[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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
                   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\
---------------------------------------------------------------------------
    \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/.

---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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/.
---------------------------------------------------------------------------
      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.
---------------------------------------------------------------------------
    \25\  For example, better directing resources where they are needed 
most: low-income students and the underfunded institution where they 
enroll.
---------------------------------------------------------------------------
                      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.
---------------------------------------------------------------------------
    \26\  https://www.americanprogress.org/issues/education-
postsecondary/reports/2018/04/25/449937/college-accreditors-miss-mark-
student-outcomes/.
---------------------------------------------------------------------------
                         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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
                               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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \34\  Orfield, G., & Hillman, N. (2018). Accountability and 
Opportunity in Higher Education: The Civil Rights Dimension. Harvard 
Education Press.
---------------------------------------------------------------------------
                         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.
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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/.
---------------------------------------------------------------------------
                            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\
---------------------------------------------------------------------------
    \43\  Orfield, G., & Hillman, N. (2018). Accountability and 
Opportunity in Higher Education: The Civil Rights Dimension. Harvard 
Education Press.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
                               References
    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.

    Armstrong, E. A., & Hamilton, L. T. (2013). Paying for the Party. 
Harvard University Press.

    Birdsall, C. (2018). Performance Management in Public Higher 
Education: Unintended Consequences and the Implications of 
Organizational Diversity. Public Performance & Management Review, 1-27.

    Bonilla-Silva, E. (2006). Racism without racists: Color-blind 
racism and the persistence of racial inequality in the United States. 
Rowman & Littlefield Publishers.

    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/.

    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.

    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.

    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/.

    Clotfelter, C. T. (2017). Unequal colleges in the age of disparity. 
Harvard University Press.

    Cottom, T. M. (2017). Lower ed: The troubling rise of for-profit 
colleges in the new economy. The New Press.

    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.

    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.

    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.

    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.

    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.

    Goldrick-Rab, S. (2016). Paying the price: College costs, financial 
aid, and the betrayal of the American dream. University of Chicago 
Press.

    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.

    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.

    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.

    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.

    Jackson, C.K. (2018). Does school spending matter. The new 
literature on the old question. https://works.bepress.com/
c_kirabo_jackson/38/.

    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/.

    Johnson, R.C. (2015). Follow the Money: School Spending fromTitle I 
to Adult Earnings. RSF: The Russell Sage Foundation Journal of the 
Social Sciences, 1(3):50.

    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.

    Kelchen, R. (2018). Higher education accountability. Johns Hopkins 
University Press.

    Kelchen, R. (2018). Do performance-based funding policies affect 
underrepresented student enrollment? The Journal of Higher Education, 
1-26.

    Kelchen, R., & Stedrak, L. J. (2016). Does Performance-Based 
Funding Affect Colleges' Financial Priorities? Journal of Education 
Finance, 41(3), 302-321.

    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.

    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.

    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/.

    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.

    Ma, J., Pender, M., & Welch, M. (2016). Education Pays 2016: The 
Benefits of Higher Education for Individuals and Society. The College 
Board.

    Marcus, J. (2018). Facts about race and college admission. 
Hechinger Report. https://hechingerreport.org/facts-about-race-and-
college-admission/.

    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.

    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.

    NCPPHE (2005). State capacity for higher education policy. San 
Jose, CA: NCPPHE.

    Oliver, M., & Shapiro, T. (2013). Black wealth/white wealth: A new 
perspective on racial inequality. Routledge.

    Orfield, G., & Hillman, N. (2018). Accountability and Opportunity 
in Higher Education: The Civil Rights Dimension. Harvard Education 
Press.

    Owen-Smith, J. (2018). Research Universities and the Public Good: 
Discovery for an Uncertain Future. Stanford University Press.

    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.

    Putnam, R. D. (2016). Our kids: The American dream in crisis. Simon 
and Schuster.

    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.

    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.

    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.

    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 Clearinghouse Research Center.

    Smith, K. (2018). A Perfect Mess. The Unlikely Ascendency of 
American Higher Education. Chicago: University of Chicago Press.

    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.

    Sommo, C. et al (2018). Doubling Graduation Rates in a New State: 
Two-Year Findings from the ASAP Ohio Demonstration. Washington, DC: 
MDRC.

    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.

    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.

    The College Board (2018). Trends in Higher Education.https://
trends.collegeboard.org/education-pays/figures-tables/completion-rates-
family-income-and-parental-education-level.

    The Pew Charitable Trusts (2017). How governments support higher 
education through the tax code. Washington, DC: Pew Charitable Trust.

    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.

    Webber, D. A. (2017). State divestment and tuition at public 
institutions. Economics of Education Review, 60, 1-4.

    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/.
                                 ______
                                 
                 [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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
        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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
             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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \34\  Chou, Tiffany, Adam Looney, and Tara Watson. (2017).
---------------------------------------------------------------------------
                                 ______
                                 
    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.]

                                   