take their Federal and state grants and loans to any
accredited institution that will admit them. Second, the 44
federally recognized accrediting agencies whose certification
of quality is necessary before institutions are allowed to
accept students who bring $30 billion in new Pell Grants and
$100 billion in Federal student loans each year to ensure that
the billions of dollars are spent wisely. The Federal
Government measures how many students default on their loans.
For the 80 percent of students who attend public colleges
and universities, states have Governors, state legislators,
laws and state higher education authorities who oversee
campuses. Every institution, public or private, also has its
own Board of Trustees or Directors, and in addition, there are
specific Federal rules for the for-profit institutions which
about 5 percent of students attend in order to stop fraud
against students and taxpayers. And when making a list of
bosses, no former University President should leave out the
faculty. Most faculty members I have known take great pride in
maintaining institutional excellence.
Any president of any American higher education institution
has a lot of bosses and a lot of people to whom he or she is
accountable. And that has been a mostly successful approach.
Most surveys show that the United States has most of the best
colleges and universities in the world, and the dream of many
of the best students from all around the world is to attend
American colleges and universities. But still, I often hear
from students asking, is college worth our time and money. I
believe there are steps that we can take to make our higher
education systems more accountable, provide those students and
the taxpayers backing their loans with a clear, yes, college is
worth it. In March, at our first bipartisan higher education
hearing, we looked at how to simplify how 20 million families
apply for Federal Student Aid. I should say that is our first
hearing in this Congress. We have been having these hearings
for five years now. Last week we held a bipartisan hearing
about how to create a safe environment for students attending
college.
Today's hearing will be looking for ways to ensure that
students are earning degrees worth their time and money, and
that taxpayers are paid back the hundreds of billions that they
have loaned students to earn degrees to hold colleges
accountable for the $130 billion a year in grants and loans. In
1990, Congress created the Cohort Default Rate, which applies
to all colleges and universities. This measure makes a college
ineligible to receive Federal Student Aid if for three
consecutive years more than 30 percent of its borrowers are in
default or over 40 percent in any one year. However, this
Cohort Default Rate has proven to be a poor instrument of
accountability since it does not take into account the one-
third of borrowers who are not yet in default, but who are not
making their payments on time. Over the last decade, only 20
schools have become ineligible for Federal Student Aid under
the Cohort Default Rate according to the Congressional Research
Service. Then there are two Federal accountability rules that
apply only to for-profit institutions.
One, the 90-10 rule, which requires that at least 10
percent of a for-profit's revenue come from non-Federal
sources. And two, the gainful employment rule, which looks at
how much debt a graduate has compared to his or her salary.
This comparison of debt to salary has proved to be a confusing
and ineffective measure of accountability because it is too
complex and does not account for students who take out loans
but do not complete their degrees. So, we need more effective
measures of accountability, but I do not want the Federal
Government acting as a sort of National school board for
colleges, telling states and accreditors and Boards of
Directors and institutions how to manage the 6,000 colleges and
universities. Four years ago, this Committee passed Every
Student Succeeds Act, which reverse the trend toward a National
school board for elementary and secondary education.
For the same reason, Washington DC should resist the urge
to send thousands of Federal bureaucrats to evaluate our
colleges and universities, which would in effect create
National school board for colleges. Instead we should look at
new measures of accountability that look at whether students
are actually repaying their loans. This would be a more
effective and simpler way to ensure the taxpayers are not
financing degrees at a price so high and worth so little that
students are never able to pay back their loans. This proposal
is much like the gainful employment rule, but it would apply to
every program at every college, public, private, for-profit,
non-profit, and would include students who took out loans but
dropped out before graduating. For some programs, this new
measure should provide colleges with an incentive to lower
tuition and help their students stay in school to finish their
degrees and find a job so they can repay their loans.
A second step to improve accountability would be for the
Federal Government to make the data it collects from colleges
more useful to students and families. The Department has
struggled for years under all administrations to make such
information easily accessible to students and families. As we
work on updating the Higher Education Act, we need first to
identify what information schools actually need to report, and
second to provide direction to the Department on how to make
that information accessible and useful to students. And third,
we should strength the 44 federally recognized accrediting
agencies upon which we rely for certifying that students are
receiving a quality education. For example, instead of
requiring that accreditors have a standard of ``student
achievement,'' Congress could more clearly require that
accreditors measure whether students are both learning and
succeeding but leave the specific ways of measuring those to
accreditors and institutions.
Our goal needs to be to help students know that their
degrees are going to be worth their time and their money, and
to help taxpayers know that the Federal Government is not
financing programs that do not provide students with a valuable
education.
Senator Murray.
OPENING STATEMENT OF SENATOR MURRAY
Senator Murray. Well, thank you very much, Chairman
Alexander. Thank you to all of our witnesses that are here
today. I look forward to your thoughts and expertise as we try
to negotiate a comprehensive reauthorization of The Higher
Education Act.
During our discussion today, I urge you to keep in mind the
other students-centered priorities we are focused on as we work
toward updating our Nation's landmark higher education
legislation, addressing the rising costs of college and
exploding student debt, increasing access for historically
underrepresented students, ensuring students are able to learn
in an environment free from discrimination, harassment, and
assault. And I am pleased we were able to have a productive
conversation on campus sexual assault last week.
Today's topic at hand, holding all colleges accountable for
student success. This is so important not just because
taxpayers spend close to $130 billion in loans and grants every
year but because of the immense time and financial investment
families and students are making in their education. So, it is
critical that all schools are holding up their end of the
bargain, enrolling diverse students and supporting all students
to help them complete their education and be prepared for
success after college.
Currently, less than 60 percent of students graduate with a
certificate or degree within six years of when they initially
enroll in college. And these numbers are so much lower for
students of color, low-income students, and working adults.
Less than 50 percent of Latino students and just over 40
percent of blacks students, low income students, and students
starting school over the age of 20, will graduate. Students
cannot begin to advance their careers or pay back their loans
if they do not have a credential that opens the doors for them
to do so.
An accountability system has to sharpen its focus on
student outcomes and doing so must recognize there are many
different types of schools. We have two year, four year,
public, private, nonprofit, for-profit, online, competency-
based education, and more, educating the most diverse group of
students that include first generation college students,
students of color, students with disabilities, low-income
students, homeless and foster youth, working students, student
parents, and more. We have to ensure that our reauthorization
of the Higher Education Act includes an accountability system
that is as nuanced as our schools and our students.
Additionally, the role of higher education accountability,
quality insurance, and ongoing monitoring and oversight does
not fall squarely on the shoulders of the Federal Government.
It is a partnership between the Federal Government, states, and
accrediting agencies. Each of them has an important role to
play. Each have to do their part, and there has to be
coordination between the three to ensure students are getting
the very best education. So, I want to dig into my vision for
accountability in this reauthorization. It is important that we
maintain and strengthen the current existing law. The Higher
Education Act has always used a risk-based accountability
system to protect students and taxpayers from schools and
programs that have traditionally shown more risk, such as those
with profit motives or programs with alternative education of
formats.
This is especially important now in this current moment as
numerous for-profit college chains have collapsed, including
three in recent months leaving students with worthless or non-
existent credits and degrees. But fraud and abuse are not the
only reason for poor student outcomes in higher education. For
example, many schools have been systematically underfunded or
under resourced, including due to our country's history of
discrimination. And many are unable to or have yet to succeed
because there has not been an adequate focus on gaps in student
outcomes and initiatives to improve overall student
performance.
As we work toward this reauthorization, we should not only
protect students from predatory or ineffective actors, we have
also to look at broader educational outcomes to ensure all
schools are preparing all students for success. Schools must be
enrolling all types of students, including from historically
underrepresented backgrounds, and schools need to support
students while they are in school, so they are able to complete
their degree. And of course, students should be able to get a
job with their degree or certificate where they both earn
enough to manage their student debt and thrive in our diverse
and changing society and economy. We need an accountability
system that lifts up expectations for all schools and supports
less resourced schools.
Some schools want to invest in their students but do not
have the resources to do so. Others may not be using what
resources they do have in the most effective way. So, we need
to ensure schools are using data to better target their
resources, and we need to provide schools with the tools they
need to help students succeed, including financial aid, the
ability to identify when students are falling off track early,
career counseling, mental health services, and more.
Finally, we have to create a culture of accountability at
all colleges and universities. The entire school, including
those at the very top of the administration, have to take
responsibility for the overall college's value to students and
taxpayers. Before I close, I would also like to just reiterate
my concerns the Secretary DeVos and the Department's ongoing
deregulatory agenda and enforcement of current policies. Many
of the rules she is now working to unravel go directly against
the HEA's history of a risk-based accountability framework, and
we have to remember that laws are only as effective as their
enforcement. We have seen this administration turn the other
way when accrediting agencies fail to meet their
responsibilities and by shrinking the Department's enforcement
unit staff.
With all of that in mind, I look forward to hearing from
each of our witnesses today on how we can improve higher
education accountability and quality in this reauthorization.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Murray. And thank you for
your cooperation, and your staff and on our staff working
together to make this a bipartisan hearing as we have over the
years. We hope very much that we could take your advice from
the witnesses and reauthorize, update our higher education law.
Our first witness is Dr. Belle Wheelan, President of the
Southern Association of Colleges and Schools Commission on
Colleges, or SACS. SACS is one of seven regional accrediting
agencies in our country. It has responsibility for ensuring
educational quality for 794 institutions in 11 Southern states.
She is the first African American and the first woman to serve
as President of SACS. She has over 40 years of experience in
higher education. She was president of Northern Virginia
Community College. She was Virginia's Secretary of Education
appointed by then Governor Mark Warner. Nearly as good a
Governor as Governor Kaine was when he was there.
[Laughter.]
Senator Kaine. What can I say. It is true.
[Laughter.]
The Chairman. She went to LSU and she got her Ph.D., at the
University of Texas at Austin. Our second witness is Dr. David
Tandberg, Vice President for Policy Research and Strategic
Initiatives at the State Higher Education Executive Officers
Association, SHEEO. It is a National association of chief
executives of state governing policy and coordinating boards of
post-secondary institutions. Previously he was an Associate
Professor of higher education at the Center for Post-secondary
Success at Florida State, and a Special Assistant to the
Secretary of Education in the Pennsylvania Department of
Education. He earned his bachelor's and master's from Adams
State and Ph.D., from Penn State.
Dr. Adam Looney is our third witness. He is a senior fellow
in economic studies at Brookings. His research focuses on
economic policy analysis, specializing in among other topics,
the economics of student loans. He was previously Deputy
Assistant Secretary for tax analysis at the U.S. Department of
Treasury. Revised the secretary on tax policy, worked to
develop the Department of Education's College Scorecard. He was
a senior economist with President Obama's Council of economic
advisors and was an economist for the Federal Reserve Board. He
received his bachelor's from Dartmouth, his Ph.D., from
Harvard. Senator Kaine, do you have a witness to introduce?
Senator Kaine. Yes, thank you, Mr. Chairman and Ranking
Member Murray. I am really thrilled first to welcome Dr.
Wheelan who was a great Virginia Community College President,
did a superb job for now Senator Warner, as his Secretary of
Education. We are glad to have you. And I am pleased to
introduce a wonderful Richmonder who I really admire, Dr.
Tressie McMillan Cottom. Dr. Cottom is Professor at Virginia
Commonwealth University in Richmond and a Professor of
sociology, but before she got her Ph.D., in sociology from
Emory, she worked as an admissions counselor in for-profit
schools, and so is very, very well-versed in this.
Her experience both as an academic and at work as an
admissions counselor led her to write a book in 2016 that is
really, really influential called, Lower Ed: The Troubling Rise
of For-Profit Colleges in the New Economy. That book was one of
my Christmas gifts this year. My wife gave it to me to read
because she wanted me to read it since I am on this Committee.
Dr. McMillan Cottom is also very well regarded as an author
more broadly on cultural topics. I was recently at a book
launch party for her most recent work, Thick, which is an
amazing set of essays about beauty, race, gender, money,
fashion. She was on Trevor Noah talking about that back in
January, so she is a very rigorous academic in this area but
also quite an influencer, as they say, and we are really,
really proud of her in Richmond. And I am excited to welcome
her to the Committee.
The Chairman. Thank you, Senator Kaine. I think you
embarrassed her, so----
[Laughter.]
The Chairman. But we welcome you and we welcome all of you.
Dr. Wheelan, let us begin with you.
STATEMENT OF BELLE WHEELAN, PH.D., PRESIDENT, SOUTHERN
ASSOCIATION OF COLLEGES AND SCHOOLS COMMISSION ON COLLEGES,
DECATUR, GA
Dr. Wheelan. Thank you, Chairman Alexander to you, Ranking
Member Murray, and Members of the Committee thank you for the
opportunity to present testimony today on the important issue
of accountability in higher education.
As you have heard, my name is Belle Wheelan, and for nearly
15 years I have served as President of what we know as SACSCOC.
SACSCOC accredited institutions enroll nearly 4.5 million
students, 41 percent of whom receive Pell Grants, and 39
percent of whom receive Federal loans. Taken all together,
these institutions have a Title IV Federal Student Aid volume
of over $30 billion annually. I am here today to provide an
overview on how our agency functions as a gatekeeper to these
Federal funds, and how our accredited institutions are held
accountable for academic quality, which in turn protects the
investment of students, parents, and taxpayers.
SACSCOC's role of what is commonly referred to as the triad
is to oversee and ensure the quality of education at each of
the institutions we accredit. Once eligible for consideration
to be accredited, an institution must apply for candidacy, a
process that involves demonstrating through a compliance
certification to the commission that they meet each of our
rigorous standards in areas such as student achievement and
physical capacity. Our Board of Trustees comprised of 77
members elected by the membership, relies on the work of over
5,000 volunteer peer-reviewers to help inform decisions around
final accreditation approvals. If an institution becomes
accredited, it will be subject to ongoing review and robust
oversight by the commission, including undergoing a
comprehensive evaluation every 10 years, submitting a formal
report at the fifth year, and providing annual reports that
include financial information and completion data.
In addition, if an institution does not demonstrate
compliance with our standards at any time during the decennial
process, we are obligated to assess the reasons for non-
compliance and may leverage a sanction on the institution. Some
have proposed that as part of the next reauthorization of the
Higher Ed Act, the Federal Government either directly or
through accreditors, should impose bright lines for
institutions that would result in the loss of accreditation and
the ability to participate in Federal Student Aid programs if
the institutions do not meet certain incomes. I understand why
some would be interested in such an idea. It seems simple,
takes away most subjectivity and would presumably remove bad
actors thereby protecting students. Unfortunately, it is simply
not that simple.
I will use graduation rates as an example since it is most
often the suggested metric for which a bright-line could be
applied. Last year, the Council of Regional Accrediting
Commission, of which SACSCOC is a member, issued a one-year
review of the graduation rate project that had been initiated
the prior year. One of our goals of this project was to take a
deeper look at Federal graduation rates. At times accreditors
were asked, why do you accredit some institutions that have
extremely low graduation rates. It was and continues to be a
fair question. One we felt needed to be answered.
As part of the project, we examined both two-year and four-
year institutions with Federal IPEDS graduation rates below 25
percent or half the National average. We found that at 75
percent of these low-grad institutions, the majority of
students were not reflected in the Federal data because they
did not enter the institutions as first-time, full-time
students. An inaccurate representation of an institution
student body will clearly have a significant impact on the
institution's graduation rate and outcomes. In our region, we
looked at the impact of using data from the National Student
Clearinghouse, which tracks far more students and uses a longer
period of time for when students graduate. Not surprisingly,
the graduation rates of community colleges, for example,
doubled from 21 percent to 40 percent as a result of using that
data.
The point here is not just the Federal graduation rates are
often incomplete, and I know that Congress is working to tackle
that, but also the fact that bright line graduation rates would
invariably fail to capture the many different ways in which
graduation rates can be approached, nor would bright lines in
and of themselves account for the significant differences
between our institutions ranging from highly selective
universities to community colleges that have open door
admission policy and enroll students of widely varied academic
abilities.
Now I want to be very clear, although I oppose the concept
of Federal bright lines for accountability, I strongly believe
that we as accreditors can and must hold institutions
accountable for student outcomes such as graduation rates.
Student performances are compared to baseline levels in our
region and peer-evaluation committees are expected to use this
information as contextual reference points to inform their
reviews of institutional cases for compliance.
We also in our region require an institution to develop a
quality enhancement plan that focuses on how the institution
intends to improve specific learning outcomes and or student
success. They have to commit resources to initiate, implement,
and complete the plan. I hope that my testimony here today has
helped provide a better understanding of how accreditors such
as SACSCOC strive each and every day to help not only approve
institutions but also to protect students, taxpayers, and
parents.
Thank you for the opportunity to testify.
[The prepared statement of Dr. Wheelan follows:]
prepared statement of belle wheelan
Chairman Alexander, Ranking Member Murray, and Members of the
Committee, thank you for the opportunity to present testimony today on
the important issue of accountability in higher education.
My name is Belle Wheelan, and for nearly 15 years, I have served as
President of the Southern Association of Colleges and Schools
Commission on Colleges (SACSCOC), one of seven recognized regional
accrediting agencies in the Nation. SACSCOC represents the common
denominator of shared values and practices among more than 794
institutions across 11 southern states, consisting of 480 public, 305
private, and nine for-profit institutions. Our institutions are diverse
and encompass research universities, state colleges, liberal arts
colleges, community and technical colleges, Historically Black
Colleges, Hispanic Serving Institutions as well as faith-based
institutions.
SACSCOC-accredited institutions enroll nearly 4.5 million students,
41 percent of whom receive Pell Grants and 39 percent of whom receive
Federal loans. Taken altogether, these institutions have a Title IV
Federal student aid volume of over $30 billion annually.
I'm here today to provide an overview on how our agency functions
as a gatekeeper to these Federal funds and how our accredited
institutions are held accountable for academic quality, which in turn
protects the investments of students, parents and taxpayers.
The process of accountability includes the requirement that
eligible institutions be authorized by the states in which they operate
and approved by the U.S. Department of Education. While states focus
largely on consumer protections for students, the Department is
responsible for ensuring compliance with Federal rules and regulations
tied to student aid.
SACSCOC's role of what is commonly referred to as the ``triad'' is
to oversee and ensure the quality of education at each of the
institutions we accredit.
Once eligible for consideration to be accredited, an institution
must apply for candidacy, a process that involves demonstrating through
a compliance certification to the Commission that they meet each of our
rigorous standards in areas such as student achievement and fiscal
capacity. Our Board of Trustees, comprised of 77 members elected by the
membership, relies on the work of over 5,000 volunteer peer reviewers
to help inform decisions around final accreditation approvals.
If an institution becomes accredited, it will be subject to ongoing
review and robust oversight by our Commission, including undergoing a
comprehensive evaluation every 10 years, submitting a formal report at
the fifth year, and providing annual reports that include financial
information and completion data. In addition, if an institution does
not demonstrate compliance with our standards at any time during the
decennial process, we are obligated to assess the reasons for non-
compliance and may leverage a sanction on the institution.
Some have proposed that, as part of the next reauthorization of the
Higher Education Act, the Federal Government, either directly or
through accreditors, should impose ``bright lines'' for institutions
that would result in the loss of accreditation and the ability to
participate in Federal student aid programs if institutions do not meet
certain outcomes.
I understand why some would be interested in such an idea. It seems
simple, takes away most subjectivity, and would presumably remove ``bad
actors,'' thereby protecting students. Unfortunately, it's simply not
that simple.
I will use graduation rates as an example since it's most often the
suggested metric for which a bright line could be applied.
Last year, the Council of Regional Accrediting Commission, of which
SACSCOC is a member, issued a one-year review of the Graduation Rate
project that had been initiated the prior year.
One of our goals of this project was to take a deeper look at
Federal graduation rates. At times, accreditors are asked--``why do you
accredit some institutions that have extremely low graduation rates?''
It was and continues to be a fair question, and one we felt needed to
be answered.
As part of the project, we examined both 2-year and 4-year
institutions with a Federal IPEDS graduation rate below 25 percent, or
half the national average. We found that at 75 percent of these ``low-
grad'' institutions, a majority of students (and often a vast majority)
were not reflected in the Federal data because they did not enter the
institutions as first-time, full-time students. An inaccurate
representation of an institution's student body will clearly have a
significant impact on the institution's graduation rate and outcomes.
As cited in our report, ``The Western Association Senior Colleges
(WASC) analyzed 23 California State University institutions and found
that the Federal IPEDS Student Right to Know graduation rate
dramatically underreported graduation rates by 3 to 32 percentage
points, largely because the data did not include large groups of
students (including non-first-time, non-full-time students) enrolled.''
In our own region, we looked at the impact of using data from the
National Student Clearinghouse, which tracks far more students and uses
a longer period of time for when student graduate (particularly
relevant for part-time and non-traditional students). Not surprisingly,
the graduation rates of the community colleges we examined doubled from
21 percent to 40 percent.
The point here is not just that Federal graduation rates are often
incomplete (an issue I know Congress is working to tackle), but also
the fact that ``bright line'' graduation rates would invariably fail to
capture the many different ways in which graduation rates can be
approached. Nor would bright lines, in and of themselves, account for
the significant differences between our institutions--ranging from
highly selective universities to community colleges that have open door
admission policies and enroll students of widely varied academic
abilities.
However, I want to be very clear: although I oppose the concept of
Federal ``bright lines'' for accountability, I strongly believe we as
accreditors can and must hold institutions accountable for student
outcomes, such as graduation rates.
In fact, that is exactly the direction all regional accreditors,
including SACSCOC, are headed.
As part of the reviews I mentioned above, SACSCOC takes a close
look at institutional outcome metrics including enrollment, completion
rates, cohort default rates, retention/withdrawal rates, transfer-out
rates, loan repayment rates, and median earnings. These reviews are
sometimes done at the institutional level and at times drive down to
the program level, depending on information provided by the
institution.
At SACSCOC, we pay particular attention to graduation rates--
however, we recognize that there is more than one way to define
``graduation rate.'' But we didn't let that prevent us from holding
institutions accountable for this important outcome. Under our newly
adopted standards, we require every institution to identify a key
student completion indicator from the following completion metrics to
serve as their ``baseline performance level'':
(1) ``Traditional'' IPEDS overall graduation rate (within 150
percent time);
(2) ``New'' IPEDS Outcome Measure (8-year award rate); or
(3) National Student Clearinghouse ``total'' completion rate (6
years).
Subsequent performances are then compared to baseline levels. Peer
evaluation committees are expected to use this information as
contextual reference points to inform their reviews of institutional
cases for compliance.
We also ask each of our institutions to identify peer institutions
and evaluate their performance and outcomes data against similarly
situated institutions. We do this as a way to encourage institutions to
consider how they could learn and adopt strategies from high-performing
peers. This work has also included, for example, polling all of our
institutions for effective strategies to increase graduation rates. We
received over 5,000 comments that have enabled institutions to learn
about best practices to address this issue.
We also require every institution to develop a Quality Enhancement
Plan (QEP). These plans must focus on how the institution intends to
improve specific student learning outcomes and/or student success.
Institutions must also commit resources to initiate, implement, and
complete their plans.
The QEP is an example of intentional and focused use of
institutional evaluation data to identify and address a specific and
significant area for improving student achievement.
Our standards also hold institutions accountable for collecting and
using evaluation data to inform planning and improvement efforts. Many
institutions struggle with this necessary requirement. During the first
(off-site) stage of the peer review process, about a quarter of
institutions in the 2018 class were found to be in non-compliance with
this standard. However, by the time the entire process is completed,
all but 4 percent of the same institutions had demonstrated compliance.
Since we perceive the reaffirmation of accreditation process to be
a continuous improvement process, institutions are able to provide
additional information after each stage of the review process, often
yielding more positive results and, subsequently, greater compliance
with the standards.
Since completion data is submitted annually, staff is able to work
with institutions that are making little or no progress with related
compliance issues.
When the Commission has reason to believe that an institution is no
longer meeting one of our standards (which are consistent with those
standards required under HEA), it will ask the institution to
demonstrate how it plans to come into compliance through a monitoring
report. If after two monitoring reports an institution is not able to
demonstrate compliance, it is placed on either Warning or Probation, or
its accreditation is withdrawn altogether. The withdrawal of membership
or loss of accreditation can be appealed on procedural grounds. During
that process, if it is determined that the reason for the drop was
strictly financial, there is a provision for new evidence that, if
found to be material and significant, can lead the Commission to
reconsider its decision.
I hope that my testimony here today has helped provide a better
understanding of how accreditors such as SACSCOC strive each and every
day to help not only improve institutions but also to protect students,
parents and taxpayers.
As you consider changes to the Higher Education Act, I welcome the
opportunity to work with each of you on ways to ensure we are living up
to this responsibility.
Thank you for the opportunity to testify and I welcome any
questions you may have.
______
The Chairman. Thank you, Dr. Wheelan.
Dr. Tandberg, welcome.
STATEMENT OF DAVID TANDBERG, PH.D., VICE PRESIDENT FOR POLICY
RESEARCH AND STRATEGIC INITIATIVES, STATE HIGHER EDUCATION
EXECUTIVE OFFICERS ASSOCIATION (SHEEO), BOULDER, CO
Dr. Tandberg. Chairman Alexander, Ranking Member Murray,
and Members of the Committee, thank you for the opportunity to
testify today. It is indeed an honor.
I have been asked to address the issue of accountability in
higher education. Among its many obligations, Government has
one central role in society, the provision of the public good.
The public good or public goods are goods and services that
advance the broader public interest and welfare, and where the
benefits of the goods and services are open to all. Higher
education is difficult because in some ways it acts as a public
good, and in other ways it appears to fall short of that
definition. Higher education benefits society generally and
college graduates directly in a multitude of ways, and in those
regards, the U.S. higher education system is performing
exceptionally well. However, that is not the complete story.
While simultaneously serving as a critical access point for
upward mobility and a means of tremendous opportunity, our
higher education system also serves to regenerate existing
wealth, status, and privilege. I am convinced that without
appropriate Government support and oversight, higher education
will not on its own fully accomplish its mission of advancing
the public good. Significant inefficiencies appear built into
our higher education system. For example, currently over 40
percent of incoming students are failing to complete any
credential within six years of starting. Primary factors
driving the low average post-secondary completion rate are the
race and income-based inequalities built into our system, and
the stratification and unequal distribution of resources
apparent within and between our post-secondary institutions.
These income and race-based inequalities mean entire
segments of our society are being kept out of higher education
based on factors independent of desire and talent. Further,
when low-income students and students of color access higher
education they tend to be stratified into lower resourced and
open or broad access institutions. These institutions have
fewer resources despite serving the populations of students who
need the greatest support. Students of color and low-income
students are also over-represented and far more likely to
enroll in for-profit institutions than their white majority and
upper-income counterparts. This matters because outcomes for
students enrolled in for-profit institutions are often
significantly worse compared to students in other sectors. In
order to ensure that institutions meet certain standards
regarding quality and capacity before they are deemed eligible
under Title IV for students to receive Federal financial aid,
the original Higher Education Act established the
accountability triad.
The triad consists of three entities, accreditors, the
Federal Government, and States. Accreditors use peer-review as
the foundation of their effort to ensure that institutions meet
minimal level of educational quality. The Federal Government
has been primarily concerned with consumer protection and
consumer information. State authorization serves as the first
and foundational formal act in the establishment of a post-
secondary institution. Authorization, however, vary
significantly by state. States also engage in critical program
approval functions, consumer information and protection
functions, oversight and regulatory actions, and in performance
management, often in the form of performance or outcomes-based
funding. The triad has certainly helped higher education
function better, protected many students, and helped protect
taxpayer dollars.
However, in order for the Government to ensure that higher
education in the U.S. is fully operating in the public
interest, the triad must function better, and resources must
flow to where they are needed most. It is important to note
that the participation of each member of the triad allows
institutions to receive a level of endorsement that may be used
by the institution to signal, compliance, and quality.
Therefore, each entity in the triad must act as a quality
assurance mechanism. Experience and research has shown that
without clear and deliberate action taken on behalf of
underrepresented students, the system will not, on its own,
serve them appropriately. Better coordination and partnership,
more and better data, and information disaggregated by race and
ethnicity are needed to protect students of color and low-
income students.
It is an honor to be here today, and I look forward to your
questions.
[The prepared statement of Dr. Tandberg follows:]
prepared statement of david tandberg
Chairman Alexander, Ranking Member Murray, and Members of the
Committee, thank you for the opportunity to testify today.
My name is David Tandberg and I serve as vice president of policy
research and strategic initiatives at the State Higher Education
Executive Officers (SHEEO) Association. SHEEO is the national
association of the chief executives of statewide governing, policy, and
coordinating boards of postsecondary education. We seek to advance
public policies and educational practices to achieve more widespread
access to and completion of higher education, more discoveries through
research, and more applications of knowledge that improve the quality
of human lives and enhance the public good.
I have been asked to address the issue of accountability in higher
education. While a seemingly dry and perhaps technocratic topic, it, in
fact, gets at two of the most critical and fundamental questions facing
policymakers concerned with higher education. First, what is the
government's interest in higher education? And second, how might the
government advance its interest in higher education? These two
questions get at the core of what we want and expect from higher
education. And in that regard, they reveal that we have much work to do
before higher education in the United States can be determined to be
fully meeting its obligations to the public. These questions will frame
my comments today.
In what follows I will attempt to articulate the government's
interest in higher education, discuss various challenges preventing
higher education from fully accomplishing its mission and meeting the
government's interest, explain the government's current accountability
system, and then conclude by making several recommendations that may
help protect students and better orient higher education toward the
public good.
The Government's Interest in Higher Education
Among its many obligations, government has one central role in
society: The provision of the public good. The public good or public
goods are goods and services that advance the broader public interest
and welfare and where the benefits of the goods or services are open to
all. The government clearly has an interest in advancing the public
good through its activities and policies. \1\
---------------------------------------------------------------------------
\1\ Holly, N. (2018). The SHEEO and the Public Good. In D.A.
Tandberg, S. A. Sponsler, R.W. Hanna, & J.P. Guilbeau (Eds), The State
Higher Education Executive Officer and the Public Good: Developing New
Leadership for Improved Policy, Practice, and Research, (pp. 47-64).
New York, NY: Teachers College Press.
Higher education is challenging because in some ways it acts as a
public good, and in other ways it appears to fall short of that
definition. \2\ Higher education benefits society generally, and
college graduates directly, in a multitude of ways. The strength of our
country's economy, its health and security, its preeminence in science
and technology, the quality of its arts and culture, and the like can
all be tied directly back to our higher education system. \3\ Further,
we know that college graduates are less likely to be incarcerated, less
likely to depend on public assistance programs, more likely to vote,
more likely to volunteer, have better employment outcomes, enjoy
greater wealth, and pay more in taxes, among other essential positive
outcomes. \4\ In so many ways, the U.S. higher education system is
performing exceptionally well.
---------------------------------------------------------------------------
\2\ Ibid.
\3\ Owen-Smith, J. (2018). Research Universities and the Public
Good: Discovery for an Uncertain Future. Stanford University Press.
Smith, K. (2018). A Perfect Mess. The Unlikely Ascendency of American
Higher Education. Chicago: University of Chicago Press.
\4\ Ma, J., Pender, M., & Welch, M. (2016). Education Pays 2016:
The Benefits of Higher Education for Individuals and Society. The
College Board.
However, that is not the complete story. While simultaneously
serving as a critical access point for upward mobility and as a means
of tremendous opportunity, our higher education system also serves to
regenerate existing wealth, status, and privilege. \5\ In that specific
regard, it does little to improve society. In this case, higher
education is not functioning as a public good, and is, in fact, working
against the broader public interest. I am convinced that without
appropriate government support and oversight, higher education will
not, on its own, fully accomplish its mission of advancing the public
good. As others have said, the public interest ``is more than the sum
total of institutional interests.'' \6\
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\5\ Clotfelter, C. T. (2017). Unequal colleges in the age of
disparity. Harvard University Press. Armstrong, E. A., & Hamilton, L.
T. (2013). Paying for the Party. Harvard University Press. Bowen, W.
G., Kurzweil, M. A., Tobin, E. M., & Pichler, S. C. (2005). Equity and
excellence in American higher education. University of Virginia Press.
\6\ NCPPHE (2005). State capacity for higher education policy. San
Jose, CA: NCPPHE.
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Given the tremendous investment made in higher education (the
states and Federal Government currently appropriate over $140 billion
to higher education), \7\ the potential benefit of higher education to
society and individuals, and the apparent shortcomings and challenges
in our current higher education system, the government's interest and
responsibilities relative to higher education are great. These
interests ought to extend beyond the student outcomes of the Federal
student loan program (e.g., default rates or repayment rates), to
outcomes such as access and completion rates where the actual benefits
to individual students are realized. In that regard, the government has
an interest in ensuring the broader academic and economic value of the
colleges that receive taxpayer funding.
---------------------------------------------------------------------------
\7\ 7 The Pew Charitable Trusts (2017). How the governments
support higher education through the tax code. Washington, DC: Pew
Charitable Trust.
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Challenges Facing Higher Education
Significant inefficiencies appear built into our higher education
system. Currently, the overall national six-year completion rate is
58.3 percent. While that represents a small increase over the previous
year, it also means that over 40 percent of incoming students are
failing to complete any credential within six years of starting. \8\
Furthermore, there are leaks throughout the education-to-postsecondary
completion pipeline. As seen in Figure 1, for every 100 9th-grade
students, 74 graduate high school, 46 directly enter college, 31 are
still enrolled in their sophomore year, and 21 graduate their program
within 150 percent of time.
---------------------------------------------------------------------------
\8\ Shapiro, D., Dundar, A., Huie, F., Wakhungu, P.K., Bhimdiwala,
A. & Wilson, S. E. (2018). Completing College: A National View of
Student Completion Rates--Fall 2012 Cohort (Signature Report No. 16).
Herndon, VA: National Student Clearinghouse Research Center.
---------------------------------------------------------------------------
Figure 1:
For every 100 9th-grade students the number who graduate high
school, directly enter college, are still enrolled in their sophomore
year, and graduate their program within 150 percent of time.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: NCHEMS Information Center. Education Levels of the
Population: ACS Educational Attainment by Degree-Level and Age-Group
(American Community Survey).
Primary factors driving the low average postsecondary education
completion rate and the leaks in the education pipeline are the race
and income-based inequalities built into our system and the
stratification and unequal distribution of resources apparent within
and between our postsecondary institutions.
Our current higher education system results in much more favorable
outcomes for students who come from a higher socioeconomic status.
Barriers to access faced by lower income individuals prevent the social
mobility needed for our society to thrive. These income- and race-based
inequalities mean entire segments of our society are being kept out of
higher education based on factors independent of desire and talent. The
result is that our ability to reap the benefits of a fully functional
higher education system operating in the public interest is limited
because of the current structural inequalities built into the system.
\9\
---------------------------------------------------------------------------
\9\ Clotfelter, C. T. (2017). Unequal colleges in the age of
disparity. Harvard University Press. Armstrong, E. A., & Hamilton, L.
T. (2013). Paying for the Party. Harvard University Press. Bowen, W.
G., Kurzweil, M. A., Tobin, E. M., & Pichler, S. C. (2005). Equity and
excellence in American higher education. University of Virginia Press.
As seen in Table 1, the lowest achieving high-income students
attend postsecondary education at the same rate as the highest
achieving low-income students. Factors other than achievement and
ability are systematically keeping large numbers of lower-income
students out of higher education. Higher income students are likewise
more likely to complete college than their lower income peers. \10\
---------------------------------------------------------------------------
\10\ The College Board (2018). Trends in Higher Education. https:/
/trends.collegeboard.org/education-pays/figures-tables/completion-
rates-family-income-and-parental-education-level.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Further, race is a factor when it comes to access and success. As
seen in Figure 2, Hispanic and black Americans are critically
underrepresented among U.S. adults with a bachelor's degree or more.
This difference is impacted by Asian and white students having much
higher completion rates (68.9 percent and 66.1 percent, respectively)
than Hispanic and black students (48.6 percent and 39.5 percent,
respectively); \11\ and also because black and Hispanic 18 to 24-year-
olds are significantly less likely to enroll in college than their
white peers. \12\ However, it should be noted the Federal education
data collection systems do not allow for proper disaggregation of the
broad Asian category. Among certain Asian communities, large shares
live at or below the poverty line, and educational attainment levels
vary significantly. \13\
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\11\ Shapiro, D., Dundar, A., Huie, F., Wakhungu, P.K., Yuan, X.,
Nathan, A. & Bhimdiwali, A. (2018). Completing College: A National View
of Student Completion Rates--Fall 2012 Cohort (Signature Report No.
16). Herndon, VA: National Student Clearing house Research Center.
\12\ Marcus, J. (2018). Facts about race and college admission.
Hechinger Report. https://hechingerreport.org/facts-about-race-and-
college-admission/.
\13\ https://www.pewresearch.org/topics/asian-americans/.
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Figure 2:
Percentage of U.S. Adults with a Bachelor's Degree or More by Race/
Ethnicity
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: Ryan, C. L., & Bauman, K. (March 2016). Educational
Attainment in the United States: 2015. United States Census Bureau
Current Population Reports.
Further students of color are more likely to borrow, and take on
more debt, and are less likely to be able to pay down their debt than
their white peers. This is particularly true for African-American
students. Likewise, low-income students suffer similar challenges. \14\
These challenges are compounded by their lower completion rates
discussed above.
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\14\ Scott-Clayton, J. (2018). The looming student loan default
crisis is worse than we thought. Evidence Speaks Reports, Brooking
Institution, 2(34), 1-10. https://www.brookings.edu/wp-content/uploads/
2018/01/scott-clayton-report.pdf. https://www.washingtonpost.com/news/
grade-point/wp/2018/05/16/when-it-comes-to-student-debt-its-really-a-
matter-of-wealth/?utm_term=.65000fd945ea. https://www.brookings.edu/
research/what-accounts-for-gaps-in-student-loan-default-and-what-
happens-after/. https://www.reuters.com/article/us-column-marksjarvis-
college/low-income-college-students-can-fall-into-bad-hole-with-loans-
idUSKCN1LL2S8.
When low-income students and students of color access higher
education, they tend to be stratified into low-resourced and open/
broad-access institutions. For example, students whose family income
falls within the 80th percentile nationally are four times more likely
to enroll in selective schools than students in the 20th percentile.
Further, the under representation of low-income students at highly
selective schools has increased over time. \15\ Likewise, from1995 to
2013, 82 percent of new white enrollments have gone to the 468 most
selective colleges, while enrollments for Hispanics (72 percent) and
African Americans (68 percent) have gone to two-year and four-year
open-access schools. \16\
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\15\ Reardon, S.F., Kasman, M., Klasik, D., & Baker, R. (2016).
Agent-Based Simulation Models of the College Sorting Process. Journal
of Artificial Societies and Social Simulation 19(1)8.
\16\ Carnevale, A. & Strohl, J. (2013). Separate and Unequal: How
Higher Education Reinforces the Intergenerational Reproduction of White
Racial Privilege. Georgetown University, Center on Education and the
Workforce. https://cew.georgetown.edu/cew-reports/separate-unequal/.
Focusing specifically on our public higher education systems,
Bridget Terry Long found that, while holding other factors constant,
public research institutions received $2,504 per full-time equivalent
student more in state appropriations than other public four-year
schools and $5,227 more than public two-year colleges. She further
showed that institutions that enroll the students who are best prepared
academically to succeed, and therefore may require the fewest
resources, are receiving a disproportionate amount of state funding
relative to institutions that enroll students who are less prepared
academically. \17\
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\17\ Long, B. T. (2016). State Support for Higher Education: How
Changing the Distribution of Funds Could Improve College Completion
Rates. The Miller Center. http://web1.millercenter.org/commissions/
higher-ed/Long_No9.pdf.
These differences in funding and institutional resources matter.
Deming and Walters (2017) found that at community colleges, a 10
percent rise in spending increases associate degree completions by 10.6
percent and certificates by 23.2 percent (one year after the spending
increase). For bachelor's degrees, a 10 percent rise in spending
increases completions by between 4 and 5 percent (two to three years
after the spending increase). \18\, \19\
---------------------------------------------------------------------------
\18\ Deming, D. J., & Walters, C. R. (2017). The Impact of Price
Caps and Spending Cuts on US Postsecondary Attainment (No. w23736).
National Bureau of Economic Research. http://www.nber.org/papers/
w23736.
\19\ For examples of how these additional resources can be used to
create positive impact outcomes, see: Scrivener, et al. (2015).
Doubling graduation rates: Three-year effects of CUNY's Accelerated
Study in Associate Programs (ASAP) for developmental education
students. Washington, DC: MDRC. Sommo, C. et al (2018). Doubling
Graduation Rates in a New State: Two-Year Findings from the ASAP Ohio
Demonstration. Washington, DC: MDRC.
The stratification is even starker and the implications far greater
when enrollments and outcomes are compared across for-profit and
nonprofit institutions. Students of color and low-income students are
over represented and far more likely to enroll in for-profit
institutions than their white-majority and upper-income counterparts.
\20\ This matters because loan burden among for-profit students is far
greater, for-profit borrowers default at twice the rate of public two-
year borrowers (52 versus 26 percent after 12 years), the rate of
default among all for-profit entrants is nearly four times that of
public two-year entrants (47 percent versus 13 percent), graduation
rates are lower in the for-profit sector, and employment outcomes for
graduates from for-profit colleges are worse. \21\ For an in-depth
discussion of the risks associated with for-profit higher education,
see Tressie McMillan Cottom's Lower Ed. \22\
---------------------------------------------------------------------------
\20\ Libassi, C.J. (2018). The neglected college race gap: Racial
disparities among college completers. Washington, DC: Center for
American Progress. https://cdn.americanprogress.org/content/uploads/
2018/05/22135501/CollegeCompletions-Brief1.pdf. Yuen, V. (2019). New
insights into attainment for low-income students. Center for American
Progress. https://www.americanprogress.org/issues/education-
postsecondary/reports/2019/02/21/466229/new-insights-attainment-low-
income-students/.
\21\ Cellini, S. R., & Turner, N. (2016). Gainfully employed?
Assessing the employment and earnings of for-profit college students
using administrative data (No. w22287). National Bureau of Economic
Research.
\22\ Cottom, T. M. (2017). Lower ed: The troubling rise of for-
profit colleges in the new economy. The New Press.
Why do these postsecondary inequalities exist? They can be traced
back to larger inequalities that are historic in our country, and which
currently begin at birth for low-income individuals and people of
color. \23\ They are related to our country's historic and pervasive
institutionalized racism and the fact that our country's social and
economic systems have, since its founding, benefited the wealthy.
Racial and income-based disparities in access to quality preK-12
education, healthcare, and social capital, among other factors, have
all limited opportunity. Likewise, college costs; college and
university recruitment policies; internal college services, policies,
and practices; and the like have limited opportunity and success in
higher education. \24\ The question then is: What can be done about
these problems?
---------------------------------------------------------------------------
\23\ Putnam, R. D. (2016). Our kids: The American dream in crisis.
Simon and Schuster. Bonilla-Silva, E. (2006). Racism without racists:
Color-blind racism and the persistence of racial inequality in the
United States. Rowman & Littlefield Publishers. Oliver, M., & Shapiro,
T. (2013). Black wealth/white wealth: A new perspective on racial
inequality. Routledge. Clotfelter, C. T. (2017). Unequal colleges in
the age of disparity. Harvard University Press. Armstrong, E. A., &
Hamilton, L. T. (2013). Paying for the Party. Harvard University Press.
Bowen, W. G., Kurzweil, M. A., Tobin, E. M., & Pichler, S. C. (2005).
Equity and excellence in American higher education. University of
Virginia Press.
\24\ Goldrick-Rab, S. (2016). Paying the price: College costs,
financial aid, and the betrayal of the American dream. University of
Chicago Press. Putnam, R. D. (2016). Our kids: The American dream in
crisis. Simon and Schuster. Bonilla-Silva, E. (2006). Racism without
racists: Color-blind racism and the persistence of racial inequality in
the United States. Rowman & Littlefield Publishers. Oliver, M., &
Shapiro, T. (2013). Black wealth/white wealth: A new perspective on
racial inequality. Routledge. Clotfelter, C. T. (2017). Unequal
colleges in the age of disparity. Harvard University Press. Armstrong,
E. A., & Hamilton, L. T. (2013). Paying for the Party. Harvard
University Press. Bowen, W. G., Kurzweil, M. A., Tobin, E. M., &
Pichler, S. C. (2005). Equity and excellence in American higher
education. University of Virginia Press. Carnevale, A. & Strohl, J.
(2013). Separate and Unequal: How Higher Education Reinforces the
Intergenerational Reproduction of White Racial Privilege. Georgetown
University, Center on Education and the Workforce. https://
cew.georgetown.edu/cew-reports/separate-unequal/. Long, B. T. (2016).
State Support for Higher Education: How Changing the Distribution of
Funds Could Improve College Completion Rates. The Miller Center. http:/
/web1.millercenter.org/commissions/higher-ed/Long_No9.pdf. Deming, D.
J., & Walters, C. R. (2017). The Impact of Price Caps and Spending Cuts
on US Postsecondary Attainment (No. w23736). National Bureau of
Economic Research. http://www.nber.org/papers/w23736 Jackson, C.K.
(2018). Does school spending matter. The new literature on the old
question. https://works.bepress.com/c_kirabo_jackson/38/. Chingos, M.M.
& Blagg, K. (2017). Do poor kids get their fair share of school
funding? Washington, DC: Urban Institute. https://apps.urban.org/
features/school-funding-do-poor-kids-get-fair-share/.
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Advancing the Government's Interest in Higher Education Via
Accountability
The data points previously discussed make clear the need to improve
the degree to which, and how, we fund higher education and also the
financial support we provide students. It is imperative that we are
more intentional regarding how we fund and design our financial aid
systems and the manner and level of direct institutional
appropriations. \25\ However, given the focus of this hearing, I will
focus specifically on our accountability system for higher education,
with a special focus on the states and their efforts. Later in the
recommendations, I will return to questions regarding how we might
better use finance policy to support low-income students and students
of color.
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\25\ For example, better directing resources where they are needed
most: low-income students and the underfunded institution where they
enroll.
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Accountability and the Triad
The triad (sometimes referred to as the accountability triad or the
program integrity triad) consists of three entities: accreditation
agencies, the Federal Government, and states. The triad was established
under the original 1965 Higher Education Act (HEA) to ensure that
institutions meet certain standards regarding quality and capacity
before they are deemed eligible under Title IV for students to receive
Federal financial aid.
Accreditors
Accreditors use peer review as the foundation of their effort to
ensure that institutions meet a minimal level of educational quality.
Accreditors focus on institutions' educational missions and the extent
to which the institution engages in quality improvement, their student
learning outcomes, and their financial and human resources.
Accreditors' reviews are often intensive, involving significant data
and information collection, site visits, and iterative discussions.
Some have recommended changes to accreditation to better a line the
review processes to student outcomes and equity considerations. For
example, accreditors could develop common measures of student learning
and success and disaggregate those measures and others by income and
race/ethnicity. \26\ Loss of accreditation generally does not happen
quickly, and when it does it frequently results in institutional
closure.
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\26\ https://www.americanprogress.org/issues/education-
postsecondary/reports/2018/04/25/449937/college-accreditors-miss-mark-
student-outcomes/.
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The Federal Government
The Federal Government also plays a key role in the triad. The most
direct participant is the Department of Education which implements the
provisions of the HEA and its own rules and regulations. They are the
primary interface with the accreditors, providing both approval and
oversight. They also directly interact with institutions, primarily
around student financial aid. They administer Federal programs, engage
in data collection and research, and operate and oversee the giant
Federal student financial program, among other responsibilities.
Legislatively, the Federal Government has been primarily concerned
with consumer protection and consumer information. \27\ Examples of
consumer protection include Cohort Default Rate, Financial
Responsibility standards, Gainful Employment, and the ``90/10 rule''.
It is important to note that many of these existing consumer protection
policies were designed to target the areas of greatest risk to students
and taxpayers. Default rates pose the most significant harm to students
and taxpayers. Gainful employment was designed to target the
variability in quality among career training programs within the for-
profit sector and certificate programs. 90/10 deals with whether a for-
profit product is of sufficient enough quality to attract at least 10
percent of non-government private investment. Examples of Federal
consumer information efforts include, the College Scorecard, the Net
Price Calculator, the Financial Aid Shopping Sheet, College Navigator,
and the College Affordability and Transparency Center. The
effectiveness of these transparency efforts has not been firmly
established; however, there is some evidence that wealthier students
tend to be more likely to access and respond to such information
efforts. \28\ This indicates that while transparency in outcomes is
helpful, it is not nearly sufficient--the Federal Government--and its
partners in states and accrediting agencies--can and should have a
robust role in consumer protection to ensure students are not defrauded
and are receiving a quality education of value in their pursuit of a
higher education.
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\27\ Kelchen, R. (2018). Higher education accountability. Johns
Hopkins University Press.
\28\ Hurwitz & Smith (2018). Student Responsiveness to Earnings
Data in the College Scorecard. Economic Inquiry, 56(2), 1220-1243.
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The States
State authorization serves as the first and foundational formal act
in the establishment of a postsecondary institution. To legally grant a
degree and other recognized credentials, a postsecondary institution
must be authorized by a state government. States (or colonies, as the
case may be) have been authorizing institutions since colonial times.
The authorizing role of the states in the triad was statutorily
reinforced and mandated in the original 1965 Higher Education Act and
each subsequent reauthorization. Under the HEA, state authorization has
been a baseline requirement for any institution seeking to gain or
maintain access to Federal financial aid dollars. Authorization,
however, varies significantly by state. Some states undergo significant
information and data collection and conduct site visits. In other
states, the process is much simpler and fairly passive. Some states
have a formal reauthorization process that is undertaken after a
certain number of years and involves an examination of student outcomes
and other important indicators. \29\
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\29\ Harnisch, T., Nassirian, B., Saddler, A., & Coleman, A.
(2016). Enhancing State Authorization: The Need for Action by States as
Stewards of Higher Education Performance. State-Federal Partnerships in
Postsecondary Education. Education Commission of the States.
Since 2010 distance education providers are required to seek
authorization in every state where their students are physically
located--though the regulations have been recently delayed. This led to
the creation of state authorization reciprocity agreements and the
National Council for State Authorization Reciprocity Agreements (NC-
SARA). NC-SARA is a voluntary organization that has established
baseline authorization requirements that states agree to. Institutions
pay to join NC-SARA, and if they receive authorization in a member
state, their authorization is recognized in all NC-SARA states.
Currently, 49 states are members of NC-SARA and close to 2,000
institutions participate (including public, private non-profit, and
private for-profit institutions). NC-SARA has developed quickly;
allowed institutions who may have otherwise had to quit offering
distance education to continue to do so, and provided baseline quality
standards that apply uniformly across the participating states.
However, critics have argued that NC-SARA has reduced state authority,
not included enough consumer protections and student recourse
provisions, and does not have enough state oversight. \30\
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\30\ https://s3-us-west-2.amazonaws.com/production.tcf.org/app/
uploads/2016/06/17174318/Shireman-Mattes-Comments-Re-SARA-1.pdf.
https://www.calfac.org/sites/main/files/file-attachments/close-calif-
covert-4profit-loophole.pdf.
States also engage in other accountability efforts beyond
authorization. They approve new academic programs (generally referred
to as program approval authority). The program approval process is
meant to ensure that colleges are not unnecessarily duplicating
programs and that these programs meet certain quality standards and
state educational needs. Again, the scope and procedures for program
approval vary greatly across the states. For example, in some states,
program approval only applies to public institutions; in others, state
boards or agencies approve all new programs regardless of the sector.
Likewise, the specific procedures and what programs require approval
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also vary across the states.
States also engage in data collection and reporting. This effort
serves multiple purposes. It signals to institutions what outcomes and
measures are important to the state; it provides state policymakers
with data and information they can use to assess institutional
performance, design policies, and intervene when necessary; and it
serves a consumer information function. \31\ Most states have
longitudinal student-level data systems, which if used properly can
provide significant information and support robust research efforts.
However, the extent to which the data systems are used in this manner
varies greatly by state.
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\31\ Kelchen, R. (2018). Higher education accountability. Johns
Hopkins University Press.
States engage in performance management. One of the most popular is
performance- or outcomes-based funding (OBF). At least 30 states tie
state appropriations directly to certain outcomes measures. Under these
arrangements, colleges and universities earn a portion (and in some
states all) of their state funding according to how well they perform
on a variety of measures including credential completion, credit hour
completion, graduation rates, and the like. The research on the impact
of OBF on completions has revealed little impact on average, with some
positive effects over time. However, the research has also revealed
significant equity concerns regarding enrollments of students of color
and low-income students and the distribution of state funds across
well-resourced and lower-resourced institutions. \32\ That said,
research has shown that including certain equity bonuses for the
enrollment and credential completion of low-income students and
underrepresented students of color has mitigated some of the unintended
consequences and produced positive outcomes in certain circumstances.
\33\
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\32\ Hillman, N., & Corral, D. (2017). The Equity Implications of
Paying for Performance in Higher Education. American Behavioral
Scientist, 61(14), 1757-1772. Li, A. Y., Gandara, D., & Assalone, A.
(2018). Equity or Disparity: Do Performance Funding Policies
Disadvantage 2-Year Minority-Serving Institutions? Community College
Review, 46(3), 288-315. Kelchen, R., & Stedrak, L. J. (2016). Does
Performance-Based Funding Affect Colleges' Financial Priorities?
Journal of Education Finance, 41(3), 302-321. Umbricht, M. R.,
Fernandez, F., & Ortagus, J. C. (2017). An examination of the
(un)intended consequences of performance funding in higher education.
Educational Policy, 31(5), 643-673. Birdsall, C. (2018). Performance
Management in Public Higher Education: Unintended Consequences and the
Implications of Organizational Diversity. Public Performance &
Management Review, 1-27. Hu, X., & Villarreal, P. (2018). Public
Tuition on the Rise: Estimating the Effects of Louisiana's Performance-
Based Funding Policy on Institutional Tuition Levels. Research in
Higher Education, 1-34. Hagood, L. P. (2017). The financial benefits
and burdens of performance funding (Doctoral dissertation, University
of Georgia). https://athenaeum.libs.uga.edu/handle/10724/37779.
Gandara, D., & Rutherford, A. (2018). Mitigating unintended impacts?
The effects of premiums for underserved populations in performance-
funding policies for higher education. Research in Higher Education,
59(6), 681-703. Hillman, N. & Crespin-Trujillo (2018). State
accountability policies: Can performance funding be equitable? In G.
Orfield & N. Hillman (Eds). Accountability and Opportunity in Higher
Education: The Civil Rights Dimension. Harvard Education Press.
Kelchen, R. (2018). Do performance-based funding policies affect
underrepresented student enrollment? The Journal of Higher Education,
1-26.
\33\ Li, A. Y., Gandara, D., & Assalone, A. (2018). Equity or
Disparity: Do Performance Funding Policies Disadvantage 2-Year
Minority-Serving Institutions? Community College Review, 46(3), 288-
315. Kelchen, R. (2018). Do performance-based funding policies affect
underrepresented student enrollment? The Journal of Higher Education,
1-26.
Finally, merely viewing the states' role from the perspective of
the triad as outlined in the HEA, vastly understates the states' role.
Far beyond merely authorizing institutions, state agencies and
appointees, may in some cases, control and operate the public
institutions enrolling the vast majority of postsecondary students in
their states. Even where state agencies do not have direct operational
control, they interact with the institutions on a daily basis, engage
in the accountability actions described above, often dull out state
appropriations to institutions, administer financial aid program, help
design policy, implement policy, evaluate policies, among other
responsibilities and actions. These agencies and offices are
accountable to the public, in service of the public interest.
Recommendations
Given the significant challenges facing our U.S. higher education
system in serving low-income students and students of color, my
recommendations will primarily focus on how our accountability efforts
might better protect and serve these students. Experience and research
have shown that without clear and deliberate action taken on behalf of
underrepresented students, the system will not, on its own, serve them
appropriately. \34\ This is an area of clear governmental interest. Our
higher education system cannot be deemed as serving the public good if
it systematically excludes certain students. Two overriding principles
ought to guide our accountability efforts: (1) our efforts ought to
focus on improving the quality of all postsecondary education
providers, and (2) our efforts ought to give special focus and
attention to the enrollment and successful completion of low-income
students and students of color. Here I provide several recommendations
regarding accountability systems. I then include a few suggestions for
consideration regarding new Federal higher education finance policy. I
do this because, in many cases, we cannot expect significant
improvement in student outcomes without additional resources. This is
particularly true regarding our under-resourced institutions and our
low-income students and students of color.
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\34\ Orfield, G., & Hillman, N. (2018). Accountability and
Opportunity in Higher Education: The Civil Rights Dimension. Harvard
Education Press.
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Accountability Policy
Protect and Strengthen the Triad
The U.S. higher education system relies on a functional and robust
program integrity triad of the Federal Government, accreditors, and
state governments. It is critical that state authorization and Press
accreditation be preserved and improved and communication and data
sharing among the members of the triad be enhanced. \35\ Given the
serious challenges for low-income students and students of color,
ensuring that we have a functional program integrity triad and consumer
protections is critical. Opening lines of communication, developing
agreed upon protocols for information and data collection and sharing,
developing shared understandings and agreements regarding roles and
responsibilities, and engaging in more collaborative work and peer
learning would all help the triad function more effectively. It is
important to note that the participation of each member of the triad
allows institutions to receive a level of endorsement that may be used
by the institution to signal compliance and quality. Therefore, each
member must independently act as an evaluator of quality while also
working in cooperation with the other members of the triad. The various
responsibilities of the members of the triad should be better
delineated. However, some duplication of responsibilities is necessary
to ensure adequate oversight. Issues such as quality assurance and
consumer protection and institution's finances and governance can all
be evaluated from different perspectives and in different manners,
reflective of each member of the triad's unique role and position
relative to the institutions. Recent closures of institutions, often
sudden closures, show the damage that can be done to students when the
triad's oversight functions fail to ensure proper communication and
preparation. \36\ Better engagement from all members of the triad in
overseeing an institution's finances and integrity may help prevent
future sudden failures.
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\35\ Anderson, R.E. (2019). State and Federal Cooperation Can
Improve Higher Education Quality. Washington, DC: Higher Learning
Advocates. https://higherlearningadvocates.org/2019/01/31/state-and-
Federal-cooperation-can-improve-higher-education-quality/
?platform=hootsuite.
\36\ For and excellent example of how devastating these closures
can be, please read: https://www.chronicle.com/interactives/20190404-
ForProfit?cid=at&utm--source=at&utm--medium=en&cid=at.
Federal Action: (1) Enhance the roles of the accreditors and the
states in the triad to examine and take action on low student outcomes,
using revisions to the Higher Education Act; (2) annually convene the
members of the triad for professional development, coordination, and
information and data sharing; (3) develop and provide a data sharing
mechanism for members of the triad; and (4) ensure that each member of
the triad is considering data and metrics related to low-income
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students and students of color in their quality assurance efforts.
Other Federal Actions: (1) Encourage states to work with NC-SARA to
ensure that appropriate quality standards, consumer protections, and
student recourse provisions are included in the reciprocity agreements
and that the organization establishes appropriate state oversight; (2)
Encourage states to ensure that their state authorization and program
approval efforts are oriented to quality assurance, quality
improvement, and consumer protection, and that they consider metrics
related to low-income students and students of color. Some additional
baseline factors states ought to include in their authorization
programs include: a student complaint process; policies to deny,
revoke, and suspend authorization; policies and procedures regarding
institutional closure and how to respond to institutions nearing
closure; and a certification process for programs that meet state
licensure requirements.
Improve Data and Research
The first step to addressing a problem is being aware of it.
Policymakers at all levels need to be made aware of the data and
outcomes for low-income students and students of color. This requires
intentional action and high-quality student-level data systems.
Policymakers need to collect, analyze, and report data disaggregated by
income and race. Lawmakers ought to ask for and incentivize research
addressing the causes of and solutions to the challenges related to
low-income students and students of color. The data, reports, and
research need to be publicized and distributed to decision makers.
Policymakers then need to use the data, analysis, and research to
create explicit equity goals, plans, and policies. \37\
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\37\ Excellent resources for this type of work include: https://
postsecondarydata.sheeo.org/. http://www.ihep.org/postsecdata/
resources-reports/national-postsecondary-data-infrastructure. https://
cue.usc.edu/tools/. https://edtrust.org/our-resources/data-tools/.
Federal Action: (1) Implement a Federal student-level data system,
including data on student race/ethnicity and income; (2) ensure that
Federal data and reports include outcomes by income and race/ethnicity;
(3) ensure that Federal research and federally funded research explore
ways to improve equity in higher education; (4) disaggregate data by
racial/ethnic groups within the Asian community and collect finer
grained data on Native American students, especially in regard to
tribal affiliation; (5) provide financial support in the form of grants
to states to further develop and use their student-level data systems
to collect, report, and analyze data on income and race/ethnicity and
outcomes for those students; and (6) through the Institute of Education
Sciences, provide research grant funding to specifically address
challenges related to low-income students and students of color.
Outcomes-Based Funding for Equity
As indicated earlier, a spate of recent research has raised a
number of red flags regarding traditional state outcomes-based funding
(OBF) and equity. However, newer OBF models that include equity
indicators within the OBF formula have been shown, in the literature,
to produce some positive outcomes. This is an example of where without
deliberate attention to underrepresented students in the design of the
program, a well-intentioned accountability program will actually work
against the larger government interests. \38\
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\38\ Orfield, G., & Hillman, N. (2018). Accountability and
Opportunity in Higher Education: The Civil Rights Dimension. Harvard
Education Press.
Federal Action: (1) Encourage states to include equity premiums in
their OBF programs (if they use OBF); (2) As states that have a stake
in the value of the institutions that receive their state funding, the
Federal Government also has a stake in the value of institutions that
receive Federal financial aid funding. Federal Government should
consider the lessons from state-based outcomes-based funding and ensure
that any increased focus on student outcomes, such as access and
completion is done so from an equity perspective. In developing any
Federal accountability program, the Federal Government should include
equity indicators and be cognizant of the differences in institutional
resources, the legacy of inadequate funding for many of our
institutions serving low-income students and students of color, and the
extent to which institutions spend their money on supporting their
students. This should inform how Federal accountability examines
institutional outcomes and provide under-resourced and well-intentioned
institutions with the support and time they need to improve before
applying any sanctions that could have severe unintended consequences.
Maintain and Increase Oversight of the For-Profit Sector
The outcomes for low-income students and students of color and, in
particular, black students, in the for-profit sector \39\ necessitate
increased scrutiny and oversight of the sector and the primary
accreditors of the for-profit institutions. Recent efforts to roll back
restrictions and sanctions for for-profit colleges have made abuses
more likely. \40\ A renewed effort to monitor and hold the sector
accountable for failures and abuses is necessary. \41\ But it is also
critical for the Federal Government to be nimble and recognize the new
forms of for-profit colleges, including those that convert to non-
profit college and contract with their former for-profit entity as a
provider of academic and administrative services--often for a large
share of tuition, ranging up to 60 percent of tuition.
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\39\ Libassi, C.J. (2018). The neglected college race gap: Racial
disparities among college completers. Washington, DC: Center for
American Progress. https://cdn.americanprogress.org/content/uploads/
2018/05/22135501/CollegeCompletions-Brief1.pdf. Scott-Clayton, J.
(2018). The looming student loan default crisis is worse than we
thought. Evidence Speaks Reports, Brooking Institution, 2(34), 1-10.
https://www.brookings.edu/wp-content/uploads/2018/01/scott-clayton-
report.pdf. Smith, P. & Parrish, L. (2014). Do students of color profit
from for-profit college? Poor outcomes and high debt hamper attendees'
future. Washington, DC: Center for Responsible Lending. https://
www.responsiblelending.org/student-loans/research-policy/CRL-For-
Profit-Univ-FINAL.pdf.
\40\ https://www.politico.com/story/2017/08/31/devos-trump-
forprofit-college-education-242193. https://mic.com/articles/189386/
the-department-of-education-is-scaling-back-its-oversight-of-for-
profit-colleges-heres-how-to-protect-yourself#.Kb7xGjjvo.
\41\ For an in-depth discussion of the risks associated with for-
profit higher education see: Cottom, T. M. (2017). Lower ed: The
troubling rise of for-profit colleges in the new economy. The New
Press.
Federal Action: (1) Protect and maintain current oversight and
regulatory tools, including the enforcement of the gainful employment
rule; (2) enforce with fidelity current requirements for accreditors
that accredit for-profit colleges; (3) review and approve new student
fraud claims against for-profit colleges in a fair and efficient
manner; and (4) consider returning the 90/10 rule to the original 85/15
requirement. \42\
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\42\ Looney, A. & Lee, V. (2019). Does the 90/10 rule unfairly
target proprietary institutions or under-resourced schools? Washington,
DC: Brookings. https://www.brookings.edu/research/does-the-90-10-rule-
unfairly-target-proprietary-institutions-or-under-resourced-schools/.
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Finance Policies
With each of these finance policy considerations, it would be
appropriate to connect additional oversight and accountability to the
increased financial support. However, if such accountability efforts do
not specifically include equity provisions regarding low-income
students and students of color and institutions' missions, among other
factors, the efforts may result in significant unintended negative
consequences. \43\
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\43\ Orfield, G., & Hillman, N. (2018). Accountability and
Opportunity in Higher Education: The Civil Rights Dimension. Harvard
Education Press.
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Support a Title I Type Program for Higher Education, Including Support
for HBCUs and other MSIs
The Federal Title I program provides Federal funds to schools with
high percentages of low-income students. These funds pay for extra
educational services to help low-income students succeed regardless of
income or other factors. While there are some mixed outcomes and
findings related to the Federal K-12 Title I program, at least two
recent multistate studies using sophisticated, quasi-experimental
research designs have found positive impacts related to Title I
funding, including improved graduation rates and a reduction in
dropouts. \44\ A Title I-type program could be designed for higher
education. Third Way has proposed a potential design of such a program
that would include three different levels of grants that vary based on
the number and percentage of Pell students a college enrolls, with
potential bonuses for successful campuses. \45\ Similar to the current
K-12 Title I program, a requirement that Federal dollars supplement
rather than supplant state and local funding would be essential. While
not specifically focused on students of color (at least not as
currently proposed), such provisions could be included, and if not, the
inequalities in income and wealth based on race make a Title I-type
program for higher education a potentially effective mechanism for
addressing such inequalities. As noted earlier, increased financial
resources at community colleges and non-selective public four-year
universities can have significant positive impacts on student outcomes.
\46\ Likewise, additional resources are likely to reduce costs to
students. \47\
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\44\ Cascio, E.U., Gordon, N., & Reber, S. (2013). Local Responses
to Federal Grants: Evidence from the Introduction of Title I in the
South. American Economic Journal: Economic Policy, 5 (3):126-159.
Johnson, R.C. (2015). Follow the Money: School Spending from Title I to
Adult Earnings. RSF: The Russell Sage Foundation Journal of the Social
Sciences, 1(3):50.
\45\ https://www.thirdway.org/memo/creating-a-title-i-for-higher-
ed.
\46\ Deming, D. J., & Walters, C. R. (2017). The Impact of Price
Caps and Spending Cuts on U.S. Postsecondary Attainment (No. w23736).
National Bureau of Economic Research. http://www.nber.org/papers/
w23736. Scrivener, et al. (2015). Doubling graduation rates: Three-year
effects of CUNY's Accelerated Study in Associate Programs (ASAP) for
developmental education students. Washington, DC: MDRC. Sommo, C. et al
(2018). Doubling Graduation Rates in a New State: Two-Year Findings
from the ASAP Ohio Demonstration. Washington, DC: MDRC.
\47\ Webber, D. A. (2017). State divestment and tuition at public
institutions. Economics of Education Review, 60, 1-4.
One of the most direct ways Federal lawmakers can positively impact
students of color is through their support of historically black
colleges and universities (HBCUs) and other minority serving
institutions (MSIs). These institutions serve a large share of students
of color and also large shares of low-income students. HBCUs, in
particular, have a historic and unique mission to serve as access
points and engines of opportunity and mobility. They also serve unique
cultural purposes within our country and their communities. On average,
the outcomes for students of color who attend MSIs are better than
similar students who do not attend MSIs. These include graduation and
completion rates, labor market outcomes, and return on investment,
among other outcomes. As noted earlier, increased financial resources
at our colleges and universities can have large positive impacts on
student completions. \48\
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\48\ Espinosa, L. L., Turk, J. M., & Taylor, M. (2017). Pulling
Back the Curtain: Enrollment and Outcomes at Minority Serving
Institutions. Washington, DC: American Council on Education. Espinosa,
L., Kelchen, R., & Taylor, M. (2018). Minority Serving Institutions as
Engines of Upward Mobility. Washington, DC: American Council on
Education. Gasman, M., Samayoa, A. C., & Nettles, M. (2017). Investing
in Student Success: Examining the Return on Investment for Minority-
Serving Institutions. ETS Research Report Series, 2017(1), 1-66. Park,
T. J., Flores, S. M., & Ryan, C. J. (2018). Labor Market Returns for
Graduates of Hispanic-Serving Institutions. Research in Higher
Education, 59(1), 29-53. Flores, S. M., & Park, T. J. (2013). Race,
ethnicity, and college success: Examining the continued significance of
the minority-serving institution. Educational Researcher, 42(3), 115-
128. Flores, S. M., & Park, T. J. (2015). The effect of enrolling in a
minority-serving institution for Black and Hispanic students in Texas.
Research in Higher Education, 56(3), 247-276.
Federal Action: (1) Design and implement a Title I-type program for
higher education that would provide grants through state higher
education agencies to colleges and universities that serve large
shares/numbers of lower-income students. (2) Federal Action: Increase
Federal financial support for MSIs including: HBCUs, tribal colleges,
Hispanic-serving institutions, Alaska Native-serving institutions,
Native Hawaiian-serving institutions, predominantly black institutions,
Asian American and Native American Pacific Islander-serving
institutions, and Native American-serving nontribal institutions.
Funding Adequacy
Within higher education, the question of what it costs to
successfully educate and graduate students has not been properly
answered. Nevertheless, we know that resources matter. \49\ Likewise,
different students need different resources and levels of support. \50\
Focusing on the public institutions that enroll relatively large shares
of students of color and lower-income students, our approaches to
institutional funding have resulted in inequitable institutional
resources. \51\ For example, black students make up roughly 6 percent
of public research university enrollments and 15 percent of public two-
year college enrollments, yet research universities have significantly
higher per student resources. \52\ New approaches are needed that drive
additional resources to the public institutions that serve larger
shares of students of color and lower-income students. The central
argument for an adequacy approach to funding education institutions is
that these students need more, not less, support than students from
advantaged backgrounds, and our funding formula should account for that
fact. Our current systems for funding public higher education advantage
research universities, other high resourced institutions, those with
political clout, and those that serve predominantly white and wealthier
students and more out-of-state students. \53\ Reforming the funding
system to drive governmental support to the institutions serving the
types of students who have not been served as well by our current
system would pay significant dividends. \54\, \55\
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\49\ Deming, D. J., & Walters, C. R. (2017). The Impact of Price
Caps and Spending Cuts on U.S. Postsecondary Attainment (No. w23736).
National Bureau of Economic Research. http://www.nber.org/papers/
w23736.
\50\ Swail, W. S. (2003). Retaining Minority Students in Higher
Education: A Framework for Success. ASHE-ERIC Higher Education Report.
Jossey-Bass Higher and Adult Education Series. San Francisco, CA:
Jossey-Bass. Museus, S. D. (2014). The culturally engaging campus
environments (CECE) model: A new theory of success among racially
diverse college student populations. In Higher education: Handbook of
theory and research (pp. 189-227). Springer, Dordrecht. Smith, D. G.
(2015). Diversity's promise for higher education: Making it work. JHU
Press.
\51\ Carnevale, A. & Strohl, J. (2013). Separate and Unequal: How
Higher Education Reinforces the Intergenerational Reproduction of White
Racial Privilege. Georgetown University, Center on Education and the
Workforce. https://cew.georgetown.edu/cew-reports/separate-unequal/.
Long, B. T. (2016). State Support for Higher Education: How Changing
the Distribution of Funds Could Improve College Completion Rates. The
Miller Center. http://web1.millercenter.org/commissions/higher-ed/
Long_No9.pdf.
\52\ Digest of Education Statistics (2017). Carnevale, A. &
Strohl, J. (2013). Separate and Unequal: How Higher Education
Reinforces the Intergenerational Reproduction of White Racial
Privilege. Georgetown University, Center on Education and the
Workforce. https://cew.georgetown.edu/cew-reports/separate-unequal/.
Long, B. T. (2016). State Support for Higher Education: How Changing
the Distribution of Funds Could Improve College Completion Rates. The
Miller Center. http://web1.millercenter.org/commissions/higher-ed/
Long_No9.pdf.
\53\ McLendon, M. K., Mokher, C. G., & Doyle, W. (2009).
`Privileging' Public Research Universities: An Empirical Analysis of
the Distribution of State Appropriations Across Research and Non-
Research Universities. Journal of Education Finance, 372-401. Hagood,
L. P. (2017). The financial benefits and burdens of performance funding
(Doctoral dissertation, University of Georgia). https://
athenaeum.libs.uga.edu/handle/10724/37779. Hillman, N., & Corral, D.
(2017). The Equity Implications of Paying for Performance in Higher
Education. American Behavioral Scientist, 61(14), 1757-1772. Birdsall,
C. (2018). Performance Management in Public Higher Education:
Unintended Consequences and the Implications of Organizational
Diversity. Public Performance & Management Review, 1-27. Carnevale, A.
& Strohl, J. (2013). Separate and Unequal: How Higher Education
Reinforces the Intergenerational Reproduction of White Racial
Privilege. Georgetown University, Center on Education and the
Workforce. https://cew.georgetown.edu/cew-reports/separate-unequal/.
Long, B. T. (2016). State Support for Higher Education: How Changing
the Distribution of Funds Could Improve College Completion Rates. The
Miller Center. http://web1.millercenter.org/commissions/higher-ed/
Long_No9.pdf. Jaquette, O. (2017). State University No More: Out-of-
State Enrollment and the Growing Exclusion of High-Achieving, Low-
Income Students at Public Flagship Universities. Jack Kent Cooke
Foundation https://www.jkcf.org/research/state-university-no-more-out-
of-state-enrollment-and-the-growing-exclusion-of-high-achieving-low-
income-students-at-public-flagship-universities/.
\54\ Long, B. T. (2016). State Support for Higher Education: How
Changing the Distribution of Funds Could Improve College Completion
Rates. The Miller Center. http://web1.millercenter.org/commissions/
higher-ed/Long_No9.pdf. Kahlenberg, R. D., Shireman, R., Quick, K., &
Habash, T. (2018). Policy Strategies for pursuing adequate funding of
community colleges. NYC: The Century Foundation. https://tcf.org/
content/report/policy-strategies-pursuing-adequate-funding-community-
colleges/?agreed=1.
\55\ Scrivener, et al.. (2015). Doubling graduation rates: Three-
year effects of CUNY's Accelerated Study in Associate Programs (ASAP)
for developmental education students. Washington, DC: MDRC. Sommo, C.
et al (2018). Doubling Graduation Rates in a New State: Two-Year
Findings from the ASAP Ohio Demonstration. Washington, DC: MDRC.
Federal Action: (1) Federal lawmakers provide funding for the
development of adequacy funding formula for public higher education
and/or (2) Federal lawmakers make the adoption of approved adequacy
funding formula a requirement for participation in the Federal-state
partnership described above.
Federal-State Partnership for College Affordability
Because higher education costs are so high and the gap between what
many students can pay and what institutions charge is so large, the
burden of making college affordable must be shared. The State Higher
Education Executive Officers Association (SHEEO) has proposed a measure
of affordability and a Federal-state partnership that would ultimately
make college affordable for lower-income students. \56\ SHEEO proposes
a forward-looking measure of college affordability where students
devote no more than 10 percent of their discretionary income toward
student loan repayment. The Federal-state partnership proposal built on
existing financial aid allocations from all sources in each state. Via
a Federal-state matching framework, it was designed to encourage states
(in part, through Federal matching dollars) to target additional
funding to need-based financial aid programs, reduce general student
cost (reducing/limiting tuition and other costs), and to specifically
reduce the net price for students from lower-income families. To
achieve this affordability threshold, it could cost an estimated
additional $34 billion per year in state and Federal support for higher
education. On average, if Federal matching funds were secured, states
would need to increase total educational appropriations 5 percent each
year for four years to meet the SHEEO affordability threshold. A
combination of increased need-based financial aid and increased
appropriations to institutions would be needed to meet the
affordability threshold. For a compelling, in-depth, and well
researched discussion of the need for such an effort see Sara Goldrick-
Rab's Paying the Price (2016). \57\
---------------------------------------------------------------------------
\56\ Tandberg, D.A., Laderman, S., & Carlson, A. (2017). A
Federal-State Partnership for True College Affordability. Boulder, CO:
SHEEO. http://www.sheeo.org/resources/publications/Federal-state-
partnership-true-college-affordability.
\57\ Goldrick-Rab, S. (2016). Paying the price: College costs,
financial aid, and the betrayal of the American dream. University of
Chicago Press.
Federal Action: Federal lawmakers design a Federal matching program
that provides Federal matching dollars for new state investments meant
to lower the cost for students to attend public higher education,
particularly for lower-income students.
Conclusion
With appropriate clear and deliberate action taken on behalf of
underrepresented students, the system can and will serve all students
better. This can be done through better coordination, partnership, and
oversight and through more and better data and information,
disaggregated by income and race/ethnicity. Further, specific efforts
to drive resources to low-income students and students of color and the
institutions that serve them are also needed.
It is an honor to be asked to present this testimony and I commend
you for your service and for addressing these important issues.
Thank you.
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______
[summary statement of david tandberg]
I have been asked to address the issue of accountability in higher
education. Among its many obligations, government has one central role
in society: The provision of the public good. The public good or public
goods are goods and services that advance the broader public interest
and welfare and where the benefits of the goods or services are open to
all.
Higher education is difficult because in some ways it acts as a
public good and in other ways it appears to fall short of that
definition. Higher education benefits society generally, and college
graduates directly, in a multitude of ways. In those regards, the U.S.
higher education system is performing exceptionally well.
However, that is not the complete story. Our higher education
system also serves to regenerate existing wealth, status, and
privilege. I am convinced that without appropriate government support
and oversight, higher education will not, on its own, fully accomplish
its mission of advancing the public good.
Primary factors driving the low average postsecondary education
completion rate are the race and income-based inequalities built into
our system and the stratification and unequal distribution of resources
apparent within and between our postsecondary institutions. These
income- and race-based inequalities mean entire segments of our society
are being kept out of higher education based on factors independent of
desire and talent.
In order to ensure that institutions meet certain standards
regarding quality and capacity before they are deemed eligible under
Title IV for students to receive Federal financial aid the original
Higher Education Act (HEA) established the accountability triad. The
triad consists of three entities: accreditation agencies, the Federal
Government, and states. Accreditors use peer review as the foundation
of their effort to ensure that institutions meet a minimal level of
educational quality. The Federal Government has been primarily
concerned with consumer protection and consumer information. States
authorize institutions and also engage in critical program approval
functions; consumer information and protection functions; oversight and
regulatory actions; and in performance management, often in the form of
performance- or outcomes-based funding.
The triad has certainly helped higher education function better,
protected many students, and helped protect taxpayers' dollars.
However, in order for government to ensure that higher education in
the US is fully operating in the public interest, the triad must
function better and resources must flow to where they are needed most.
It is important to note that the participation of each member of the
triad allows institutions to receive a level of endorsement that may be
used by the institution to signal compliance and quality. Therefore,
each member must independently act as an evaluator of quality while
also working in cooperation with the other members of the triad.
Experience and research have shown that without clear and deliberate
action taken on behalf of underrepresented students, the system will
not, on its own, serve them appropriately. Better coordination and
partnership; more and better data and information, disaggregated by
income and race/ethnicity; and specific efforts to drive resources to
low-income students and students of color and the institutions that
serve them are needed.
______
The Chairman. Thank you, Dr. Tandberg.
Dr. Looney, welcome.
STATEMENT OF ADAM LOONEY, PH.D., JOSEPH A. PECHMAN DIRECTOR OF
THE CENTER ON REGULATION AND MARKETS, BROOKINGS INSTITUTE,
WASHINGTON, DC
Dr. Looney. Thank you. Chairman Alexander, Ranking Member
Murray, and Members of the Committee, thank you for the
opportunity to testify today.
While Federal loans and grants play a central role in
financing valuable investments in education. especially for low
and middle-income families, not all institutions or programs
lead to success. Lending money to someone to attend an
educational program with a demonstrated record of failure only
harms the student. Unpayable loan burdens not only cost
taxpayers, but they haunt borrowers for years. Poor student
outcomes are caused by low quality institutions and programs.
At any given college, students with low and high income
families have similar earnings and repayment outcomes. As a
result, colleges level the playing field across students with
different socio-economic backgrounds, often lifting all boats
but sometimes sinking them. While disadvantage students are
concentrated in a program with poor outcomes, the research is
clear about the direction of causality. The problem is with
schools not with the students. And so, when it provides
financial aid, the Federal Government has a responsibility to
students, to the families, and to taxpayers to direct those
resources to successful programs and to limit aid for poor
performing institutions. Accountability policies are an
inappropriate response to protect taxpayers investments in
students, to increase the economic value of this investments,
and to protect students from economic harm.
Federal accountability policies were effective in the past.
They remain familiar features of the educational policy
landscape today, but they are no longer effective because of
legislative and regulatory changes, because of expansions in
Federal aid that falls outside of the accountability framework
like increases in graduate lending, and because of the
unintended consequences of borrower protections, which by
helping students avoid default, have shielded our institutions
from accountability. Federal accountability policies should
focus on student outcomes, for instance in institutions'
repayment rate, how much a cohort of borrowers has repaid
several years after leaving school, would be a better indicator
of student success, institutional program quality, and a return
on Federal investments than the measures that we use now.
Early repayment outcomes are predictive of long-run
success. They are easy to understand. They are practical to
measure because successful loan repayment results from the
culmination of many incremental milestones, finishing a degree,
finding a job, earning enough to repay a loan, it summarizes in
a simple way a complex series of individual achievements. Their
banner rate conform the basis for the simple familiar systems
we have today like the court default rate rule or the gainful
employment rule, in which institutions or programs are assessed
relative to a threshold and lose eligibility if their
performance falls below a minimum level, or the repayment rate
could be used as the basis for risk sharing systems in which
institutions bare a portion of the financial consequences that
students and taxpayers face for poor outcomes.
In either case, the performance benchmarks and sanctions
must be sufficient to derive real change, and the rules should
apply broadly, including to graduate and parent borrowers.
Outcome-based accountability measures would complement other
Federal rules like the so-called 90-10 rule and other elements
of the accountability triad.
Congress and the public should see the data underlined
proposed for payment metrics to understand how they vary across
colleges or across demographic groups before they draw bright
lines, and we should consider how to improve accountability in
institutions that receive Federal funds but do not necessarily
participate in loan programs. But those unknowns pale in
importance to what we know is happening to students today. We
do students no service by subsidizing their attendance at
programs with demonstrated records of failure or by encouraging
them to take out Federal loans we know they cannot repay.
The evidence shows that policies that close poor quality
programs do not limit access to college, they only limit access
to poor quality colleges. Students move on to better schools,
and there are thousands of such institutions across the U.S.
that regularly propel low-income, disadvantaged students up the
income ladder. Redirecting Federal dollars to those
institutions would protect taxpayers and improve the outcomes
for those students.
Thank you.
[The prepared statement of Dr. Looney follows:]
prepared statement of adam looney
Chairman Alexander, Ranking Member Murray, and Members of the
Committee, thank you for the opportunity to testify today. My
testimony, based on my own research and that of others, emphasizes
several key conclusions.
Lending money to someone to attend a program with a demonstrated
record of failure is doing the student no favor. Unpayable loan burdens
not only cost the taxpayers (with little harm to the school), but they
haunt the borrower for years.
Poor student outcomes are caused by low-quality institutions and
programs. While disadvantaged students are concentrated in programs
with poor outcomes, the research is clear about the direction of
causality. The problem is the schools, not the students. Not all
institutions or programs lead to success.
When it provides financial aid, the Federal Government has a
responsibility--to students, to their families, and to taxpayers--to
direct those resources to successful programs and to sanction or limit
aid to poor-performing institutions and programs.
Accountability policies are an appropriate policy response to
protect the taxpayers' investments in students, increase the return on
human capital investments, and to protect students from economic harm.
Federal accountability policies were effective in the past. They remain
familiar features of educational policy landscape today. But they are
no longer effective.
Federal accountability policies should focus on student outcomes
after they separate from an institution or a program. For instance, an
institution's repayment rate--defined as the fraction of a cohort's
initial loan balance that is repaid within a period of time after
leaving school--would be a better indicator of student success,
institutional quality, and the return on Federal loan dollars than
default rate measures we use now.
Early repayment outcomes are predictive of long-run loan outcomes,
easy to understand, and practical to measure. Because successful loan
repayment results from the culmination of many incremental milestones--
degree completion, finding a job, earning enough to pay down the loan--
it summarizes in a simple way a complex series of successes.
The repayment rate could form the basis for simple, familiar
systems like the Cohort Default Rate rule or the Gainful Employment
rule, in which institutions are assessed relative to a threshold and
lose eligibility if their performance falls below a minimum level.
Alternatively, the repayment rate could be used as the basis for a
risk-sharing system, in which institutions bear a portion of the
financial consequences that students (and taxpayers) face from poor
outcomes. In either case, the performance benchmarks and sanctions must
be sufficient to drive real change, and the rules should apply to
graduate and parent borrowers, not just undergraduates.
Before adopting a new regime, we first need to solve several
unknowns and acknowledge potential short comings. Loan-outcome-based
systems don't necessarily provide accountability for institutions that
receive Federal funds but don't participate in loan programs. Congress
and the public should see the data underlying proposed repayment
metrics, to understand how they vary across colleges or demographic
groups, before drawing bright lines.
We are doing students no service by sending them to programs with a
demonstrated record of failure and need to start addressing it today.
Well designed rules would not impair access to college, but would shift
students away from failing schools toward better institutions. Federal
accountability policies are an appropriate policy response to protect
to taxpayers' investments and to protect students from economic harm.
The Consequences of Federal Aid and Existing Federal Accountability
Rules
Federal loans and grants play a central role in financing valuable
investments in education, especially for low- and middle-income
families. In the labor market, workers with bachelor's degrees
typically earn roughly $500,000 more over the course of their careers
than individuals with high school diplomas. Beyond the traditional BA,
many career-oriented programs offer degrees and certificates that boost
their students' job prospects. \1\
---------------------------------------------------------------------------
\1\ Council of Economic Advisers. 2016. ``Investing in Higher
Education: Benefits, Challenges, And The State of Student Debt.''
https://obamawhitehouse.archives.gov/sites/default/files/page/files/
20160718_cea_student_debt.pdf. Carnevale, A., S. Rose, and B. Cheah.
(2011). ``The College Payoff.'' https://cew.georgetown.edu/cew-reports/
the-college-payoff/.
College is therefore a key pathway to economic opportunity.
Children from the bottom fifth of the income distribution have a 41
percent chance of reaching the top two quintiles if they earn a college
degree, but only a 14 percent chance if they do not. \2\ Society as a
whole benefits, as well, when more people go to college--from better
health, lower crime rates, a more productive workforce, less dependence
on public benefits, and a more informed electorate.
---------------------------------------------------------------------------
\2\ Haskins, Ron. 2008. ``Education and Economic Mobility.''
Economic Mobility Project: An Initiative of The Pew Charitable Trusts.
The Pew Charitable Trusts, Philadelphia, PA. https://www.brookings.edu/
wp-content/uploads/2016/07/02_economic_mobility_sawhill_ch8.pdf.
The educational workhorses responsible for most of the upward
mobility of students are mid-tier, nonselective, and mostly public
institutions, rather than elite or selective schools. \3\ Indeed,
research identifies thousands of institutions across the U.S. that
regularly propel low-income, disadvantaged students up the income
ladder. Federal aid facilitates access to those institutions.
---------------------------------------------------------------------------
\3\ Chetty Raj, Friedman John N., Saez Emmanuel, Turner Nicholas,
Yagan Danny, ``Mobility Report Cards: The Role of Colleges in
Intergenerational Mobility,'' Stanford University Working Paper, 2017.
http://www.equality-of-opportunity.org/college/.
But not all institutions or programs lead to success. Too many
students enroll in programs that they can't or don't finish, that don't
lead to a job, or, that don't lead to a job that pays well enough to
justify the cost or loan burden incurred. These problems are salient in
the high rates of default among borrowers. Nearly 40 percent of
borrowers who left school in 2004 may default on their student loans by
2023. \4\ When student loan borrowers default--as nearly 1.2 million
direct loan borrowers did in 2016--the consequences are particularly
severe because of interest and collection costs, credit reporting, tax
refund offsets, wage garnishment, and ineligibility for future aid. \5\
---------------------------------------------------------------------------
\4\ Scott-Clayton, Judith (2018a). ``The looming student loan
default crisis is worse than we thought.'' Brookings Evidence Speaks
Reports, 2(34). https://www.brookings.edu/research/the-looming-student-
loan-default-crisis-is-worse-than-we-thought/.
\5\ U.S. Department of Education, Federal Student Aid (n.d.).
``Default Rates''. https://studentaid.ed.gov/sa/about/data-center/
student/default.
A larger economic problem is that many students leave educational
programs without having improved their earnings and employment
prospects, wasting time, effort, and financial resources that could
have been invested more productively. Many career-oriented programs
leave students worse off because students' earnings and employment
rates are lower than what they were prior to school entry, or their job
prospects were little changed but they now owe new loan burdens. \6\
Looking across the country's 671 cosmetology programs, for instance,
only six programs produced graduates whose earnings average more than
$20,000 a year; at one typical school, the program costs $17,700, only
29 percent of students graduate, the average student leaves with
$10,702 in debt, but earns an average of $12,487 after leaving school.
\7\ Most online programs don't appear to increase the earnings of
enrollees, despite enrolling millions of aid-dependent students over
the past several years. \8\ And other programs that do improve outcomes
sometimes still leave their students with debt burdens that exceed
their ability to pay back the loans. \9\
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\6\ Cellini, Stephanie Riegg and Nicholas Turner (2018).
``Gainfully Employed? Assessing the Employment and Earnings of For-
Profit College Students Using Administrative Data.'' The Journal of
Human Resources. http://jhr.uwpress.org/content/early/2018/01/31/
jhr.54.2.1016.8302R1.abstract.
\7\ Wessel, David. (2015). ``How to find out what graduates of
that cosmetology program actually make.'' Brookings Up Front Blog. The
Brookings Institution. https://www.brookings.edu/blog/up-front/2015/06/
25/how-to-find-out-what-graduates-of-that-cosmetology-program-actually-
make/.
\8\ Hoxby, Caroline. (2017). ``Online Postsecondary Education and
the Higher Education Tax Benefits: An Analysis with Implications for
Tax Administration.'' IRS-SOI Working Paper. https://www.irs.gov/pub/
irs-soi/17rppostsecondaryedtaxbenefits.pdf.
\9\ Looney, Adam, and Constantine Yannelis. 2018. Borrowers with
Large Balances: Rising Student Debt and Falling Repayment Rates.
Washington, DC: Brookings Institution. https://www.brookings.edu/wp-
content/uploads/2018/02/es_20180216_looneylargebalances.pdf.
The weight of those failures falls most heavily on the most
disadvantaged students. Pell Grant recipients comprise nearly 90
percent of students defaulting on undergraduate loans. \10\ Black BA
graduates default at five times the rate of white BA graduates. \11\
And low-income students disproportionately enroll at institutions whose
graduates struggle in the labor market and are unable to repay their
loans. \12\
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\10\ Miller, Ben. (2017). ``Who Are Student Loan Defaulters?'' The
Center for American Progress. https://www.americanprogress.org/issues/
education-postsecondary/reports/2017/12/14/444011/student-loan-
defaulters/.
\11\ Scott-Clayton, Judith (2018). ``The looming student loan
default crisis is worse than we thought.'' Brookings Evidence Speaks
Reports, 2(34). https://www.brookings.edu/research/the-looming-student-
loan-default-crisis-is-worse-than-we-thought/.
\12\ Chou, Tiffany, Adam Looney, and Tara Watson. 2017, February.
``Measuring Loan Outcomes at Postsecondary Institutions: Cohort
Repayment Rates as an Indicator of Student Success and Institutional
Accountability.'' Working Paper 23118, National Bureau of Economic
Research, Cambridge, MA. https://www.nber.org/papers/w23118.pdf.
Taxpayers are on the hook for the costs of loans that will never be
repaid and for grants squandered on educational opportunities that
don't pay off. Aid recipients give up opportunities for higher income
by enrolling in programs they can't finish or that don't lead to a good
job, hurting them and weakening our economy. In some cases, the only
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winners are the schools.
Lending money to someone to attend a program with a demonstrated
record of failure is doing the student no favor. Defaults not only cost
the taxpayers (with little harm to the school), but they harm the
borrower for years.
The Role and Responsibilities of Institutions and Institutional
Accountability Policies
Poor student outcomes are caused by low-quality institutions and
programs. While disadvantaged students are concentrated in programs
with poor outcomes, the research is clear about the direction of
causality.
The problem is the schools, not the students. At any given college,
students from low- and high-income families have very similar earnings
and repayment outcomes, even at institutions without selective
admissions. \13\ As a result, colleges level the playing field across
students with different socioeconomic backgrounds--often lifting all
boats, but sometimes sinking them. \14\ The outcomes of students at
different institutions reflect the quality of the school not just the
backgrounds of their students. \15\ Systematic differences in outcomes
across schools can be observed in default rates, loan repayment rates,
post-college earnings, or callback rates of job applicants. \16\
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\13\ Chou, Tiffany, Adam Looney, and Tara Watson. (2017).
\14\ Chetty Raj, Friedman John N., Saez Emmanuel, Turner Nicholas,
Yagan Danny. (2017).
\15\ Goodman, Joshua, Michael Hurwitz, and Jonathan Smith. 2015,
February. ``College Access, Initial College Choice and Degree
Completion.'' Working Paper 20996, National Bureau of Economic
Research, Cambridge, MA. https://scholar.harvard.edu/files/
joshuagoodman/files/jole_preprint.pdf Hoxby, Caroline. (2015).
``Computing the Value-Added of American Postsecondary Institutions.''
IRS-SOI Working Paper. https://www.irs.gov/pub/irs-soi/
15rpcompvalueaddpostsecondary.pdf.
\16\ Deming, David J., Noam Yuchtman, Amira Abulafi, Claudia
Goldin, and Lawrence F. Katz (2016). ``The Value of Postsecondary
Credentials in the Labor Market: An Experimental Study.'' American
Economic Review. 106(3): 778-806. https://scholar.harvard.edu/files/
ddeming/files/dyagk_audit_final_aer.pdf. Darolia, Rajeev, Cory Koedel,
Paco Martorell, Katie Wilson, and Francisco Perez-Arce (2014). ``Do
Employers Prefer Workers Who Attend For-Profit Colleges? Evidence from
a Field Experiment.'' Rand Working Paper. https://www.rand.org/pubs/
working_papers/WR1054.html.
The Federal Government has a responsibility--to students, to their
families, and to taxpayers--to sanction or limit aid to poor-performing
institutions and programs, and to direct resources to successful
programs. To do otherwise is wasteful and unprincipled. Such
accountability policies are an appropriate policy response to protect
the taxpayers' investments in students, increase the return on human
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capital investments, and to protect students from economic harm.
Accountability policies were effective in the past. After a crisis
in the student loan market in the 1980's, rigorous institutional
accountability measures implemented in the early 1990's drove default
rates down to the single digits. \17\ The imposition of the Cohort
Default Rate regulations exposed 1,200 institutions to sanctions,
causing the official cohort default rate to plunge from 21.4 percent in
1989 to 10.4 percent in 1995 and 5.6 percent in 1999. Enrollment
shifted to better-performing programs, students borrowed less, and
default rates declined. \18\ More recently, while no programs were
sanctioned under the Gainful Employment rule, some institutions closed
poor performing programs or changed academic guidelines in anticipation
of their effect. Of 767 failing programs, 500 (65 percent) are now
closed. About half of those are because the institution itself closed,
but more than 200 were selectively closed or changed by their
institutions.
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\17\ Looney, Adam and Constantine Yannelis (forthcoming). ``The
Consequences of Student Loan Credit Expansions: Evidence from Three
Decades of Default Cycles.'' https://www.dropbox.com/s/3b80t5b7v5bbdq7/
Credit_Expansion.pdf?dl=0.
\18\ http://econweb.umd.edu/turner/
Cellini_Darolia_Turner_Crowdout.pdf.
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Gaps and Weaknesses in the Current Accountability System
But our current accountability system is no longer effective. After
enacting effective measures in the early 1990's, Congress subsequently
defanged key accountability provisions, like the 85/15 rule, which
limited the share of revenues that a for-profit institution could
receive from Federal aid programs to 85 percent, and distance learning
rules, which prohibited institutions from enrolling more than 50
percent of students in distance (or online) programs. The Gainful
Employment rule and other regulations are being eliminated by the
current administration. Congress expanded Federal aid eligibility and
the amount of aid to new markets, like exclusively online education,
and through new or expanded aid programs like graduate and parent PLUS
and new GI Bill benefits that fall outside of the oversight of existing
accountability systems. \19\ Congress also enacted important borrower
protections like forbearances, deferments, and income-based repayment
plans, which helped struggling students avoid default, but which had
the unfortunate unintended consequence of shielding the institutions
they attended from accountability under the Cohort Default Rate rules,
which bars schools with high default rates from Federal aid
eligibility. At many institutions, borrowers still default at high
rates, but only after the three-year testing period has ended. \20\ As
more borrowers enroll in income-based plans, default rates will fall--
and that's a good thing. But it also means that the Cohort Default Rate
rule is increasingly obsolete.
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\19\ Looney, Adam and Constantine Yannelis (forthcoming).
\20\ Miller, Ben. (2018). ``How You Can See Your College's Long-
Term Default Rate.'' The Center for American Progress. https://
www.americanprogress.org/issues/education-postsecondary/news/2018/08/
30/457296/can-see-colleges-long-term-default-rate/.
One consequence of the erosion in Federal accountability and recent
expansions in aid eligibility is the entry and expansion of low-
quality, high-risk institutions, mostly in the for-profit sector, and
disproportionately targeting older, non-traditional undergraduate
students. A majority of the increase in default rates since 2000
resulted from Federal policies that expanded aid to institutions that
would not be eligible previously. \21\ In contrast, student borrowers
who attended so-called traditional programs--full-year, full-time
undergraduate degree-seeking students at long-established brick-and-
mortar public and private non-profit colleges--accumulate modest levels
of debt, succeed in the job market, and rarely struggle with their
loans. \22\
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\21\ Looney, Adam and Constantine Yannelis (forthcoming).
\22\ Looney, Adam and Constantine Yannelis (2015). ``A Crisis in
Student Loans? How Changes in the Characteristics of Borrowers and in
the Institutions They Attended Contributed to Rising Loan Defaults.''
Brookings Papers on Economic Activity. https://www.brookings.edu/
bpeaarticles/-crisis-in-student-loans-how-changes-in-the-
characteristics-of-borrowers-and-in-theinstitutions-they-attended-
contributed-to-rising-loan-defaults/. Dynarski, Sue. (2016). ``Five
Myths about Student Loans.'' https://drive.google.com/file/d/
0B749nZ2pTgGpTE44NllKRFBxT0U/view.
Today's problems also arise from gaps in oversight in other areas
of the student loan program--particularly loans to graduate students
and to parents of college students. Graduate-school and parent
borrowers are exempt from outcome-based accountability rules, like the
Cohort Default Rate rules. Such loans now represent more than 45
percent of all new student loan volume. \23\ Almost all borrowers with
the cripplingly large loan balances highlighted in the media are either
graduate student or parent borrowers. \24\ While default rates were
historically low in these groups, loan performance is deteriorating.
---------------------------------------------------------------------------
\23\ Looney, Adam (2017.) ``The student loan crisis: A look at the
data.'' The Brookings Institution. https://www.brookings.edu/research/
the-student-loan-crisis-a-look-at-the-data/.
\24\ Looney, Adam, and Constantine Yannelis. (2018).
Graduate students' average annual borrowing amount has almost
doubled over the past 30 years, more than 20 percent of graduate
borrowers entering repayment in 2014 owed more than $100,000, up from 8
percent in 2000. While borrowers with such large balances are rare,
they account for a growing share of all student loans; the 5.5 percent
of all borrowers who owe more than $100,000, owe a third of all student
loan debt. While those borrowers rarely default, when they do financial
consequences for students and taxpayers are outsized. Borrowers owing
more than $50,000 accounted for almost 30 percent of all dollars in
default, but only about 17 percent of student borrowers in 2014. Unlike
associate or bachelor's degree students, graduate students pursuing
masters, professional or doctoral degrees can take out Federal loans
for the entire cost of tuition, fees, books, and living expenses; the
college itself decides those costs. Institutions have taken the bait:
The University of Pennsylvania offers a master's in ``Applied Positive
Psychology''--a course with no prerequisites where applications are
accepted from anyone with a minimum 3.0 grade point average--for
$66,000; Columbia University offers a $64,595 online engineering
degree, and tuition for USC's online master of social work degree is
$107,484--the same as the on-campus version. \25\ Few institutions
could charge such large amounts or attract students to pay it without
uncapped Federal aid.
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\25\ Carey, Kevin. (2019). ``The Creeping Capitalist Takeover of
Higher Education.'' Highline, The Huffington Post. https://
www.huffpost.com/highline/article/capitalist-takeover-college/.
Enrollment trends suggest new risks in graduate lending. In 1990 1
percent of active graduate borrowers attended for-profit schools. By
2014, the for-profit share of graduate students had increased to 17
percent. Among graduate student borrowers who leave school owing more
than $50,000, the for-profit share increased from 3 percent to 21
percent. Just as for undergraduate education, institutional quality
matters, and the variation in graduate borrower outcomes across
institutions is just as large as the variation in undergraduate
outcomes, suggesting that not all graduate schools or programs lead to
successful careers and successful loan repayment. \26\
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\26\ Lee, Vivien and Adam Looney. (2018). ``Headwinds for graduate
student borrowers: Rising balances and slowing repayment rates.'' The
Brookings Institution Report. https://www.brookings.edu/research/
headwinds-for-graduate-student-borrowers-rising-balances-and-slowing-
repayment-rates/.
For parent borrowers, the story is similar. The average annual
borrowing amount for parent borrowers has more than tripled over the
last 25 years, from $5,200 per year in 1990 (adjusted for inflation) to
$16,100 in 2014. Because of increasing borrowing amounts, more parents
owe very large balances: 8.8 percent of parent borrowers entering
repayment on their last loan in 2014 owed more $100,000, compared to
just 0.4 percent in 2000. Parent default rates have increased and
repayment rates have also slowed. Repayment rates have declined with
increases in borrowing at for-profit institutions and at minority-
serving institutions. Parent borrowers' repayment outcomes vary widely
across institutions that students attend, and repayment rates at the
worst-performing institutions are alarmingly slow. \27\ It's not
surprising that some parent borrowers struggle; PLUS loans are offered
without regard to parents' ability to pay and in uncapped amounts.
According to data from the Federal Reserve Bank of New York, the
cumulative 8 year default rate among the least credit worthy parent
PLUS borrowers exceeds 30 percent. Among Pell-eligible students, 8
percent of their parents take out PLUS loans. \28\ For the hundreds of
thousands of low-income borrowers in these circumstances, the result is
near certain financial catastrophe. Because parent borrowers are
generally ineligible for the borrower protections and income-based loan
plans available to student borrowers, the consequences are severe,
especially when borrowers default. In those cases, Federal authorities
are required to garnish wages and Social Security benefits and
confiscate tax refunds--a particular burden on low- and middle-income
families. In 2017, the Treasury offset $2.8 billion, mostly in tax
refunds, for delinquent student-loan debtors including both students
and parents.
---------------------------------------------------------------------------
\27\ Lee, Vivien and Adam Looney. (2018). ``Parents are borrowing
more and more to send their kids to college--and many are struggling to
repay.'' The Brookings Institution Report. https://www.brookings.edu/
research/parents-are-borrowing-more-and-more-to-send-their-kids-to-
college-and-many-are-struggling-to-repay/.
\28\ Fishman, Rachel. (2014). ``The Parent Trap. Parent PLUS Loans
and Intergenerational Borrowing.'' New America Education Policy
Program. https://static.newamerica.org/attachments/748-the-parent-trap/
Corrected-20140110-ParentTrap.pdf.
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How to Improve Federal Accountability Policies
All these problems are solvable. Federal accountability policies
that focus on student outcomes, encourage success, and sanction
institutions and programs that systematically fail their students would
improve students' labor-market and financial outcomes, reduce the
burden on taxpayers, and retain access to high-quality programs for
low-income students.
An institution's repayment rate--defined as the fraction of a
cohort's initial loan balance that is repaid within a period of time
after leaving school--would be a better indicator of student success,
institutional quality, and the return on Federal loan dollars than
default-based measures we use now. The repayment rate is practical to
measure because the Department of Educational already collects and
retains most of the necessary data to measure loan repayment at the
institution or program level. The repayment rate is difficult to for
institutions to game or manipulate. The repayment rate bears a direct
relationship to the Federal costs of a loan. And the success students
have repaying their loan is a good indicator of their own employment
success and of the value of the program, especially when a rising share
of students are enrolled in income-based repayment plans. Because
successful loan repayment results from the culmination of incremental
achievements from completing a valuable degree, finding a job, and
earning enough to pay down the loan, it summarizes in a simple way a
complex set of inputs.
Early-stage repayment outcomes are highly predictive of long-run
loan outcomes. Nearly more than 90 percent of loans that are performing
early on will still be performing at Year 15. Similarly, loans that are
not being paid down after 3 or 5 years are unlikely to be performing at
Year 15. And it's likely that the value of the measured repayment rate
could be improved by accounting for in-school or military deferments,
or by incorporating anticipated forgiveness under teacher or public
sector loan forgiveness programs.
Repayment rates (measured as the percent of a cohort's balance
repaid) are closely related to other institutional outcomes of
interest. The cohort repayment rate is strongly correlated with
existing institutional metrics, including historical default rates,
measures of repayment rate used in the College Scorecard, measures of
loan burdens like debt-to-earnings ratios, and other outcomes like
completion rates, post-college employment and earnings, and the
earnings of low-income students. (Note, measures like whether a
borrower is simply enrolled in or in good standing in an income-driven
plan is not a good indicator of economic success.)
As more students enroll in income-based repayment plans, in which
borrowers pay a fixed fraction of their discretionary earnings each
month, repayment rates will more closely reflect fundamental economic
outcomes like employment, earnings, and accumulated debt burdens. As a
result, repayment rates will be a stronger indicator of post-college
success and more closely related to debt-to-earnings ratios used as the
basis for the Gainful Employment rules.
The repayment rate could form the basis of a range of practical
accountability systems. First, it could be used as the basis for simple
systems like the Cohort Default Rate rules or the Gainful Employment
rules, in which institutions are assessed relative to a threshold or
benchmark on a specified outcome metric (e.g., the default rate, the
debt-to-earnings ratio, or the repayment rate), and lose eligibility if
their performance falls below a minimum level of quality. Such a system
could be applied at the institution level, like the Cohort Default Rate
Rules, or at the program level with an institutional backstop, as in
Gainful Employment. (Because some students separate before selecting a
program and because institutions would have incentives to manipulate
enrollment in failing programs, an institution-level repayment rate as
a backstop is necessary.) The performance benchmark matters, and a lax
standard would not encourage institutions to improve student outcomes.
Consider the existing Cohort Default Rate system. Only 10 institutions
were in danger of failing the standard in 2014; for most schools the
rules were irrelevant. \29\ To be effective, the repayment rate
benchmark should be applied at a level that corresponds indicates real
success and which requires institutions to quickly shutter failing
programs.
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\29\ Department of Education. (2019). ``Official Cohort Default
Rates for Schools.'' https://www2.ed.gov/offices/OSFAP/
defaultmanagement/cdr.html.
Students not in school or in the military should already be making
progress repaying their loans three or five years after leaving school.
---------------------------------------------------------------------------
If they're not, we should not send new students down the same path.
The repayment rate could also be used as the basis for a broader
risk-sharing system, in which institutions bear a portion of the
financial consequences that students (and taxpayers) face from poor
outcomes. In broad terms, risk-sharing proposals identify socially
valuable outcomes--as measured by loan repayment or post-college
employment--and set targets for schools. If an institution's students
fall below target, financial penalties proportional to the failure
apply. Some plans would utilize carrots as well as sticks: revenues
collected from failing schools would be used to finance bonuses for
institutions that exceeded the target. For instance, the funds could be
used to provide extra grant support to schools that have a superior
record of outcomes for low-income students. \30\ If institutions were
financially liable to reimburse taxpayers for a sizable portion of
their students' unpaid loan balances, institutions would have stronger
incentives to maximize the long-term financial outcomes of their
students.
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\30\ Looney, Adam and Tara Watson (2018). ``Sharing the Risk:
Forcing colleges to assume part of the default tab would motivate
schools to better inspire success.'' The Milken Review. http://
www.milkenreview.org/articles/sharing-the-risk. Chou, Tiffany, Adam
Looney and Tara Watson. (2017). ``A Risk-Sharing Proposal for Student
Loans.'' The Hamilton Project Policy Proposal 2017-04, The Brookings
Institution. https://www.brookings.edu/wp-content/uploads/2017/04/
es_20170426_risk_sharing_proposal_student_loans_pp_chou_looney_watson.pd
f.
Such accountability systems could be expanded to incorporate other
outcome measures, particularly outcomes associated with financial aid
recipients not taking Federal loans, who might otherwise be excluded
from accountability oversight. For instance, one could incorporate
outcomes like post? enrollment labor market outcomes or cumulative
financial costs. More elaborate systems could provide accountability
over grant-funded students and more precisely target low-performing
institutions. But they would be more complicated to administer and
comply with, and some outcome measures, like educational outcomes or
completion, would be harder to administer and easy to manipulate
---------------------------------------------------------------------------
relative to market-based outcomes.
Outcome-based institutional accountability could continue to
operate alongside other elements of our existing system, such as an
improved 90/10 rule.
To be sure, before adopting a new regime, we first need to solve
several unknowns and acknowledge potential short comings. Loan-outcome-
based systems don't necessarily provide accountability for institutions
that receive Title IV funds but don't participate in loan programs. We
need more data and more transparency on student loan outcomes, to
understand the properties of repayment metrics, how they vary across
colleges, how they would be affected by adjustments for in school or
military deferments or for rising enrollment in income-based plans, and
how they would affect different demographic groups. Congress and the
public should see those data before drawing bright lines. The analysis
of a new accountability system should also take into account other
features of the current system or other reforms undertaken in HEA
reauthorization to forestall unintended consequences or costs. For
instance, we should consider incorporating credit for public sector or
teacher loan forgiveness programs, so that the loan relief policymakers
intend to provide to students also benefit the programs or institutions
that lead to public service. We should consider the impact of increased
participation in income-based plans on loan outcomes. And it's
important that the Congressional Budget Office get the scoring right:
Federal loan programs are not uniform monoliths but are comprised of
thousands of different institutions and programs with widely varying
costs or surpluses depending on the quality and cost of the program and
the success borrowers repaying loans after enrollment. Reforms that
eliminate poor outcomes should produce substantial budget savings.
Stronger Accountability is Needed Today
A reinvigorated accountability system would have many benefits.
Federal oversight and accountability systems have a successful track
record of improving student outcomes and reducing waste in Federal aid
programs. \31\
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\31\ Cellini, Stephanie Riegg, Rajeev Darolia, and Lesley Turner
(2016). ``Where do Students Go When For-Profit Colleges Lose Federal
Aid?'' NBER Working Paper 22967. http://econweb.umd.edu/turner/
Cellini_Darolia_Turner_Crowdout.pdf. Looney, Adam and Constantine
Yannelis (forthcoming). Whitman, David (2017). ``Truman, Eisenhower,
and the First GI Bill Scandal.'' The Century Foundation. https://
tcf.org/content/report/truman-eisenhower-first-gi-bill-scandal/.
Whitman, David (2017b). ``Vietnam Vets and a New Student Loan Program
Bring New College Scams.'' The Century Foundation. https://tcf.org/
content/report/vietnam-vets-new-student-loanprogram-bring?-new-college-
scams/.
Shifting aid eligibility away from the worst-performing
institutions and programs to better ones will increase the average
earnings and employment of students, and reduce the debt burden of
students. For instance, the Department of Education estimated that the
gainful employment rule would lead to lifetime earnings gains between
$11 billion and $36 billion, as programs improve quality and students
transfer to better performing programs. \32\
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\32\ Office of Postsecondary Education, Department of Education.
Program Integrity: Gainful Employment. 03/25/2014 (79 FR 16632).
https://www.Federalregister.gov/documents/2014/03/25/2014?06000/
program-integrity-gainful-employment.
As programs close or admissions criteria change, an important
concern is that some students could lose access to certain programs.
First, lending money to students to attend a program with a
demonstrated record of failure does them no service. Second, the
evidence suggests that students in sanctioned schools do not lose
access to college. Rather, students respond to sanctions by moving on
and attending other, better institutions. We need not ask students to
choose between going to college and taking out a loan that they would
be unable to repay. During the 1990's, when colleges lost access to
Federal student aid due to cohort default rate regulations, enrollment
losses in sanctioned institutions were entirely offset by enrollment
gains in local public institutions. \33\
---------------------------------------------------------------------------
\33\ Cellini, Stephanie Riegg, Rajeev Darolia, and Lesley Turner
(2016).
Today, there are many institutions that offer admission to most or
all candidates that lead to good earnings outcomes; many of these serve
substantial numbers of low-income students. At ``average'' American
colleges--the ones ranked in the middle (between the 40th and 60th
percentiles) based on the post-enrollment earnings of their students in
the College Scorecard, 26 percent of student borrowers come from low-
income families. Compared to the lowest-ranked 10 percent of schools,
low-income borrowers in this middle-opportunity range are 70 percent
more likely to earn more than $25,000 a year, four times as likely to
achieve earnings of $50,000 or more, likely to be making progress
repaying their loans. And almost all institutions in this middle range
admit more than 75 percent of applicants or are open enrollment. \34\
Redirecting Federal dollars to those institutions that offer economic
mobility to their low-income students would improve student outcomes
and protect taxpayers. A well-designed accountability system for
Federal aid would do just that.
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\34\ Chou, Tiffany, Adam Looney, and Tara Watson. (2017).
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______
The Chairman. Thank you very much.
Dr. McMillan Cottom, welcome.
STATEMENT OF TRESSIE MCMILLAN COTTOM, PH.D., ASSISTANT
PROFESSOR OF SOCIOLOGY, VIRGINIA COMMONWEALTH UNIVERSITY (VCU),
RICHMOND, VA
Dr. McMillan Cottom. Thank you. Good morning, Chairman
Alexander, Ranking Member Murray, Members of the Committee,
including my own Senator. Thank you for the opportunity to
address you here today.
I have spent the last 12 to 15 years of my life thinking
about, talking about researching and working with students
enrolled in the for-profit college sector. And of all of that
experience with academic and lived, I have one major take away,
and that is that demand for fast, flexible credentials, like
those for-profit colleges specialize in, is really about
millions of people who despite doing everything right cannot
find dignified work that affords them housing, the means to
educate their children, and the ability to care for their aging
parents because their economic anxiety is so great.
The students I worked with and researched will shoulder
almost any cost in dollars and in opportunity for a chance at
better quality work. I have worked at two different for-profit
colleges. I enrolled hundreds of students. I was very good at
my job in part because the students looked so much like me.
They were not there to see me about a cosmetology license or a
master's degree in IT because we offered the best programs.
They were there because they did not have or could not afford
child care. They were there because after years in the service,
employers suddenly wanted a credential instead of work
experience. They were there because working a job with
inconsistent schedules made them feel poor in a society that
scapegoats poor people. The urgent pain funnel approach at for-
profit colleges worked. I worked it, because for some of
becoming a student is a one-way ticket out of low expectations,
poverty, and social exclusion. And ideally we would regulate
the pain funnel and promote social policy that ends the pain it
funnels.
When I asked my research respondents to explain in their
own words how they feel about their for-profit colleges, they
tell me time and time again that if their schools were so bad,
``the Government would not pay for it.'' Student loans have
become a measure of institutional quality. For a sector that
absorbs so much student loan money, for-profit college students
are vulnerable to thinking that high cost is high quality, and
regulation needs tools for institutional differentiation if the
regulation is to matter at all to quality and student outcomes.
Three such protections of note are part of the PROTECT
Students Act that would better clarify the definitions of
nonprofit and public institutions, that would afford the
Federal Government the ability to offer robust review processes
when for-profit colleges attempt to convert to nonprofit or
public colleges, and which strengthen and expand the incentive
compensation band. Non-profit colleges have a strict statutory
requirement whereby no part of their net earnings may inure to
the benefit of any private shareholder or individual. They must
be organized exclusively for charitable purposes and any
surpluses must be reinvested back in the institution and
students. That difference matters.
This kind of transparency about differentiation is
especially crucial for students who do not have the cultural
resources for successful college going. Data show that many
students do not even know they attend a for-profit college. And
whether we think it should matter to their outcomes, the labor
market treats those students differently because they have
attended a for-profit college. Our accountability triad then
must adopt clear definitions of difference because those
institutional differences already exists and are already
impacting millions of students. Each actor of that triad must
also recognize and respond to new forms of for-profit colleges,
including those that convert to nonprofits while contracting
with for-profit colleges as a provider. Without strict
regulation, these new forms of for-profit institutions and
partnerships can denigrate the integrity of higher education.
Finally, when their institution fails them, whether by
misrepresenting the legality of their degree program or when
fiduciary mismanagement puts them out of business, the students
I interviewed do not blame their for-profit college. These
students blame the very idea of higher education. For millions
of people now, a for-profit college is now their only
experience of any college.
If college becomes conflated with a scam in the minds of
our most vulnerable students, it will be difficult to reorient
them to future education or training and that difference I
believe matters.
Thank you.
[The prepared statement of Dr. McMillan Cottom follows:]
prepared statement of tressie mcmillan cottom
Thank you for the opportunity to address you today. Demand for
fast, flexible credentials like those for-profit colleges specialize in
is really about millions of people who, despite doing everything right,
cannot find dignified work that affords them housing, the means to
educate their children and the ability to care for their aging parents.
Because their economic anxiety is so great, the students I worked with
and research will shoulder almost any cost, in dollars and opportunity,
for a chance at better quality work.
I have worked at two different for-profit colleges. I enrolled
hundreds of students. I was very good at my job, in part because so
many of these colleges' ideal students looks like me. They were not
there to see me about a cosmetology license or a master's degree in IT
because we offered the best programs. They were there because they did
not have or could not afford childcare. They were there because after
years in the service, employers wanted a credential instead of work
experience. They were there because working a job with inconsistent
schedules made them feel poor in a society that scapegoats poor people.
The urgent ``pain funnel'' approach at for-profit colleges works
because, for some of us, becoming a student is a one-way ticket out of
low expectations, poverty, and social exclusion. Ideally, we would
regulate the pain funnel and promote social policy that ends the pain
it funnels.
When I asked my research respondents to explain, in their own
words, how they feel about their for-profit colleges, they tell me time
and time again that if their schools were so bad, ``the government
would not pay for it''. Student loans have become a measure of
institutional quality. For a sector that absorbs so much student loan
money, for-profit college students are vulnerable to thinking high-cost
IS high quality. Regulation needs tools for institutional
differentiation if the regulation is to matter at all to quality and
student outcomes.
Three such protections of note are part of Senators Hassan and
Durbin's PROTECT Students Act that would better clarify the definitions
of ``nonprofit'' and ``public'' institutions, for the Federal
Government to have a robust review process when for-profit colleges
attempt to convert to nonprofit or public colleges, and to strengthen
and expand the incentive compensation ban. Nonprofit colleges have a
strict statutory requirement whereby ``no part of net earnings [may]
inure to the benefit of any private shareholder or individual,'' they
must be organized exclusively for charitable purposes, and any
surpluses must be reinvested back into the institution and students.
The difference matters.
This kind of transparency about differentiation is especially
crucial for students who do not have cultural resources for successful
college-going. Data show that many students do not know they attend a
for-profit college and whether we think it should matter, the labor
market treats them differently because they have. Our accountability
triad must adopt clear definitions of difference because those
differences have already impacted millions of students. Each actor of
that triad must also recognize and respond to new forms of for-profit
colleges, including those convert to non-profits while contracting with
the for-profit college as a provider of academic and recruiting
services and for-profits that join in revenue share agreements with
not-for-profits. Without strict regulation, these new forms of for-
profit institutions and partnerships can denigrate the integrity of
higher education.
Finally, when their institution fails them--whether by
misrepresenting the legality of their degree program or when fiduciary
mismanagement puts them out of business--the students I interview do
not blame their for-profit college. These students blame the very idea
of higher education. For millions of people, a for-profit college is
now their ONLY experience of any college. If college becomes conflated
with a ``scam'' in the minds of our most vulnerable students, it will
be difficult to re-orient them to future education or training.
______
The Chairman. Thank you very much. Thanks to the four of
you. We will now have five minute round of questions. Now I ask
Senators to just keep the questions and answers within five
minutes please. Dr. Wheelan, when I was Education Secretary in
1992, Congress made some significant changes to the Higher
Education Act. I want to ask you about two provisions in it.
One is the student achievement standards, pretty simple, gives
you that responsibility as an accreditor on the colleges that
you accredit. It has been a part of the law since 1992.
Do you think we ought to be fed up? Do you think we ought
to be more specific? Will that help in assuring educational
outcomes for the institutions? And second, did Congress give
your agency and other accreditors jobs to do in the accrediting
process that take away from the time that you could spend on
educational quality?
Dr. Wheelan. Thank you for your question, Senator. Beefing
up standards, the adage the devil is in the details is what
concerns me. I think as long as accreditors working with
institutions can determine what those achievement levels are
then we are fine. When we start determining outside the higher
education system and are not sure what all goes into it,
looking at IPEDS, for example, having only first time, full-
time students there is a lot that goes into it. Hunger of
students, family life of students, keeps them often times from
graduating on time. So, when we are starting to look at
graduation rates. when the Feds start identifying a specific
number, it gets a little murky because I do not think all the
circumstances. So, I would like for us to keep that as an
accreditation----
The Chairman. Well I guess what I am thinking more about
is, is there any way we should or could say to you and other
accreditors, we are really concerned about educational
outcomes. We want to make sure that college is worth it. Can we
say anything to you in language other than two words, student
achievement, that sends that signal? And can we reduce some
other duties that we have imposed on you so that you can spend
more time on educational outcome?
Dr. Wheelan. I think those two words have resounded
largely. For the 46 years I have been in higher Ed, we have
been focusing on access, and now we understand the need to
focus on student success, and so when we are looking at student
achievement, all of our institutions have identified a plethora
of potential outcomes, not just graduation rates, but moving
from developmental into college level courses, for example, as
a possible outcome. So no, I think that those two words are
sufficient. If there is anything that you could take away from
us, I think giving us some relief on the substance of changes
regulations, for example, some of those requirements get in the
way of us participating with our institutions that really need
some help. Otherwise, I feel we have the flexibility.
The Chairman. Senator Murray talked about risk-based
accreditation. Do you have the flexibility to spend more time,
say, on a for-profit college that might be in trouble and less
time on Harvard?
Dr. Wheelan. Harvard is not my institution, but yes----
The Chairman. Well, let us say Emory.
Dr. Wheelan. Emory. Yes, we do. We already have that
flexibility and we are already utilizing it.
The Chairman. Do you do that?
Dr. Wheelan. We do. We have put in--I put in what we call
the small college initiative to identify institutions with
2,000 full-time equivalent students or fewer to help them
individually look at our requirements and what is required,
giving them best practices of other institutions so that they
know that.
The Chairman. But what about institutions that persistently
seem to have quality trouble as compared to institutions which
persistently are considered not to be in trouble from a quality
point of view. Can you spend a lot less time on the latter and
more time on the former?
Dr. Wheelan. I do not know that we have to. We are already
addressing the needs of those particular institutions. We have
lost fewer institutions and we have--when you look at our
outcomes, for example, when a committee initially goes in to
review an institution, there may be as many as 40 non-
compliance issues, but because of the continuous improvement
process even through reaffirmation, they are down to like 12 by
the time they get to the Board for action.
The Chairman. But still, you feel you have the
flexibility----
Dr. Wheelan. Yes, we do.
The Chairman [continuing]. To spend less time on Vanderbilt
and more time on for-profit schools with trouble?
Dr. Wheelan. Yes. I think it is already there for us.
The Chairman. Dr. Looney, I only have 40 seconds, but can
you summarize whether you think low-income students would be
hurt or helped if we measured whether students are actually
paying back their loans as a way to hold schools accountable?
Dr. Looney. Well, I think we do low income borrowers no
service by sending them to programs with demonstrated records
of failure, where they cannot repay their loans. I think if we
used measures of repayment, that would provide a stronger
signal of how they are faring after they leave school, is more
reflective of whether they get a job and their earnings. So, I
think it would be better. And the historical evidence is that
when we close low quality programs, students do not lose access
to college, they lose access to low quality schools and they
move on to stronger and better institutions.
The Chairman. In your testimony you said, measuring whether
students are actually repaying their loans is a more accurate
measurement than the cohort default rate?
Dr. Looney. I think today there are many people who are not
paying their loans, but not defaulting.
The Chairman. Right.
Dr. Looney. Programs like income based repayment. So, I
think that there is a stronger signal from whether people are
repaying their loans in the amounts that they repay.
The Chairman. And that signal would help low-income
students rather than hurt them by giving a signal to them that
that is a place they might be careful about.
Dr. Looney. The institutions with better repayment rates
have stronger student outcomes and we should use that as the
basis for our accountability systems.
The Chairman. Thank you.
Senator Murray.
Senator Murray. Thank you, Mr. Chairman. First, I would
like to submit the following testimony from Thomas Corvette for
the record.
The Chairman. So, ordered.
Senator Murray. Thank you. Thank you all for your testimony
today. Dr. Tandberg let me start with you. Thank you for your
focus on protecting and strengthening the higher education
triad between Federal Government, states, and accrediting
agencies.
In your testimony you described a fair amount of variation
in authorization procedures across states. I agree procedures
for state authorization should be oriented toward quality
assurance, improvement, and consumer protection, including for
online programs that enroll students across many different
states in the United States.
Can you elaborate for us on what actions Congress should
take in reauthorizing HEA to strengthen the role of states in
evaluating quality and providing adequate oversight,
particularly for the online programs?
Dr. Tandberg. Thank you for your question. There does exist
significant variation between the states when it comes to state
authorization, and personally I feel that there are some
baseline items that ought to be looked at when states are
looking to authorize or reauthorize an institution, and that
means a focus on quality outcomes, do the institutions have the
resources to meet those outcomes, are there sufficient consumer
protections built into the requirements that the states have
for the institutions and that the institutions have themselves,
that there is resources for students and the like.
I think that the Federal Government could encourage such
items. I think it is a conversation that is way past due. It is
a conversation that ought to engage accreditors also. One thing
came out of the recent negotiated rulemaking, where I was a
member of the negotiating committee, is that SHEEO, my
organization, committed to convene NC-SARA, ACE, authorizers
consumer protection organizations, to look at how we can do a
better job in our authorization of distance education programs.
NC-SARA certainly has come under criticism from certain
quarters.
I think that criticism was heard. It was definitely
amplified through the negotiated rulemaking process, and so we
are committed to coming up with new ways of ensuring that we
protect students that are in distance education programs, and
that they have appropriate recourse when those programs fail.
Senator Murray. Okay. Thank you for that.
The Chairman. Maybe you say what NC-SARA is, so we know
what we are talking about.
Senator Murray. I was going to say, higher education uses
more alphabet soup than anybody else and you are part of that,
so I am just going to tell you.
[Laughter.]
Dr. Tandberg. It is so easy to slip into that alphabet
soup, and I apologize. NC-SARA is the organization that
developed, once it became required that a distance education
program be authorized by every state where a student is
located, and so it is a reciprocity agreement where if an
institution meets the requirements of a state authorizer in the
requirements of NC-SARA, then that institution is authorized in
every other state that participates, which is currently 49
states.
Senator Murray. All right. Okay, Dr. Looney thank you. I
really appreciated your testimony on the historical
effectiveness of higher education accountability policies, and
I also appreciated your comments that an outcome-based
institutional accountability system could continue to operate
alongside other elements of our existing system like an
improved 90-10 rule.
Your testimony highlights the need for institution level
measures in a Federal accountability system, particularly how
any program level accountability metric must have an
institutional backstop. Can you elaborate for us on the
incentives institutions might face to manipulate metrics have
done only at a program level?
Dr. Looney. Sure, so I think as you said that there is an
intuitive appeal to doing it at the program level, but I think
you would have to have an institutional backstop. For instance,
students who are not enrolled in a program, or who have not
completed a program, might not be captured by a program level
metric. That is what happened with the gainful employment rule.
Alternatively, you do not want to have a system where you try
to measure outcomes at the program level and institutions close
their drama program and open a theater program. And you can
have a system where no programs fail but many students fail.
I think there is an intuitive appeal to have and use a
program level measure for instance for completers, but then
also to have a catch-all institutional backstop, which would
make sure that schools are not gaming the rules for instance,
or that non-completers were being incorporated into the
outcomes.
Senator Murray. Okay. And can you just elaborate on your
comment that policymakers should better understand repayment
rate data before drawing bright lines?
Dr. Looney. Sure. I mean having participate in the college
score card, I think, that when you open up a new data base for
the first time and you design new metrics for the first time,
it is important to see how they affect different groups, as a
general rule. When it comes to repayment rates in particular,
this is a changing time in terms of how students repay their
loans.
For instance, we have new income-based repayment plans. We
have public sector loan forgiveness, and so I would want to
examine how policies like that affect repayment rates. Just to
give an example, I think that it would--I would be concerned
that some institutions might have low repayment rates but were
providing a good quality education, but you might not see that
because their students were still enrolled in graduate
education or participating in public sector service or had been
historically in the wrong repayment plan.
I think you want to make sure that you were measuring
things right, and that the repayment rates that you used going
forward were the ones that were designed appropriately.
Senator Murray. Okay, thank you. Thank you very much, Mr.
Chairman.
The Chairman. Thank you, Senator Murray.
Senator Braun.
Senator Braun. Thank you, Mr. Chairman. In the State of
Indiana, I was on the Education committee as a state rep for
one year. But the 3 years I spent there and was on a school
board 10 years prior to that, spent half an hour to 45 minutes
with a President Daniels at Purdue here a few weeks ago. The
biggest thing we grappled with there is the fact that through
our 4 year institutions, publicly supported and in total, we
ship out twice as many degrees as we use within the State of
Indiana. We have 80,000 jobs roughly. I think we have got 80 or
so in my own company, 800 in my county that need one, two-year
degrees or maybe a better high school curriculum. The other
thing I want to point out is that I think for most families
across the Nation, health care and education are the two most
important things. Ironically, those are also the two things
that are going up most in cost per year.
I think post-secondary education just claimed the notoriety
of eclipsing, the cost of health care. Poor outcomes, which
were mentioned earlier, high costs, wanting to have the
accountability to hold all that doing in general. I want to
focus on, and I will ask Dr. Wheelan this question. When it
comes to the amount of effort, accountability and so forth that
is being put into four-year degrees across the country, and for
one of the reasons of bringing the cost down and maybe, I know
in our state, guidance counselors and this whole effort of
getting people directed into the right program, is probably the
thing we are doing most poorly.
Would love to hear your opinion on kind of how CTEs, one,
two-year degrees, even better high school curriculums, are we
paying enough attention there and giving it the accountability
and the accreditation, it needs for almost all the jobs we have
unfilled that would actually pay more starting and through
career wages than almost half of the degrees that we are
generating that we do not even use in our state.
Dr. Wheelan. Thank you for your question, Senator. Thanks
to the 28 years at community colleges, I can say, of course,
definitely. We just got a grant from Lumina foundation in my
region to look at credentialing, and how many of our
institutions are actually taking industry-based credentials and
applying them to college degrees. And I think you are finding
more and more of that every day.
All of our colleges and institutions--colleges and
universities understand the need to get people into the
workforce but we want them to be able to do more than just turn
a widget. We want them to be able to give a presentation
orally. We want them to be able to work independently, to
analyze things.
Those general education requirements going into that, that
is one of the downsides of traditional one year programs, and
so now faculty are working across the institution. There is a
novel concept that teaching English and Math in a CTE course
can work, and it does. And I think we are seeing more and more
the importance of that, institutions working toward that.
Senator Braun. Any other panelist want to comment on it?
[No response.]
Senator Braun. Good enough. And I just want to emphasize
again, for most of us and I think Indiana is probably not
sitting there by itself, and when I spoke up about this very
issue as a member of the Education committee, my brother was
the Department of Workforce Development Director and had to
match high demand, high-wage jobs with the marketplace. I made
that point that we overemphasize four-year degrees, creating a
lot of degrees that are not marketable and I really wish we
paid more attention to that because it lowers costs and
actually produces more degrees that we, as employers, need.
Dr. Wheelan. I think even the dual enrollment programs are
growing in the CTE areas as well because institutions on the
college side are understanding the significance of getting
people in the workforce.
Dr. Tandberg. One comment I will make on that, which I
really appreciate the points that you brought up. It is
something that we pay quite a bit of attention to at SHEEO, and
one project that were involved in is helping states match their
student level data systems to their workforce data systems, the
data systems that would have been managed by your brother. And
in doing that, we can look at things like employment outcomes
by degree program and ensure that all of them are leading to
outcomes that would benefit their students going forward after
they graduate.
In particular we need to pay attention to those shorter-
term programs like certificates and short-term certificates.
Many of those will lead to wage outcomes that are better than
longer term ones. But others are no better than a high-school
diploma and those are ones we ought to be really concerned
about because students go into debt even for short-term
programs, and if there is no payoff, then we ought to be
looking to direct them to more rewarding programs.
Senator Braun. Good point. Thank you.
The Chairman. Thank you, Senator Braun.
Senator Murphy.
Senator Murphy. Thank you very much, Mr. Chairman. Senator
Braun, to your point, this idea of four-year degrees, is an
arbitrary number, 120 credits. We made this decision that we
have stuck with 100 years that you need to go to college for
this number of hours, for these many years in order to get that
degree, and employers tell us that they want skills, right.
They want people who are ready to work and that comes in a
variety of forms and manners.
I think you are on the right track. And I think that this
conversation about holding colleges to a standard of
performance is all about stimulating the kind of innovation
that we so badly, desperately need in higher education, because
there seems to me to be a trade that if you have a nationwide
standard where we are expecting everybody to deliver student
outcomes where folks can get a job and be able to pay back
their loans, then maybe, we can take the pressure off of
schools in the ways that we micromanage them about how they
deliver those degrees. And so, I think there is a real
opportunity here to recognize what we have not been testing as
a means to provide some more innovation.
The honest, assessment of the current accountability system
is that we are really not holding schools accountable for
performance. I love our accreditors but, less than 1 percent of
schools lose their accreditation on an annual basis, despite
the fact that you have $400 million dollars going out to
schools that have loan default, cohort rates of 30 to 40
percent. We similarly only sanctioned less than 1 percent of
schools under Title IV. And so, there is a tiny percentage of
schools that are ultimately feeling real heat on performance
and a vast over-regulation of schools and lots of other
factors.
We frankly have not even talked about one of the most
important regulators here and that is U.S. News and World
Report. I spent way more time talking to my college presidents
about how they are going to move up the rankings on U.S. News &
World Report than I spend talking to them about how they are
going to, pass their next accreditors' test. So, we have a lot
of stuff that we ask schools to do and we could simplify our
accountability system, focus on performance for everybody, and
I think that would end up stimulating a lot of innovation.
I would argue that we should still keep some additional
heat on the for-profits, but that does not have to be mutually
exclusive from a higher standard for everybody else. Dr.
Tandberg let me put that question to you. I guess to see what
you think about this idea that if you had a stronger sense that
schools really had to meet a performance standard that was much
more meaningful than what we have today, and that was applied
across the board, do you think that would be a means to try to
get at what Senator Braun's is talking about? It would give us
a little bit more confidence that innovation can be protected
and channeled in the right way?
Dr. Tandberg. I mean you are hitting at just such an
important issue, and there is certainly a lot of debate out
there in regards to what you are talking about. I certainly
agree that there are better metrics. The repayment rate
absolutely would perform in accomplishing the goals that you
outlined much better than the default rate. My concern is this.
The experience at the state level with performance funding,
right, is that if there isn't explicit attention to
underrepresented students, students of color and low-income
students, an accountability program will most likely hurt them.
Senator Murphy. Correct.
Dr. Tandberg. Okay. And so, in anything that the Federal
Government does, specific and explicit accounting for those
students must be included. And you can go beyond higher
education in the history of our country. If we are not explicit
about under-represented, under-resourced individuals, they get
hurt.
Senator Murphy. Totally agree. You have got to have some
filter here to make sure that you do not get adverse
consequences. I want to fit in one last question for you, Dr.
Wheelan. And that is just to push back a little bit on this
idea that we should leave accountability to a conversation
between accreditors and the institutions themselves. You
testified that currently you require institutions to identify
at least one student completion indicator. I would have loved
as a student if I got to determine how I was graded because I
would just come up with ways in which I could get the highest
grade.
Why should we leave it up to schools to determine how
completion or performance is assessed? Why shouldn't we have
one metric that is National in scope so that students can
compare apples to apples and understand that the schools
themselves may ultimately not be the best judges of their own
performance?
Dr. Wheelan. Yes, I think that identification----
The Chairman. I want you to take the time you need to
answer that question. That is an important question.
Dr. Wheelan. Thank you. The metric of student achievement
is the metric--the level of that performance is what I am
concerned about because all institutions are not the same. All
student body are not the same. If I put in a 40 percent
graduation rate right now as the baseline for all of my
institutions, half of my institutions would not be accredited.
And they would lose membership and we would not be educating
anybody in those career and technical programs you talked
about, because many of those students take forever to graduate
and it is just not accounted for when you look at that.
These programs that are one-year, two-year programs often
will take two, three, and four years because students are going
part-time. So, I am concerned that if you put in that bright
line of a 40 percent, you are going to hurt the very
institutions that you are trying to keep in business to educate
students who go into the workforce.
Senator Murphy. An important distinction you are making.
Thank you very much.
The Chairman. Thank you very much, Senator Murphy.
Senator Cassidy.
Senator Cassidy. Thank you all. By the way, thank you to
the Chairman and the Ranking Member because we have had several
hearings over the last three or four years on college
affordability. This is the latest but thank you for that. A big
issue and you all have addressed it forth rightly.
That said, let me first speak to a bill called the College
Transparency Act, which Senators Cassidy, Scott, Warren,
Whitehouse, and 15 other bipartisan Senators as well as a
bipartisan group of House members have introduced that will
leverage existing data on student outcomes providing students,
parents, and policymakers with the information necessary to
make important decisions about post-secondary education. And I
would also like to point out that we have 160 organizations
that are supporting this. I ask unanimous consent to introduce
this into the record.
The Chairman. So, ordered.
[The following information can be found on page 62 in
Additional Material]
Senator Cassidy. I think it addresses several of the things
that we have here. First Dr. Wheelan, fellow LSU Tiger so, good
to have you here----
Dr. Wheelan. Thank you.
Senator Cassidy. Of course, if I had any merits to give
you, I would get them all.
[Laughter.]
Dr. Wheelan. Thank you.
Senator Cassidy. But one thing that we do with our--
something you just said. One thing we do with our College
Transparency Act is we follow kids across institutions.
Somebody once pointed out President Obama started at one place,
ended up at Yale. The first place would have been deemed for
not having a graduate because he went on to Yale. That is
clearly unfair. So that said, we do address that in the College
Transparency Act. Dr. Looney, yes or question. Are you related
to Joe Don?
Dr. Looney. No.
Senator Cassidy. Joe Don--for people who do not know, Joe
Don was considered the most un-coachable NFL player ever.
[Laughter.]
Senator Cassidy. He is a legend in the NFL and so. That
said, in the College Transparency Act, what we do is--a way to
describe it, if someone looks in the mirror, whatever he or she
looks like, they would get information both on the program in
which they enroll and the institution in general as to
graduation rates, loan rates, and the amount of income-after-
they-graduate rate. And as I mentioned, it would track across
institutions.
Now it seems like this would be, if you will, a fourth
triad fourth, a fourth member--it would be a quatrad of
accountability because it would not be the student able to look
in the mirror and they look on the web to see whether or not
she or he would do well at a certain program at a certain
school. Any first thoughts about that?
Dr. Looney. Thank you, Senator. So, first of all I think
that kind of product is something that we do need. I think
there is too little information that students have without
their likelihood of success in different institutions. We try
to provide some of that in the college scorecard, but it is
certainly something that could be improved. I also think that
the matching problem or the assessment of what programs I
should look, or what schools I should look at is an important
one we spend too little time on.
Now, I do think that there are programs and institutions
that provide opportunity to everybody and that more students
should enroll in those programs, but I think people end up
making poor choices, sometimes because they are not informed of
what the basic options are.
Senator Cassidy. This is better informed? Dr. McMillan
Cottom, I thought what you pointed out was very significant.
That someone who is lower-income may end up going to a place
that wouldn't best serve their need, but I do know in Doctor--I
noted in Dr. Looney, maybe Dr. Tandberg's testimony, the
statement that it is not the student, it is the institution.
And if the lower-income students goes to the right school, then
she or he ends up in the same place as a higher income student
in terms of future income.
Again, going to our College Transparency Act where somebody
looks in the mirror, whatever I look like, this is my success
rate at this institution. Again, your thoughts as to how that
would address that which you spoke of lower income students
being misinformed regarding their best opportunity for
advancement.
Dr. McMillan Cottom. Yes, thank you very much for the
questioning and it is a very good one that gets at several of
the complexities of what we try to do when we try to use higher
education to improve social mobility for the students who have
the least amount of social mobility which many of us have
continued to sort of put forth here as a critical concern and
interest of any public investment in higher education.
The problem--the complicated issue with information is that
it is both a good thing and it is not a sufficient thing. And
so, my experience of working with students as they try to
choose among what institution to attend in a highly
differentiated field of higher education that is only
differentiating further is that there is only so much that
information symmetry can do to overcome this sort of practical
constraints----
Senator Cassidy. Now we should not let perfect be the enemy
of the good----
Dr. McMillan Cottom. No. I would not think that. No,
absolutely not. It should not be the enemy of the good, but it
should also have its context, which is to say that there is a
great deal that information symmetry can do. But for example,
knowing about the default rates or the repayment rates of a
student will not always tell us the complexities of why some
students have a harder time repaying as opposed to others. For
example, it is harder for us to parse out labor market
discrimination, etc., that gets wrapped up in one's ability to
repay. And we have those same sort of problems with information
overall.
It is wonderful to have program level information. It is
even better to have information about what your experience
might be at a school, but it is critical that information be
pegged to the types of student characteristics that the student
is bringing to the institution.
Senator Cassidy. CTA does that. I yield back. Thank you.
The Chairman. Thanks, Senator Cassidy. Senator Kaine is
next but he has deferred to Senator Warren.
[Laughter.]
Senator Kaine. Well I will find some--we were Alphonse and
Gaston over here, so we are trading back and forth. Thank you.
Senator Warren. That is right.
The Chairman. Senator Kaine.
Senator Kaine. Dr. McMillan Cottom, in your opening
comments, you talked about the weaknesses of the Higher Ed
system are often driven by, and I am using a quote from your
written testimony, ``the millions of people who despite doing
everything right, cannot find dignified work that affords them
housing, the means to educate their children, the ability to
care for their aging parents. Because their economic anxiety is
so great, the students I worked with and research will shoulder
almost any cost, in dollars and opportunity, for a chance at
better quality work.''
This is a hearing that is about sort of accountability and
ways to protect students and taxpayers but that comment
actually goes much broader and is were rewriting The Higher
Education Act we ought to be looking much broader. We ought to
be looking at the way to reauthorize Higher Ed knowing that we
might not do it again for another decade that will really,
provide pathways for all kinds of students, especially
underrepresented students or adult workers who need to come
back to get additional skills to find that kind of dignified
work.
I am interested if you would want to offer broader thoughts
to the Committee about the way we should approach the HA
reauthorization to get at that root problem that you described.
Dr. McMillan Cottom. Absolutely. I think that there are a
couple of things. I think accountability in any point in time
has to account for the higher education system that we have
presently, right, and ideally will also take into account the
changes that are happening so that we are regulating for the
system we have and the one that seems to be emerging. And the
importance of doing so is most important for the students that
we need institutions to be most accountable to. That is just
the takeaway.
The accountability questions while there are interesting
aspects of it, for example, about mismatches between the types
of credentials being provided and the labor market needs, that
is really embedded in a larger question about whether or not
students can afford to take on the risk of attending certain
types of institutions. And that risk does change based on who
the students are and what type of institutions they attend. And
that risk-based assessment is probably more important now than
it has been previously because the institutional field has
become so complicated.
When it becomes complicated, the reality for students is
that they are not often choosing between comparable programs.
They are choosing amongst the programs that will one, accept
them, and two, the ones that will fit into their complicated
lives, that will allow them to both work and to go to school,
to do childcare and to go to school, and those practical
choices can override the intent of other forms of
accountability.
Ideally what that accountability would do, it would
encourage sort of greater public interest in whether or not
those institutions are suitably high-quality enough. So that
looks like revisiting the 90-10 rule, in my opinion, to
reconsider how much wider investment there should be in
different kinds of institutions. If an institution is not good
enough for the sort of open marketplace of students to choose
that when they have other choices, then it probably is not good
enough for the students who only have that one choice.
Encouraging greater investment in those institutions as one
of the sort of indirect measures of quality is one of those
measures of accountability that doesn't directly fall under
sort of accreditation or under state guidance but is one of the
ways I think that the Federal Government can signal what we
should be considering when we think about accountability. And
then I also think that it continues to be important for us to
signal what the definitions of institutions mean when there are
increasingly more types of institutions.
The students who are making difficult choices are also
making them quickly and they are making them urgently, whether
the process forces them to or not. It is the urgency of their
circumstances, and so when they have a clear language to make a
comparison among institutions, that can only benefit the
students who need that sort of benefit the most. And so those
are the kinds of things that I would hope accountability in The
Higher Education Reauthorization Act would think about. What
kind of higher education ecosystem we have currently.
Senator Kaine. Thank you for that. Let me ask the entire
panel and this might have come up when I was at the Foreign
Relations committee meeting, but should we be adjusting the 90-
10 rule with respect to veterans? I run into veterans all the
time who I think are very poorly served by predatory marketing
practices to take courses in for-profit colleges and then they
often find--I just was talking to a veteran at a farmers'
market. Actually, not a veteran. A member the Virginia reserves
just returned from Afghanistan two Saturdays ago and he was
telling me his story of woe about using GI bill benefits at a
for-profit college that went belly up.
Now he is at another for-profit college, and the warning
signs are going off in my head as I am hearing him tell these
stories. The fact that the 90-10 rule does not include VA, a GI
bill or veterans' educational benefits in the calculation is
something that I think leads them to really target vets. Should
we make an adjustment to that rule?
Dr. Looney. I mean so an observation is when we changed the
85-15 rule to the 90-10 rule in the late 90's that led to a
surge enrollment at schools that had previously been bound by
the rule. Something like a million more additional borrowers
and several hundred thousand new defaults as a result. And then
after the expansion of GI Bill benefits, which reduced the
stringency of that rule even further, there was even larger
enrollment in those programs. And so, I think that rule had
historically protected taxpayers and students in those
circumstances and it has a sound theoretical rationale and
practical purpose.
Senator Kaine. Thank you. I am over my time. Thank you, Mr.
Chairman.
The Chairman. Thank you, Senator Kaine.
Senator Warren.
Senator Warren. Thank you, Mr. Chairman. Dr. McMillan
Cottom, you have written extensively about the rise in for-
profit colleges and what that rise says about the economy,
about the labor market, and about racial and economic
inequality. For example, we know that students at for-profit
colleges tend to be lower income. They are more likely to be
women. They are more likely to be people of color.
Now you hear that and that would suggest that for-profit
colleges have done a fantastic job of targeting these
populations and making money off the structural inequalities in
our society. So, let me ask the question this way, from your
research and from your time working in for-profit colleges,
have you seen any evidence that for-profit colleges broadly
reduce inequality or help women or help people of color get
ahead in our economy and build wealth?
Dr. McMillan Cottom. Thank you very much for that question.
It is the question that goes at the heart of everything that I
do, so thank you Senator Warren. I would say to you that if
that were the case, I would not have spent my last 15 years
writing about the for-profit college sector, right. It would
have been doing this thing that I think higher education
opportunity and the opportunity structure is supposed to do,
which is to increase access but access for a higher purpose
which is eventual persistence and completion and mobility.
If there is any dimension, I mean, there is a level of
disaggregation of the data where you can always show that there
is a person--and I think it is important for us to note is that
there are people, individuals, who get a credential and it ends
up furthering for example their teaching job, etc. but we don't
measure educational outcomes in that way for a very good reason
when we talk about inequality. We tend to talk about groups of
people because that does matter for the effectiveness of how we
target our social policy interventions.
At that level, the only thing from my understanding of all
of the data and all of my research that for-profit colleges
have ever innovated is access. It is enrollment, right. None of
that innovation has trickled out to, on any measure that I am
aware of, program quality or any of the other student outcome
levels that we care about. And so, if the point was only to
expand access to college then perhaps but that was never the
intent of access. Access is always supposed to serve the
greater good of completion and mobility.
By that measure, for-profit colleges have done a
particularly bad job of doing that for the students who needed
that opportunity the most. I would say women and women of color
in particularly are damaged by that.
Senator Warren. Thank you. You have also written about what
turbocharge, the rapid growth of for-profit over the past
couple of decades, wall street, that wall street investors and
shareholders are always on the prowl for the next moneymaker
realized that for-profit colleges were a gold mine because in
our system of weak accountability, which Dr. Looney was
referring to just a minute ago, as long as they kept enrolling
more and more students, especially low-income students, more
and more Federal Aid dollars would flow straight in their
pockets.
Since for-profit colleges are by definition the only
colleges allowed to make gobs of money that can be pulled out
of the school and distributed the owners, to shareholders, and
to wall street investors without strong Federal accountability,
what market incentives do for-profits have to deliver a high-
quality education at a low price?
Dr. McMillan Cottom. At a low price. Well----
[Laughter.]
Dr. McMillan Cottom. You did complicate the question,
Senator Warren. So, there is a market incentive to be fair,
that students can vote with your feet, is what we say. That if
students do not get a good education that they can just not
enroll and that is supposed to be the market feedback loop.
That again takes for granted that those students have other
choices. So, one thing that I have learned is that poor
students and women and women of color have gotten the message.
We have done a wonderful job of the last 25 years of a
public messaging campaign that says that everyone needs to go
to college. That everyone needs some post-secondary education.
It has been extremely successful. What has been less successful
is that we have not met the success of that message with a
plethora of high-quality institutional choices for all
students. And so, in the gap, what happens is that the market
takes advantage of the fact that our messaging takes care of a
lot of the quality branding problems for higher education for
for-profit colleges, and so that students voting with the feet
option is not nearly as practical as perhaps we would like for
it to be.
Other than the student voting with your feet, the market
does not have many incentives to offer for keeping cost low
because the point is to maximize of course the difference
between the cost of instruction and the price of tuition, and
so there are not many.
Senator Warren. I appreciate that. I just want to say, Mr.
Chairman, I really worry that we have got this entirely
backward. We tell people, especially women, low-income people,
people of color, that the only way to get ahead is a college
diploma. We watch accreditors rubber-stamp the schools that are
giving out these degrees. We pour billions of dollars in
Federal money into those schools no matter how poorly they
educate their students. And then we let wall street get in on
the gravy train by raking in the cash from these outfits.
We ultimately ask for money back with interest not from
colleges, not from the employers, but from the students with no
regard to whether or not they got a return on their investment.
And that just seems fundamentally wrong to me. Thank you.
The Chairman. Thank you, Senator Warren.
Senator Smith.
Senator Smith. Thank you, Chairman Alexander and Ranking
Member Murray, and Chairman Alexander I want to say that I
really--the reauthorization of the higher education bill I
think is some of the most important work that I know I will be
able to be involved in this year. And the focus today on
accountability along with the work that we need to do around
access and affordability, and also the great hearing we had
just last week around campus safety, I think all of those
together are just very important work.
Much on my mind right now is a situation that we had in
Minnesota, which has just been devastating to people, which is
the collapse, the nationwide collapse of Argosy University. A
thousand students in Minnesota who the lights just went out and
I just want to take a moment to read a little bit of an email
from a woman who sent a message to me that kind of dramatizes
this, she says, her name is Sarah, she says, I have worked very
hard for the last seven years to take my doctorate. She was
getting a Clinical Psychology Ph.D., I was a single mother on
welfare, working part-time, and attending school full-time
during my undergraduate education. I had a 65 to 85 hour week
between school and work, that she was, processing. During my
masters, I worked full-time and took my master's at the time
and had to graduate quicker. I entered my program bright-eyed
and bushy-tailed because this was the final chapter of my
education.
She worked to get a 4.0 last semester, and then for no
fault of her own, the school disappears, literally. It
disappears, and as you said, Dr. McMillan Cottom, she was doing
what people told her to do which was to build a better life for
herself and her family by pursuing a higher education. So, my
question is, does our accountability system do enough to
protect students from institutions like this that are at high
risk of closing so abruptly?
Dr. McMillan Cottom. I mean the simple question is
certainly not as well as I wish that we did. I have spent the
last couple of months also doing research by following students
as they go through a failed school, and I am talking to
students and administrators in communities very much like your
own, Senator Smith.
It is really a message, I think, for us about being very
careful about how we talk about how easy it should be to close
a school. We absolutely want strong accountability to hold
schools to account and there are some institutions where the
risk is just so high that we may want to consider a form of
accountability that makes it impossible for them to prey upon
students but as some of the fellow witnesses have stated,
accreditation and accountability, if it gets it right, has good
institutions who are doing good work for students, stay in
business to do it better and to improve but to stay in
business, precisely because of the cases that we see of the
failed for-profit colleges. It is a test case of what happens
to students, and to administrators, and to communities when
schools fail. And there is an economic cost of that failure.
They have taken on a student loan debt but they have also taken
on extreme opportunity cost. I have the students who changed
their work schedules and change their child care schedules to
allow them to be in school, and those things cannot be
recouped.
The consequences of not being able to recoup those expenses
are not equally borne. For some people, staying enrolled in
school is how they stay qualified for means-tested child
subsidy, for example, and you cannot just go and enroll in
school the next week when your school closed last week. So,
what do you do for child care in the meantime. I have these
women who say to me, how am I supposed to pay for my child care
when I count I now can't meet my student enrollment criteria to
keep my child subsidies.
The consequences are not just economic, they are
opportunity cost, but they are also deep emotional and mental
cost of the time and investment that someone has invested
institution. When higher education institutions are held
accountable, they should be fundamentally stable because a
stable higher education institution is one that our most
vulnerable students can rely on and can count on to be there
when they need them.
Senator Smith. You are saying that the issue of
accountability is not only at the back end, but it is all the
way through.
Dr. McMillan Cottom. Correct.
Senator Smith. Because you want to make sure that these
schools are held accountable. So, what, and I am almost out of
time but I really--to understand like what that accountability
would look like for these institutions that just frankly have a
different organizational structure than community and technical
college or, a public university. How do we, get that
accountability built in all the way through the process?
Dr. Looney. Can I make one observation is that Argosy had a
negative repayment rate for 5 years so students after leaving
school owed more for several years afterwards than they did
when they left. And I think it was accredited until the day it
closed, might still be accredited.
Senator Smith. Right.
Dr. Looney. It seems like on many fronts there was a
failure of accountability in that case.
Senator Smith. Dr. Tandberg. I know I am out of time.
Dr. Tandberg. May I? Okay. One thing that I think often
that happens in the Federal policy world is that it is easy to
think that the Federal policy world is the universe of the
policy world and when it comes to our public institutions, the
much bigger player is our states.
Around our community college there is a huge regulatory,
policy, accountability framework umbrella over them that just
doesn't exist for the for-profit institutions, and so we often
think about well should this Federal policy apply to the
community colleges, and maybe but the fact of the matter is on
a day-to-day basis there is direct interaction with our
community colleges and our public institutions where we ensure
that they are acting in the best interest of students.
That does not exist at all in the same way when it comes to
our for-profit institutions and that is where states, we need
to look at what we can do different, but it makes sense for
special attention to be paid from the Federal level to the for-
profit institutions because counting everything, they operate
in a much freer regulatory space than any other public
institutions do because of the state action.
Senator Smith. Thank you very much. Thank you, Chairman.
The Chairman. Thank you, Senator Smith.
Senator Hassan.
Senator Hassan. Well thank you, Mr. Chairman and Ranking
Member Murray for having this hearing. And thank you to all the
witnesses for being here. As we work to reauthorize The Higher
Education Act it is really important that we expand consumer
protections for students and ensure that all higher education
institutions work to expand student and improve outcomes.
Higher education has always been one of the greatest entry
points to the middle class and economic success, and as I think
all of you have touched on, it is our job to make sure that
promise does not slip away. So that is why I introduced the
PROTECT Students Act with Senator Durbin. This bill would
provide basic consumer protections for students and strengthen
Federal oversight of the for-profit higher-education sector, a
sector that has had problems time and again with its abuse of
taxpayer dollars, dollars that are intended to support
students. So, a couple of questions for you, Dr. McMillan
Cottom given your experience and research in this area.
Something that has been of grave concern to me is the
increasing number of for-profit higher education institutions
converting to not-for-profit status. The current process for
for-profit institutions to convert to not-for-profit status is
applied inconsistently and often leaves converted institutions
looking much like a for-profit in their business model even
though they are now calling themselves not-for-profit. One of
the first steps in the conversion process is for the IRS to
sign off on an institution's tax filing status but this
determination by the IRS does not take into account student
outcomes.
Under Secretary DeVos, the Department has largely relied on
the IRS's determination and an institution's nonprofit tax
status to allow these converted institutions to be treated as
nonprofits for their Title IV financial aid eligibility under
The Higher Education Act. This process allows some of these so-
called not-for-profit institutions to continue to function with
for-profit business models such as having board members who
continue to profit from a remaining for-profit entity that
spun-off before the conversion process. This current process
does not consider the most important factor, how these
institutions actually treat their students. That is why the
PROTECT Students Act sets out a formal conversion process and
requires institutions that have converted to a not-for-profit
status to receive the same heightened oversight associated with
their for profit status for a period of five years.
Doctor, can you speak to why additional oversight to the
conversion process is so important, and why Federal
distinctions between public, non-profit, and private, for-
profit colleges are so important?
Dr. McMillan Cottom. Absolutely and I think it builds on
actually on David's point earlier which is that one of the
things that states certainly look to the Federal Government to
do is to provide guidance on how they should relate to
institutions differently. And one of the best things I think
that comes out of the PROTECT Act, I think, is it would provide
that necessary guidance. It would provide a framework for us to
talk about these institutions differently and to make
meaningful comparisons among them, which is something that we
are currently missing.
It also does that compensatory factor of sort of stepping
in and filling some of the role, as again, of the variation
across states of the very end jobs that states do in regulating
their oversight of for-profit college sector. It also does
something I think very important which is to codify language
that can then be used by students and by advocacy groups who
advocate for students as they make different choices among
institutions. Students do rely on whatever the sort of formal
documents are that are handed to them and says this is what
this school is.
The IRS designation does not go far enough in explaining
what those differences mean qualitatively for the student
experience. The biggest one being how much is going to be
invested in your actual education and what kind of
institutional support you will have once you leave the
institution whether it is through graduation or through
withdrawal. And it also does not account for the fact that
there is a perception gap and a difference that will affect you
once you enter the labor market. The not-for-profit IRS status
cannot account for that and so it is not providing the
necessary regulatory muscle behind the language. And so, the
PROTECT Act would go, I think, significantly further to do that
and it is important.
Senator Hassan. Well, thank you. I also just want to touch
on one other aspect of your testimony and I only have about 30
seconds, but you spoke about the desperation many prospective
students you work with when you were an admissions counselor at
a for-profit institution, and how that desperation can lend
itself to vulnerability when individuals are deciding whether
to pursue a certain degree or program that makes promises about
their future earnings, potential, and economic mobility.
In an attempt to ensure that prospective students receive
accurate information during admissions and student advising,
Congress put in place the incentive compensation band, which
would, for example, prevent admission counselors from getting a
bonus for enrolling students, a pay structure that has resulted
in predatory behavior called the pain funnel that you
referenced. Can you explain your experience with predatory
admissions practices and how expanding the incentive
compensation band to other student services and employees with
third-party contractors would better protect students and
taxpayers' best interest?
Dr. McMillan Cottom. Absolutely. I do think it is
important.
The Chairman. We are out of time.
Senator Hassan. I am sorry. That is my fault. I will
follow-up.
The Chairman. No, that is all right. Go on and please
answer the question but you might want to submit a longer
answer in writing.
Dr. McMillan Cottom. Thank you. Absolutely. Thank you. I
think I can still do longer answers in writing. Thank you.
Still a Professor. Yes, I think--so the answer, yes, to your
question is that I do think it is important by the way across
the entire structure of the institution for there to be an
incentive band.
I think that it is probably most important for institutions
that are going through the conversion as they are moving from
one sort of culture of admission and matriculation to another.
And so, in my experience, that looks like this. The incentives
whether they were direct and monetary or indirect, by the way
which we do not always capture, which is in promotion and
elevation in the workplace, look like this. It is the Vice
President who told me on the second week of my job at the for-
profit technical college----
The Chairman. We are running out of time. Could you wrap up
the answer please.
Dr. McMillan Cottom. ----that we are salespeople, we are
not counselors. It changes the whole relationship. Thank you.
Senator Hassan. Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Rosen.
Senator Rosen. Thank you so much for being here. For the
work that you do in helping to protect our students who really
appreciate it. I would like to follow-up on both Senator
Kaine's question on veterans and Senator Smith's questions on
accountability because one of my top priorities since coming to
Congress has been to increase opportunities for our student
veterans.
I am so concerned about our for-profit schools that have
targeted veterans and obviously provided them, in many cases,
little in return. Since the original passage of the GI Bill,
numerous for-profit institutions have preyed upon our student
veterans, and like we have seen here, many shutting down, just
leaving veterans with--holding the bag. So, this impacts my
state directly. Nevada is home to almost 5,500 student
veterans. We have a large veteran population there, and our
public and non-profit universities thankfully have a really
high accountability standard and offer great resources to our
veterans, but some have not lived up to the standards.
One of the students, we get emails all the time. One Las
Vegas student has sent us an email that said, I am now on my
sixth year of schooling, full-time. I still have not received
my degree. I have never failed or dropped a class and I
maintain a 3.55-3.75 GPA. This for-profit school they were in
stole 2 years of their life. So, my question is this, is what
standardized tools do you think we should be applying? You
talked about them at community colleges across the board to all
colleges to ensure that schools are held accountable,
especially for our veterans and military students. Any?
Dr. Tandberg. One thing that is variable across the states
is the extent to which they engage in a reauthorization process
or can revoke authorization. That is something that I think,
from the state perspective, we ought to consider implementing
in all states. And that is one way. We often hear that, why
don't accreditors close down schools? Well, they actually do
not. They cannot. They are not a Government entity. They cannot
do that. States can. We can't. And that is something that we
are working on at SHEEO is reevaluating the reauthorization
processes and procedures so that we can suggest some best
practices in that regard.
Senator Rosen. Well to follow-up with that, now that ACICS
has been reinstated as an accreditor, but can the Department of
Education, do you think, do to ensure that our veterans'
information is not targeted and sold false promises in the same
ways that they have for this student that wrote to me? Anyone?
Dr. McMillan Cottom. I would--I thought I would want to
speak most directly to the accreditation issue. I would say
this. I would say that there is nothing that has not been
proposed here today that when we say would benefit most the
most vulnerable students that would not benefit veterans. And I
would also point out, as you well know Senator Rosen, veterans'
families, there is also their spouses and their children, tend
to get involved in this feedback loop. There is nothing that
has not been proposed here today that would not also benefit
those students.
That is increase attention to differentiation among the
institutions, that is being clear and transparent and that
language with all students and student borrowers. That is about
us reevaluating the 90-10 rule so that we have a better
feedback mechanism for creating higher quality and accessible
institutions. That would be paying attention to whether or not
student outcomes are about the institutions they attend or
about who they are as students. And so, all of that would be
universally good for veterans and for veterans families.
Senator Rosen. Thank you. I would also like to talk about
some of our Hispanics serving institutions. We have four of
them in Nevada and so how do you think the Federal Government
could address inequalities and probably wrap around services
that we talk about that really support the student and make
sure that they are positioned to succeed in these institutions.
So how do we level the playing field in some of our Hispanic
serving institutions that are particularly hard pressed to get
kids graduating?
Dr. Tandberg. I would be happy to speak to that. I attended
HSI, a Hispanic serving institution for my undergrad. I
received an exceptional education at Adams State University--go
grizzlies. What we do know from the literature Deming and
Walters study and others is that resources actually do matter
for outcomes.
That when more resources are put into these institutions,
specially our state appropriations dependent institutions, that
we see increased completion rates. And we also know from
research by Bridget Terry Long and others that our resources
are tragically unequally distributed across institutions. So,
institutions that serve low income students, students of color,
have the least resources.
I think we need to look at what does it cost to
successfully graduate a student by different demographics and
allow the resources then to follow those students. And the
research would indicate that we would see better outcomes if
that is the case.
Senator Rosen. Thank you. I appreciate it.
The Chairman. Thank you, Senator Rosen. We have votes at
11:45. A very helpful hearing.
Senator Murray, do you have other questions or comments?
Senator Murray. I will submit mine for the record, but I do
want to thank all the witnesses for your testimony today. It
has been very helpful. Thank you.
The Chairman. I have got two questions that should not take
too long, if I may. As we think about how do we--one of the
themes that runs through the testimony here and among others is
what do we do to help give more of an opportunity for first
generation Pell Grant eligible students to succeed in college.
I mean, what do we do to do that?
I have heard for some programs, for example, San Jose State
in California and Rutgers where the University, these are four
year institutions, uses coaches basically to work with students
to help them complete their education and to think about how to
align their course of study with work that they might do later.
I know in Tennessee where our state has pioneered free tuition
for two years of post-secondary education, the Governor and
others there think that would not be really worth doing if it
were not for the mentors that are an essential part of the
program which work with the students.
My question is do you think that is right? I mean as
Senator Murray and I and others think about how can we make
sure that first generation Pell Grant eligible students
succeed, what are ways that the Federal Government can
encourage four year and two year institutions and states to
coach or mentor or give more help to those students? The
difficulty we have is, for example, I like bicycle lanes on
roads.
Well, the Federal Government makes a rule on bicycle lanes.
What cities and states do is they just draw a bicycle lane on
existing road and make it dangerous for everybody. So, the
danger with our mandates is they do not work like we wished
they work. What could we creatively do to encourage that, that
I described, if you think it is worth doing?
Dr. Tandberg. I definitely think it is worth doing. There
are models of institutions that I think do an exceptional job.
Paul Quinn College, Amarillo College, something about Texas I
suppose----
Dr. Wheelan. That is in my region.
Dr. Tandberg. Yes, yes ma'am. And you know, I am inspired
by the College Equity Act where we are trying to identify
innovative programs and the Federal Government providing
support to those, I think it encourages innovation. I think in
many cases our colleges know what they need to do, and they are
trying to do it. I also think that a lot of them--they are just
really smart. They care a lot. In some cases, they do not have
the resources. Tennessee, God bless them. At the state level
they have the resources they can allocate to these things. I
wish that existed in every state. I really do. And so----
The Chairman. But Tennessee is a pretty low tax----
Dr. Tandberg. Yes, but I am talking about, they have got
lottery funds, right?
The Chairman. But it is $27 million a year to operate the
entire program. Because it is--the program is you just pay the
delta between what the Pell Grant pays and what the tuition is,
and that is not much.
Dr. Tandberg. Yes, I absolutely agree, and I would love to
see it in every state. And I think that we ought to think about
ways of driving resources to programs that are targeted toward
providing the kind of coaching you are talking about. The
services----
The Chairman. You think innovation--you think grants that
do that could do that?
Dr. Tandberg. It certainly could help.
The Chairman. Anybody else?
Dr. McMillan Cottom. Success coaches is one of the most,
empirically glaring positives across almost all of the research
literature that I know about on improving outcomes for first
generation students. Basically, we want to supplant the sort of
lack of familiar resources that helps students navigate the
complex bureaucracy and academic challenges of colleges. We
know that works.
We also know that colleges tend to be incentivized when
there is a competitive structure for them to apply for much
needed funds to provide those resources. To your bike lane
example though, Senator Alexander, I think one of the concerns
is that when the Federal Government does something to encourage
the states to make those programs sustainable, those programs
work best when they have a sustainable infrastructure that can
work across time, and the states usually need to become
partners for that part to happen.
We have however great historical models that have worked at
moments in time. The Trio programs, I think, when they were
originally designed, were designed to do exactly that, to
incentivize institutions to provide resources to do that type
of--intrusive counseling model is pretty much what they
pioneered and made sort of institutional form. I think those
things can be revisited and there are institutions that have
done it. I would also shout out Georgia State is doing a fine
job, so there are schools outside of Tennessee and Texas.
The Chairman. Dr. Wheelan.
Dr. Wheelan. Which is also in my region. Thank you.
Dr. McMillan Cottom. That is--you are welcome.
Dr. Wheelan. I agree with you wholeheartedly Senator that
it can do nothing but help. But there are additional resources
that states might need, and businesses might need to
contribute. Hunger, places to live, child care, all of those
things contribute to students not graduating or not completing
a program. That was one of the reasons that the for-profits and
online institutions became so successful because working
people, who are the majority of students nowadays, need those
kinds of wraparound services. So, anything that can be done to
provide additional financial incentives for institutions to be
able to bring in those services would be beneficial.
Dr. Looney. Can make one more observation, thank you. I
think we do not measure success very well and I do not think we
give the information to schools at the level that they need to
make improvements. So, I do not think a school might know how a
program is performing or how their students do after they leave
and so that is something that the Federal Government is well
positioned to understand and help schools with. I also, not to
beat a dead horse, think that if we steer students away from
low quality programs by kicking them out of Federal Aid for
instance, then I think that would improve the choices that
students make. I guess by limiting them from making bad
choices.
The Chairman. Dr. Tandberg, you have done a good job of
holding under control something we see often here which is, I
have a good idea and I will make everybody do it. As a former
Governor I always kind of bristle when people come from states
and say here is what the Federal Government ought to do.
I say, well why should we make you do what you ought to do
because we have four Governors, former Governors, here on the
panel who are perfectly capable of doing many things and you
gave the example of the online reciprocity organization where
states got together to try to regulate online regulation. What
could states do--when you mentioned a number of things that you
thought would improve accountability that states could do. For
example, states are perfectly capable of regulating for-profit
colleges. They can close them down. They can write rules for
them. They can tell them how they operate. Why do they not do
it?
Dr. Tandberg. I mean that is a very hard question to answer
considering we got 50 states with different histories and
contacts.
The Chairman. No, but you are their representative here.
[Laughter.]
Dr. Tandberg. Yes, sir. I do not forget that, and I do
think it is reaching a point of inflection now when it comes to
for-profit institutions. Often states are left holding the bag
when they close. They have to be--they hold the records. They
have the monitor and implement teach-outs because they are
ending precipitously without teach-out agreements in place.
There is often panic. I think states can do a better job of
monitoring the financial viability of the institutions. They
can do that using existing metrics and tax documents. I think
we could do a better job when it comes to requiring teach-out
plans at the point of authorization, and then teach out
agreements when these institutions are nearing, as we feel,
closure or potential closure. And, it would often take changes
in state legislation. There are things that our members can do
under their existing authority but often they don't have the
authority via legislation to do the things we want them to do.
And as you know, that can be a difficult process to make
changes to.
The Chairman. Yep. That is true, but I still think as we
talk about strengthening accountability and the triad that it
is a good time for states to think, okay what could we be doing
better and maybe we can do it better by agreement or by example
or consortium of six states. We could say we are going to work
together to do this and I know how Governors, do they go to the
Governor's conference and brag on what they are doing and then
the others get jealous and say well, we will outdo you with our
six state organizations.
I think this--I am not sure how to encourage that from the
Federal Government except to put a spotlight on it. For
example, in community colleges, you talked about the large
framework of regulation they have. They do have, but Governor
Hansen, my retiring Governor who instituted the free tuition
program in Tennessee said his biggest disappointment was a poor
completion rate in the community colleges. I mean community
colleges have got a ways to go to hold up their end of the
bargain as well and I am leery of, as Dr. Wheelan said, bright
lines from Washington because they often produce unintended
consequences. They usually produce unintended consequences, and
so those are my biases I guess.
I want to thank all of you--each of you for coming. It has
been very helpful to us. You can see from the attendance of the
Senators. The record will remain open for 10 business days.
Members may submit additional information and questions for our
witnesses for the record within that time if they would like.
If you think of something you wish you would have said or said
differently, please know that we would welcome, Senator Murray
and I and the rest of the Committee, would welcome hearing from
it.
The Chairman. The Committee will stand adjourned.
ADDITIONAL MATERIAL
PostsecData Collaborative and National Skills Coalition Support the
Reintroduction of the College Transparency Act
April 1, 2019
The Postsecondary Data Collaborative (PostsecData) and the National
Skills Coalition in cooperation with the undersigned organizations and
individuals, applaud Senators Bill Cassidy (R-LA), Elizabeth Warren (D-
MA), Tim Scott (R-SC) and Sheldon Whitehouse (D-RI), and
Representatives Paul Mitchell (R-MI), Raja Krishnamoorthi (D-IL), Elise
Stefanik (R-NY), and Josh Harder (D-CA) for championing transparency
through their introduction of the College Transparency Act, which would
create a secure, privacy-protected postsecondary data system. This
bipartisan, bicameral bill would help students and families,
policymakers, institutions and employers to make informed decisions by
providing more complete information about college access, success,
costs, and outcomes. This information empowers students and families to
make well-informed choices about their education, policymakers and
institutions to craft evidence-based policies to help students succeed,
and employers to navigate the talent pipeline they need to grow the
economy. Without complete, representative data that counts all
students, equity will be out of reach.
The research is abundantly clear: Investing in a college education
pays off. \1\ But while college is worth it on average, students,
policymakers, institutions and employers cannot answer crucial
questions about which postsecondary programs provide an adequate return
on investment for which students. Students and taxpayers have a right
to know what they can expect in return for their college investment.
Yet, existing policies prevent us from answering basic questions, such
as:
---------------------------------------------------------------------------
\1\ College Board, Education Pays 2016, https://
trends.collegeboard.org/sites/default/files/education-pays-2016-full-
report.pdf.
What are national completion rates for part-time and
---------------------------------------------------------------------------
transfer students of color?
How do college access, affordability, and completion
vary by race, ethnicity, and income?
How much do students borrow, and can they repay their
loans?
How many non-completers from a particular college
never reenroll, and how many transfer to finish their degree at
another institution?
Which students go on to succeed in the workforce?
Answers to these questions would help students and families choose
programs that demonstrate strong outcomes, while helping policymakers
and educators to implement policies and practices that help more
students succeed. For the marketplace to function effectively, all
these stakeholders need access to high-quality information that
reflects all types of students and can look at outcomes across state
lines. The federal governrnent--with its access to existing data,
including on employment and earnings--is uniquely positioned to compile
that information, while reducing institutional reporting burdens.
The College Transparency Act:
Overturns the ban on student-level data collection in
the Higher Education Act;
Creates a secure, privacy protected student-level
data network within the National Center for Education
Statistics (NCES) using strong security standards and data
governance protocols;
Accurately reports on student outcomes including
enrollment, completion and post-college success across colleges
and programs;
Leverages existing data at federal agencies and
institutional data by matching a limited set of data to
calculate aggregate information to answer questions critical to
understanding and improving student success;
Protects all students by limiting data disclosures,
prohibiting the sale of data, penalizing illegal data use,
protecting vulnerable students, prohibiting the use of the data
for law enforcement, safeguarding personally identifiable
information, and requiring notice to students and regular
audits of the system;
Streamlines burdensome federal reporting requirements
for postsecondary institutions;
Provides information disaggregated by race, ethnicity
and Pell Grant receipt status to identify inequities in
students' success;
Requires a user-friendly website to ensure the data
are transparent, informative, and accessible for students,
parents, policymakers, and employers; and
Feeds aggregate information back to states and
institutions so they can develop and implement targeted, data-
informed strategies aimed at supporting student success.
The College Transparency Act represents broad consensus among
students, colleges and universities, employers, and policymakers that a
secure, privacy-protected postsecondary student data system is the only
way to give students the information they need to make informed college
choices. That is why we are coming together to urge Congress to pass
this bill to provide accurate, timely, and high-quality aggregate data
in a user-friendly, transparent way for students and families,
policymakers, institutions and employers who have a right to know
answers to key questions about student access and success.
America Forward
Association of American Colleges & Universities
(AAC&U)
AccessLex Institute
AccuRounds
Achieve Atlanta
Achieving the Dream
Advance CTE
AdvancED
Alloy Engineering Co. Inc.
American Association of Community Colleges
AMT--The Association For Manufacturing Technology
Ann Majdic
Arizona Office of Economic Opportunity
Aspen Institute College Excellence Program
Association for Career and Technical Education
Association of Community College Trustees
Association of Public and Land-grant Universities
Association of Public Data Users
Atlanta Regional Workforce Development Board
Birmingham Prosperity Partnership
Board of Regents, State ofIowa
Boston Centerless
Bottom Line
Build UP
California Competes
California EDGE Coalition
California State Student Association (CSSA)
Campaign for College Opportunity
Center for American Progress
Center for Law and Social Policy (CLASP)
Chicago Citywide Literacy Coalition
Chicago Jobs Council
Chiefs for Change
Cobb Chamber of Commerce
College Now Greater Cleveland
Colorado Center on Law and Policy
Community Foundation for Greater Atlanta
Complete College America, Inc.
Connecticut Association for Human Services
Connecticut State Colleges and Universities
Corporation for a Skilled Workforce
Council for Adult and Experiential Learning
Custom Plastics and More
CWA Southern California Council
Dallas County Community College District
District 1199C Training & Upgrading Fund
Eastern Carolina Workforce Development Board, Inc.
ECPI University
Edmit
EducationQuest Foundation
Employee of Choice Academy
EmployIndy
Enlisted Association of the National Guard
Excelencia in Education
Fairfield-Suisun Adult School
Field Crest Care Center
Five Star Development, Inc.
Georgetown University Center on Education and the
Workforce
Georgia Association for Career and Technical
Education
Georgia Department of Education
Georgia State University Student Government
Association
Global Resource Management Inc.
Greater North Fulton Chamber of Commerce
Greater Philadelphia Healthcare Partnership
Greater Washington Community Foundation
GW Institute of Public Policy, George Washington
University
HCM Strategists
Higher Learning Advocates
Holder Construction Company
Indiana Institute for Working Families
Institute for Higher Education Policy
James Rutter, CEO RQECG Inc.
Jersey City Literacy Program
JEVS Human Services
Jewish Vocational and Career Counseling Service
Jewish Vocational Service, Boston
JMPDX LLC
Jobs For the Future
JobTrain
Kathryn Stege
Knowledge Alliance
LeaderQuest Holdings Inc.
Learn4Life
Lehman College of The City University of New York
Louisiana State University
Mahoning Valley Manufacturers Coalition
Marlen Perez
MCCI Medical Group
Metro Atlanta Chamber
Muslim Student Association--West
Nashville Area Chamber of Commerce
NASPA--Student Affairs Administrators in Higher
Education
National Association for College Admission Counseling
National Association of Graduate-Professional
Students
National Association of Student Financial Aid
Administrators
National Council for Adult Learning
National Council for Workforce Education
National Laboratory for Education Transformation
National Skills Coalition
Naugatuck Adult Education
New America
New Orleans Youth Alliance
New York Association of Training & Employment
Professionals (NYATEP)
Nexus Research and Policy Center
NOCTI
Northwest WI Workforce Investment Board
Nucleos-PortableCloud
Office of Institutional Research & Planning, The Ohio
State University
Optimax Systems Inc.
Orleans Technical College
Partners for College Affordability and Public Trust
Partnership for College Completion
Perfection Spring & Stamping Corp.
Policy Matters Ohio
Policy Planning Partners
Postsecondary Analytics
Pretty Good Consulting, Inc.
ProLiteracy
Pryor Education Insights
Public Insight Corporation
Rebuilding America's Middle Class
Results for America
Rhode Island Adult Education Professional Development
Center
Richards Industries
Sargent Shriver National Center on Poverty Law
Scholarship America
Shenandoah Initiative for Adult Education
Skills2Compete Colorado
SkillWorks
South Asian Fund for Education, Scholarship and
Training (SAFEST)
Southeast Ministry
Southwest Ohio Region Workforce Investment Board
Stephen L. DesJardins, Professor, University of
Michigan
StriveTogether
Student Veterans of America
TechBirmingham
The Bell Policy Center
The Education Trust
The Institute for College Access & Success (TICAS)
The Quality Assurance Commons
The State University Of New York
The Veterans Education Project
Third Way
Towards Employment
Transportation Leaming Center
TRC Staffing Services
Tulsa Regional Chamber
U.S. Chamber of Commerce
uAspire
United Way of Central Iowa
United Way of Greater Atlanta
Urban Alliance
Veterans Education Success
Virginia Community College System
Welcoming Center for New Pennsylvanians
Western Nevada College Adult Literacy & Language
WKBJ Foundation
Women and Families Center-Open DOHR Employment
Training
Women Employed
Workforce Career Readiness
Workforce Data Quality Campaign
Workforce Development Board of South Central WI, Inc.
Workforce Partnership, local workforce board serving
Kansas City, Kansas area
Workforce Solutions Group
World Education Services
WSP USA
Wyoming Machine, Inc.
Young lnvincibles
______
[Whereupon, at 11:57 a.m., the hearing was adjourned.]