As the Senate education committee continues its work gathering information to help shape a bill to reauthorize the Higher Education Act (HEA), the lawmakers zeroed in on a particularly hot topic on Tuesday: how to improve transparency and accountability in higher education, specifically as they relate to the cost of college and student loan debt.
Before officially kicking off the hearing, Sen. Lamar Alexander (R-TN), who chairs the Senate Health, Education, Labor, and Pensions (HELP) Committee, blasted Democrats, blaming them for the many still unfilled positions at the Department of Education. To date, only four positions have been confirmed, including Education Secretary Betsy DeVos.
"For a while, the responsibility for this delay could be shared with the administration, which was slow to make nominations. But not anymore," Alexander said in his opening remarks. "The responsibility lies solely with the democratic minority which is insisting on taking most of one week to confirm each nominee, knowing that there is not that much time for nominations on the Senate floor."
After stressing the fact that the Senate has dozens of nominations to get through — 103 to be exact — Alexander turned to the topic of the day. Alexander has repeatedly said that reauthorizing the HEA is a priority for the committee this year, and that he plans to have a bill out this spring.
A central part of accountability in higher education, he said, is making sure students do not take out more money in loans than they are able to pay back.
Under the status quo, Alexander said institutions are held "somewhat accountable" by their cohort default rates. Colleges with cohort default rates above a certain percentage — 30 percent or higher for three consecutive years, greater than 40 percent for one year, or both — are subject to sanctions, including a loss of eligibility for one or more federal student aid programs. But that measure is imperfect, he explained, because it doesn't take into account the even larger share of borrowers who are not yet in default, but are not making payments on time.
"I believe Congress should consider new accountability measures that are more effective at holding all individual programs at all colleges and universities accountable for the ability of their students to pay back their loans," Alexander said. He suggested bolstering data on the cost of college and potential earnings, giving institutions more flexibility in counseling students on borrowing, and generally holding "the schools themselves more accountable."
In her opening remarks, Sen. Patty Murray (D-WA), the ranking Democratic member on the committee, stressed that any reform to accountability needs to take into account the diversity of the sizes and types of postsecondary institutions across the country.
"Community colleges differ vastly from four-year colleges," she said. "In some cases, schools may have different priorities. … It's only logical that we would design accountability measures to take into account the different types of colleges and keep a closer eye on bad actors."
Murray went on to say that three points should be addressed in any conversation about transparency and accountability: a one-size-fits-all system will not work, schools must be held accountable at all stages of a student's education, and colleges should play a bigger role in making higher education more accessible.
"In short, students should be better off, not worse off, after enrolling in college," Murray said.
The committee heard testimony from a panel of five witnesses: Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce; Jose Luis Cruz, president of the Lehman College of The City University of New York (CUNY); Jason Delisle, a resident fellow at the American Enterprise Institute (AEI); Ben Miller, senior director of postsecondary education at the Center for American Progress (CAP); and Mamie Voight, vice president of policy research at the Institute for Higher Education Policy (IHEP).
Carnevale said it will be necessary to provide programmatic-level data on employment and earnings, particularly because economic value is often the primary reason people attend college.
"If students are investing more to go to college, they need to have answers to basic questions about the value of postsecondary education," Carnevale said in his written testimony. "They need better information to make decisions that have lifelong economic consequences, and this information should be delivered in new ways. In addition, the governance, accreditation, and financing of postsecondary education must go beyond student completion as a goal and be connected to measurable post‐college outcomes."
Voight doubled down on the need for better data, including a student-level unit record system.
"While some postsecondary data, such as information on the student loan program like cohort default rates and repayment rates, are relatively complete and of high-quality, much of our data on student outcomes are insufficient," she said in her written testimony. "Our system is data rich, but we are information poor, relying on a duplicative, inefficient, and cumbersome postsecondary data infrastructure designed for yesterday's college and yesterday's student. As a result, we cannot answer many basic questions about college access, success, price, and post-college outcomes."
During his remarks, Miller said the use of the cohort default rate "is little more than a finger wag," and said repayment rates could be a potentially stronger measure of accountability.
"They send a message that our loan system should expect student success, not just avoid the worst possible outcome," he said.
The way repayment rates are defined and calculated matters, though, he said. While some have suggested that successful repayment should require a borrower to pay at least $1 toward the principal balance by the end of three years, "we might be better off judging if borrowers are on track to repay within 20 or 25 years," he said. Additionally, one accountability measure will not be enough, Miller said, and neither will one sanction centered on terminating access to federal aid.
A comprehensive accountability system, he said, would use multiple measures that examine student outcomes by racial, ethnic, and socioeconomic subgroups.
"Using just one indicator is insufficient because it is too easy for bad actors to game," he said. "... There's more to accountability than just outcomes, though. We need stronger gatekeeping to keep lousy actors out of the aid programs and ongoing guardrails to keep schools from breaking bad."
In his testimony, Delisle focused more on the costs and risks associated with the student loan system. The costs to taxpayers, he said "speak directly to the need for policies that guard against fraud, waste, and abuse along with policies that provide information about loan performance." One problem with loan-based accountability measures, such as cohort default rates or risk-sharing proposals, is that they do not capture students who don't borrow and institutions where borrowing is generally low.
"This implies that there is not a need for accountability measures for grant aid or for students who pay out of pocket," Delisle said. "If the accountability measure is supposed to prevent taxpayer resources from supporting overpriced and low-quality programs – or protect consumers from squandering their time and limited federal aid – then focusing accountability only on loan performance falls short of that goal."
He said accountability measures could include federal Pell Grants, gross tuition prices, or federal tuition tax credits, among other things, and that they should be applied consistently across programs and institutions.
On the other hand, Cruz, like Miller, stressed that an accountability system must take into account the diversity of students and institutions.
"To better serve students, the new [HEA] should protect them from the tyranny of low expectations, defend their right to seek to meet their full potential, provide a level playing field as they work to improve their lot in life through postsecondary education and recognize the critical role institutions play in a student's success," Cruz said.
Accountability measures, he said, must take into account equity, incentivize innovation, and protect students and taxpayers from waste, fraud, and abuse.
"Congress must ensure that every dollar the federal government invests in higher education is used effectively, efficiently, and in the best interest of the increasingly diverse public," Cruz said. "An equity-focused accountability system for higher education can address this need and help improve student outcomes across the board by better serving our historically underserved low-income students and students of color."
Publication Date: 1/31/2018