Senators Introduce College Affordability And Accountability Bill

By Jesse O’Connell, Policy and Federal Relations Staff 

The issue of college affordability and accountability, briefly mentioned by President Obama during last Tuesday’s State of the Union Address, remains a topic of interest for lawmakers in Congress. Three Democratic senators have taken the latest step to address concerns in this area by introducing the College Affordability and Innovation Act of 2014, a bill that seeks to establish benchmarks for college access, affordability and outcomes. The bill also proposes a competitive grant program to fund a series of pilot programs at a handful of institutions that wish to test innovative higher education programs.

Sens. Chris Murphy (D-CT), Brian Schatz (D-HI), and Patty Murray (D-WA) have co-signed the bill, which was introduced last week during an event at the Center for American Progress (CAP). The legislation would establish a commission on higher education accountability standards comprised of various stakeholders, including students, institutions, researchers, and consumer advocates. Appointed by Congress and the Department of Education (ED), the 15-member commission would be tasked with recommending a set of minimum accountability standards that institutions must meet with respect to affordability, accessibility for middle and low-income students, and value in order to receive Title IV funds. The proposed commission is instructed to consider the differences in mission of institutions and to ensure that institutions are held to standards appropriate for that mission. Additionally, institutions that solely offer graduate or professional degrees are excluded from these proposed accountability standards. 

The bill stipulates that the accountability measures must at a minimum include the following three measures: 

  • Average required cost of attendance
  • Percentage of enrolled students receiving Pell
  • Student loan repayment rate 

The bill also mentions specific additional factors to consider: 

  • Cost of tuition relative to administrative costs
  • Percentage of institutional aid awarded based on need as opposed to merit
  • Annual increases in tuition after taking into account all public subsidies
  • Enrollment of low- and middle-income, underrepresented minorities, and adult students aged 25 and older.  
  • If institutional policies on credit transfer meet industry standards
  • Student progress towards degree
  • Completion of a degree or certificate, including transfer and part-time students, or if applicable, transfer rates to a 4-year degree program
  • Retention rates
  • Full-time employment and graduate degree enrollment rates

The commission is given one year to complete their work and submit a set of recommendations to ED, at which point ED is given one year to consider the recommendations and publish a final rule on institutional accountability standards. As part of writing their recommendations, the commission is required to hold at least eight public hearings throughout the country to gather feedback.

Should these accountability measures be created and adopted, the bill describes how they would be enforced. Once a determination is made that an institution is not meeting the standards, if “continuous improvement” is not shown: 

  • After two years, they must pay a fine equal to 10 percent of Title IV funds received the previous year
  • After three years, a fine of 20 percent of Title IV funds received the previous year
  • After four years, a fine of 30 percent of Title IV funds received the previous year
  • After five years, loss of Title IV eligibility

The proceeds from these penalties would fund a competitive reward grant program for institutions that meet or exceed the established accountability standards. Funds awarded through the reward grant program would be used for need-based aid for Pell-eligible students. 

The bill additionally creates an “evidence-based competitive pilot program” which seeks to establish an incentive for institutions to develop programs that reduce costs and time to degree while still offering a high quality education. Specific types of innovation prioritized by the bill include: online learning; competency based learning; experiential learning and customized completion programs; and concurrent enrollment in secondary and postsecondary education. The bill would fund programs at up to 15 institutions and would extend authority to ED to waive certain Title IV program eligibility requirements related to seat time, credit hours and other rules that would otherwise prevent certain types of innovation.

During the CAP event, Schatz described college affordability as “the middle class issue of our time," but cautioned that “accountability systems for higher ed need to be done thoughtfully.” Murphy agreed that there was a “need to be careful of unintended consequences of accountability” but stressed that this was a worthy endeavor because “default rates are rising, [and] we need to recommit ourselves to giving everyone the opportunity to go to college.”

In a press release announcing the bill, Murphy states that a goal of the bill is to provide college access to students of all backgrounds and reduce the reliance on student loans; Murphy has himself been known to frequently reference his own history with student loan debt.

It is unclear at this point if the legislation will move independently, or if it’s intended to be a marker in the broader conversation about the forthcoming reauthorization of the Higher Education Act. NASFAA staff will monitor any developments and share additional information as it is made available.

 

Publication Date: 2/4/2014


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