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Previewing the Higher Ed Act

August 5, 2013

WASHINGTON – Creating a federal unit records database to track students into and through higher education. Seeking expansion of the federal antitrust exemption to let private colleges share information about pricing and financial aid. Lowering the amount of federal loan funds students can borrow based on the kind of program they’re in and the kind of credential they’re seeking. Letting accreditors create a “fast track” process for approving colleges that are considered “low risk” to students and to the public. Adjusting the data used to judge the performance of colleges to account for the academic and financial “risk factors” of their students.

Those are some of the ideas that various higher education groups have put forward in their initial recommendations for how Congress might consider rewriting the Higher Education Act, if and when lawmakers actually get around to considering the main federal law governing federal programs for students and higher education.

Given recent history and the legislative gridlock in this city, Congress may not actually renew the law until President Obama’s successor is in office. But the education committee House of Representatives at least got the process started by requesting advice -- and in response to a Friday deadline its leaders set, college and other groups flooded the panel with recommendations for revising the law.

Exhaustively cataloging and categorizing the various proposals will take days, if not more. But consider this article a first pass at identifying some of the key issues and ideas that a range of higher ed groups want to put on the table for Congress.

Not surprisingly, the proposals read in many cases like wish lists – frequently for Congress to authorize more spending for key programs (Pell Grants, work study, funds for minority institutions, etc.).

There are areas of broad agreement – for imposing tougher requirements on states to do their part to finance higher education, for instance, and for reinstating year-round Pell Grants – and some significant areas of acknowledged disagreement, such as whether the desire for comparable data about student progress in higher education outweigh privacy concerns in arguing for a federal database of student academic progress.

Having Their Say

It’s not clear how many groups submitted reauthorization proposals in response to the call by the House Committee on Education and the Workforce, and there are numerous other plans floating around for remaking the federal financial aid programs, including those produced out of the Bill & Melinda Gates Foundation’s Reimagining Aid Design and Delivery effort and another Pell Grant-focused proposal made by a College Board-convened panel.

But Friday’s House deadline brought proposals from several higher education associations, including a consensus document drafted by the American Council on Education on behalf of about 40 college and accrediting groups, as well as individual plans from a pair of community college groups and the Association of American Universities. (A task force of the National Association of Student Financial Aid Administrators has its own draft plan.) Consumer groups such as the Institute for College Access and Success also submitted statements, and the main advocate for for-profit colleges, the Association of Private Sector Colleges and Universities, released its own reauthorization plan several months ago.

What follows is a look at how the groups weighed in on some of the key issues Congress and the Obama administration (which has yet to come forward with its own reauthorization plan) are likely wrestle with as they consider the Higher Education Act.

Pell Grants

For all the talk from think tanks and entities outside higher education about significantly reconfiguring the bedrock financial aid program for low-income students, higher education groups -- pretty much across the board -- want to leave the Pell Grant Program largely alone.

"The Pell Grant program is fundamentally sound in terms of structure and operation, and this is a tremendous achievement given the enormous variety of students and institutions in higher education. Proposals to fundamentally restructure the program should be resisted," the American Association of Community Colleges and the Association of Community College Trustees (in a not-so-subtle tweak to some of the think tank reports) said in their joint submission to the House education panel.

To the extent that the Pell Grant is falling short of its goal of increasing college access, the two-year-college groups and others suggested, that's because Congress has in recent years restrained it for budget reasons in ways that have done harm to some of the country's neediest students.

Virtually across the board, the new crop of proposals urge Congress to restore Pell Grants for students without a high school diploma or GED who can show the "ability to benefit" from a higher education, to restore grants for summer study, and to raise the cap (reduced to 12 semesters in 2011) on the number of semesters for which students can receive a Pell Grant. (The community college groups suggest 14 semesters, the Institute for College Access and Success recommends 7.5 years.)

The associations don't stop at restoring what the Pell Grant Program has lost -- they urge expanding it. Both the for-profit group and the two-year-college associations propose making the grants available to students in short-term programs; APSCU focuses on certificate and licensure programs, while the community college groups suggest that institutions be permitted to use up to 2 percent of their Pell funds for "programs that are not current eligible for Title IV, but which are formally aligned with programs that are. In particular, new forms of remedial education, especially when it is delivered in a modular format, often do not mesh neatly with the Title IV structure."

Student Loans

All of the college groups' statements recognize the extent to which concerns about student debt have permeated the public consciousness (and the agendas of policy makers). But their ideas for addressing it vary significantly.

As with the cuts that Congress imposed on Pell Grants two years ago, the associations almost invariably urge that lawmakers keep the in-school subsidy for federal student loans, in which the government pays the interest on loans while students are in college. The subsidy was eliminated for graduate students and deficit hawks have targeted the benefit for undergraduates.

But the groups also call for giving institutions more authority to limit how much students borrow, amid widespread agreement among them that students are, in many cases, borrowing more than they need to cover personal as well as educational expenses. "Congress should grant institutions the authority to set borrowing limits at lower levels for groups of students based on factors such as the particular program of study, course load or level of academic preparation," ACE said in its letter. (APSCU, NASFAA and the community college groups suggest roughly similar ideas.)

The groups express strong support for consolidating the government's various income-based loan repayment plans into one better, stronger program, and the community college groups, in particular, call for adjusting institutions' default rates based on the proportion of their students who borrow (such that colleges where relatively few students borrow -- like community colleges -- would look better).

Accountability

If the associations' calls for additional funds for Pell Grants (as well as for other student aid programs, colleges that serve minority groups, and college access efforts like TRIO) may reinforce critics' sense that college leaders think more money is the answer to all that ails higher education, the groups' views on consumer protection and regulation may confirm the sense that higher education officials aren't really interested in more government oversight.

The groups, uniformly, acknowledge the government's role in protecting consumers and taxpayers. "Students need clear, concise, and usable information that enables them to make optimal decisions about the college and program that best suits them," the two-year-college associations wrote. "The federal government needs to improve upon its vital role in ensuring that students and consumers receive accurate information about institutions and their programs."

But a consistent theme throughout the letters is that the government's current regulatory efforts are overly complex, duplicative and often overwhelming. Even as they call for pruning unnecessary regulations and streamlining reporting of information about institutional performance, they concede that some new data on student outcomes may be necessary. (The Association of American Universities urges Congress -- before it establishes new reporting requirements -- to "evaluate the results" of the many voluntary reporting efforts that higher ed associations have undertaken in recent years, "to determine whether more useful and appropriate federal metrics can be adopted in the future.")

On the thorny question of whether it is time for the federal government to establish a student-level database to track the performance of programs and institutions, the American Council on Education -- which frequently finds itself in the middle of the competing views of different college sectors -- dodges the question. It notes that proposals to create such a system "embrace complex and controversial ideas" on which there are "divergent views," and that the ideas "ought to and will receive a full and careful consideration" in reauthorization.

The primary group opposing a student records database, the National Association of Independent Colleges and Universities, signed on to the ACE letter, but in its own proposal argues for continuing the federal ban on such a unit records system. "NAICU supported the 2008 prohibition in the interest of protecting student privacy, and we believe the prohibition should be maintained," the association writes. "We do not see the need to re-ignite the debate over student privacy rights; nor do we see the value of investing still more money into building data systems."

The community college groups, which generally support a unit record system, say so (if not forcefully) in their letter: "The federal government must ensure that students are tracked throughout their course in postsecondary education. There are different routes to achieving this end, but the lack of national framework for monitoring student progress, such as a federal unit record database, must be addressed." The two-year colleges, among other things, urge Congress to alter the federal graduation rate to credit institutions for students who transfer to other colleges.

But the group that goes furthest in calling for more accountability is the for-profit-college association. It urges a "fundamentally different approach to eligibility and participation in federal student financial aid programs" that would rigorously measure student outcomes in areas such as retention and progression rates, completion and return on investment, and graduates' employment, earnings and satisfaction.

"Comprehensive, consistent performance indicators that apply equally across sectors of postsecondary education are needed to paint a true picture of the return on investment -- in both time and money -- a student gains through postsecondary education," APSCU wrote in its reauthorization statement. It suggests that Congress establish a demonstration project to develop the right indicators, and possibly create a private nonprofit entity -- with representatives of employers, students, researchers as well as college officials -- to oversee the new accountability regime.

Assorted Other Issues

Among the other ideas and proposals that the groups put forward in their plans:

  • NAICU, the independent-college association, suggests in its reauthorization proposal that Congress consider "amending and expanding the exemption from antitrust restrictions for private, nonprofit colleges for purposes of promoting affordability." College leaders believe that the antitrust proposal could let them collaborate in ways that would allow them to jointly reduce their spending on non-need-based aid, resulting either in increased financial aid for students or lowered tuition prices (or both).
  • On the question of how much the federal government should encourage -- or impede -- efforts to stimulate technological change and innovation in higher education, the groups offer mixed assessments (but generally disagree with the push from some think tanks to let federal aid increasingly flow to nontraditional, or even unaccredited, providers of higher education). "In order to meet the increasing demand for higher education and to meet the changing needs of students, the higher education enterprise is experimenting with and offering new delivery models and technologies," including massive open online courses, the Association of American Universities writes. While these models could be helpful, AAU writes, more experimentation is necessary before the federal government should throw its backing behind them. "We believe that these and other innovative activities should demonstrate their quality before Congress opens up eligibility for the student aid program."
  • The associations generally back the idea that Congress needs to continue (and in some cases step up) its effort to compel states to do their part to maintain their funding of public colleges and students, as lawmakers did in the economic stimulus legislation late in the last decade. "We support a maintenance-of-effort (MOE) provision that would require states to continue to fund public higher education at historic levels. Despite some fiscal sleights-of-hand, the maintenance-of-effort provisions included in the American Recovery and Reinvestment Act provided tremendously helpful financial sustenance to institutions," the community college groups write. "Ideally, MOE provisions would be based on per-student funding levels, rather than aggregate amounts that do not reflect increased enrollment levels."
  • The groups express little appetite for the sorts of dramatic reconfiguring of accreditation that some outside groups advocate. The most dramatic shift contained in this batch of recommendations comes from AAU, which (backed by ACE and the consensus proposal) suggests that accreditors be given the authority to judge institutions differently based on the amount of "risk" they pose to students and taxpayers.
  • The for-profit-college group ends its reauthorization proposal that could send chills down the spine of college leaders who remember Margaret Spellings' Commission on the Future of Higher Education none too fondly: a call for a new panel. "We all agree that higher education faces critical challenges. These range from cost, access, technology and the skills gap to quality, productivity, accountability, and globalization," APSCU writes. "Unfortunately, there seems to be no agreement as to what needs to be done or by whom. A national commission created by the president to look into these issues and provide a plan for the future of higher education could be a valuable tool in keeping us on a pathway for the United States to remain a leader in the global economy."

 

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