studentaid

New Reporting Requirements Proposed for Teacher Ed

A draft of new regulations proposed as part of the Education Department's negotiated rule making process for teacher preparation programs would require states to report data on such programs' employment outcomes (for their newly graduated teachers) and student learning outcomes (for those teachers' students). The draft regulations, which will be discussed and modified at the rule making panel's meeting next week, also would require states to make "meaningful differentiations in teacher preparation program performance," based in large part on learning outcomes for their graduates' students. So far, the regulations leave the definition of a "high quality teacher preparation program," a key point in the panel's discussions, to individual states to determine.

Audit Challenges Oversight of Foreign Medical Schools

The U.S. Education Department's federal student aid office has fallen short in several ways of ensuring that foreign medical schools are meeting federal requirements that their students pass licensing exams, meaning that there is no assurance that student loan funds were "disbursed only to students who attended schools that were eligible to participate in the Federal student loan programs, the department's inspector general said in an audit last month. The audit found that the federal student aid office was "not timely in taking appropriate actions against schools identified as having failed to submit the required pass rate data or meet the pass rate threshold, inconsistent in its methodology for calculating pass rates, and accepted from some foreign medical schools pass rate data that were not complete or were not in the required format."

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Essay praises federal legislation to gauge college programs' labor market returns

On February 9, Senator Ron Wyden, Democrat of Oregon, introduced a bill on the Senate floor entitled the “Student Right to Know Before You Go Act.” The bill gained bipartisan and bicameral support when it was introduced in the House by Duncan Hunter (a Republican from California and chairman of the House Subcommittee on Early Childhood, Elementary, and Secondary Education). 

Hunter and Wyden have been working together to increase the quality of educational data and improve transparency in measures of the success of colleges and universities. This proposed legislation was the product of this work. While its chances of passage are likely low, it is a smart piece of legislation that could help transform our expensive and inefficient system of postsecondary education.

A key provision of the bill would support states in expanding or creating postsecondary student level data systems that include measures of student success in the labor market (including average individual annual earnings by educational program, degree received and educational institution) from all institutions within the state, public and private (nonprofit and for-profit). It presents a much smarter approach to measuring what is called “gainful employment” than the U.S. Department of Education has managed so far.

In 2010, the Department of Education waded into the issue of the labor market returns of college degrees. This foray was tied to proposed regulations that would punish institutions whose students were not earning sufficient income to pay off their student debts. Whatever the merits of the idea, the department set off a firestorm with its regulations and with the quality of the data it released in August of that year.

The proposed regulations would have shut down a large number of the programs run by for-profit institutions plus some community college programs as well (like so much else surrounding the gainful employment debate, the number of programs affected was hotly contested). The department backtracked on the original regulations and last year issued watered down regulations. There was much to dislike about the department’s efforts, but one of the most problematic was putting the regulatory cart before the data horse. In short, the database to support the high-stakes regulations was at best thin and cast doubt on the department’s ability to base any gainful employment regulations on a sound foundation.

The department’s data capacity will be tested again next month, if it can stick to its plan to release new data on the labor market success of students in career-oriented programs. This time around, the Department is using wage data from the Social Security Administration and matching it to student debt data it holds within its Federal Student Aid office.

No one knows how good the matched data will be, and since the Social Security Administration (rightfully) has limited the ability of anyone outside of government to look at the merged dataset -- and since the stakes (although lower than proposed in 2010) are still high -- there will likely be a major dustup when the data are released.

This is why Wyden’s bill is smart: it builds the database first, and puts the linked data into the public sphere without the heavy-handed threat of government closure of programs.

Wyden’s approach gives everyone the opportunity to probe, poke and prod the data to develop a better sense of their limits and their strengths. Regulations can come later, but in the meantime, the availability of these data will allow students and their families to make more informed choices about the likely outcome of their investment of time and money in a given program in a given school. The data will also allow state policy makers to judge the rate of return on their state’s investment of taxpayer monies in different programs.

We can already anticipate some of the responses to this legislation: that we shouldn’t judge colleges on a single number like salaries or the return on investment, that college education is about so much more than simply finding a job, that many of the societal benefits of having an educated population will not be measured, and so on. Of course many of these statements are true.

But the national commitment to higher education is largely about economic development and creating a skilled competitive workforce. Would the Obama administration be pushing its ambitious postsecondary agenda if colleges just taught students to parse Proust? Would students flock to colleges and universities to learn postmodern poststructural critical theory? Students, their families, taxpayers, and government officials need to know the likely returns for investing so much time and so much money in the pursuit of a degree. And the Wyden bill is likely to get this information into the public sphere faster than any other approach we are currently pursuing.

On a more wonky note, the Wyden bill will help force the revision of the nation’s “premiere” data system for collecting information on colleges and universities. The Integrated Postsecondary Education Data System (IPEDS) was a reasonable data collection system in the middle of the last century, but to say it is creaky gives it more than its due.

In a nutshell, IPEDS is based on aggregated data collected for a declining number of postsecondary students (it already covers less than half). IPEDS needs to be replaced with student-level data such as the Wyden bill calls for. Wyden’s bill also makes the states full partners in this new IPEDS model, recognizing their critical role in higher education policy. In doing this, the IPEDS burden will be reduced for a great many institutions that submit both IPEDS and student data to the state.

In 2006, Congress banned the federal government from itself holding such a data system. At just about the same time, it authorized the expenditure of hundreds of millions of dollars to pay for the states to create them. Wyden’s bill will have these state systems brought together for a national view of the data, while prohibiting the feds from having access to personally identifiable information. This would improve the payoff of the nation’s investment in these data systems and keep the action at the state level, where it belongs and where, under current legislation, it can actually take place. 

Colleges and universities need to better measure the progress of their students as they work toward their degrees, they need to better measure what their students are actually learning, and they need to better measure how well students are doing in the job market after they graduate. Only then can we increase transparency and improve accountability. Wyden’s bill has many of the pieces of the puzzle right, and if it became the law of the land, it would mark a major step forward in improving postsecondary education.

Mark S. Schneider is vice president for new educational initiatives at the American Institutes for Research.

NCAA Division I Members Back Multiyear Scholarships for Athletes

The colleges in the National Collegiate Athletic Association's Division I voted last week to uphold their ability to award multiyear scholarships to athletes, narrowly rejecting an effort by some of the division's members to block such grants. The multiyear scholarship rule was one of several that the NCAA's Division I Board of Directors approved in a burst of legislative activity last fall aimed at quelling concerns about rule breaking and about the association's treatment of athletes -- and one of two rules that significant numbers of Division I members sought to block because of concerns that they would favor wealthier programs and conflict with how most institutional financial aid is awarded, among other reasons. The NCAA's governance process provides a mechanism in which the division's members can formally vote to override decisions by the Division I board.

Last week's vote on the multiyear scholarship rule would have required a five-eighths majority of Division I members to block it from taking effect. But only 205 of the 330 participating colleges and conferences -- two short of the 207 needed -- opposed the scholarship plan. Twenty-five institutions and leagues did not vote. "I am pleased that student-athletes will continue to benefit from the ability of institutions to offer athletics aid for more than one year," said the NCAA's president, Mark Emmert. "But it's clear that there are significant portions of the membership with legitimate concerns. As we continue to examine implementation of the rule, we want to work with the membership to address those concerns."

Gillen essay updating Bill Bennett hypothesis on college prices

Twenty-five years ago this past Saturday, then-Secretary of Education William J. Bennett argued in a New York Times essay called "Our Greedy Colleges" that “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase.” Ever since, the notion that colleges raise tuition to capture financial aid has gone by the moniker of the Bennett Hypothesis.

Scholars have tested the Bennett Hypothesis for two and half decades and the result is a mountain of evidence that neither rejects nor confirms the notion. While no study has found that a $1 increase in aid leads to a $1 increase in tuition, a significant number of studies find that the effect on tuition is not $0, meaning that the tendency of many within higher education to label the Bennett Hypothesis a myth is not justified.

Given the ambiguous evidence, it is clear that the theory needs revision. And indeed, a few refinements go a long way toward reconciling the theory’s predictions with the empirical data, indicating that the original theory was oversimplified.

The first refinement accounts for the fact that aid directed toward low-income students (such as Pell Grants) is much less likely to lead to higher tuition than is aid directed at relatively rich students (such as the higher education tax credits). Aid restricted to low-income families allows students who were previously priced out of higher education to attend, without giving colleges the ability to raise tuition without again pricing these students out of higher education. That is not the case with aid given to relatively affluent students who will attend college regardless of price. 

The second refinement is to note that many public colleges are subject to explicit or implicit caps on tuition by their state legislatures, and that many private colleges are trying to become more selective to move up in college rankings. This means that rather than raise tuition as much as possible when aid is increased, many colleges will instead grow their applicant pool, allowing them to become more selective.

The third refinement introduces Bowen’s Rule, which refers to the tendency for colleges to raise and spend all the money they can in the pursuit of excellence. This sounds innocent enough, but the implication is that costs will rise whenever revenue rises. Because increases in financial aid give colleges the option to increase revenue, financial aid is partly responsible for the surge in spending by colleges.

This new and improved Bennett Hypothesis 2.0 is more reassuring than the original about the ability of financial aid to improve college affordability in the short term. Targeting aid to low-income students, placing caps on tuition increases at public institutions, and even negative publicity for colleges that raise tuition too much can all help restrain tuition increases.

But Bennett Hypothesis 2.0 tells a more depressing story in the long run. Because competition among colleges is based on their relative standing, those colleges that exploit the opportunity to raise tuition when financial aid is increased will be able to improve relative to those that do not by hiring better professors, offering more aid to attract meritorious students, building state-of-the-art laboratories, etc. To avoid falling behind, even those colleges that initially resisted are forced to follow suit and raise tuition.

The key lesson is that we need to be very careful when (re)designing financial aid programs to avoid the very real danger that financial aid money will be captured by colleges without improving college affordability.

More details on Bennett Hypothesis 2.0 are available here.
 

Andrew Gillen is the research director of the Center for College Affordability and Productivity. 

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