Two senators join the increasingly crowded Washington bandwagon for alternative forms of higher education to have access to federal funding. They also want college aid tied to institutional performance.
The federally appointed committee tasked with rewriting the Obama administration’s “gainful employment” regulations will continue its deliberations in December, an Education Department official said on Wednesday. Negotiations over the rules were slated to end Wednesday, but members of the panel were not close to reaching an agreement after more than five full days of debate over the last several months. The committee is charged with rewriting rules that were blocked by a federal judge earlier this year.
The regulations would condition federal student aid to career-training programs at for-profit and community colleges on their ability to meet certain standards. The department is proposing metrics that would judge graduates’ earnings relative to their earnings, the rate at which former students default on their student loans and whether former students are paying down at least the interest on their loans.
Negotiators were still at odds Wednesday over how those standards should be set, which programs ought to be exempt, and what information schools should be required to disclose to students.
Representatives from for-profit and community colleges said the rules would unfairly harm their institutions, punishing them for enrolling low-income and otherwise disadvantaged students. Several members of the panel have also said they cannot effectively discuss the department’s latest proposal, which is more stringent than previous drafts, until the department releases an analysis of how the rules would impact institutions.
Department officials have said they are in the process of producing that data on how many programs would pass or fail under its proposal. John Kolotos, the department's representative on the committee, told negotiators Wednesday that the data would be available before the next meeting in December. That session has not yet been scheduled. The department would be bound by a set of regulations that the panel unanimously supports but would be free to push ahead with its own proposal if negotiators failed to reach an agreement.
The U.S. Education Department announced Tuesday its plan to convene a panel of negotiators to hammer out new regulations on how colleges disburse federal student aid and rewrite a controversial rule requiring online programs to obtain permission from each state in which they enroll students.
The negotiated rule making committee is also expected to tackle the underwriting standards for PLUS loans, the conversion of clock hours to credit hours when awarding credit, and rules governing when a student can receive federal aid for repeated coursework, according to a notice set to appear in Wednesday’s Federal Register.
The department plans to appoint negotiators who represent various constituencies, including students, consumer advocates, businesses, state officials and representatives from different types of institutions. It is currently seeking nominations for members of the committee. The panel will meet for three, three-day sessions in February, March and April, the department said.
The list of topics announced Tuesday, while tentative, largely round out the remaining issues that the Obama administration had announced as regulatory priorities for its second term. The department has already announced its plan to hold a separate negotiated rule making session in January to write new campus safety rules. It is also in the process of negotiating a rewrite of the “gainful employment” rules on for-profit and community colleges that a federal judge blocked earlier this year. That committee met Tuesday for its penultimate day of negotiations and appears destined to finish its work without reaching consensus on a set of rules, leaving the department in the position of being able to impose its own rules.
Members of Congress this week heard from higher education advocates and researchers on ways to restructure the federal government’s student aid programs as lawmakers continue their series of hearings on reauthorizing the Higher Education Act. The education committees in both chambers convened separate hearings Wednesday and Thursday to discuss various ways to change federal student aid. Lawmakers heard about simplifying the administrative barriers for students applying for aid, restructuring Pell Grants to better incentivize completion, and improving income-based repayment options for student borrowers.
Lawmakers on both sides appeared to be in agreement that the application process to apply for federal aid needs to be simpler. Both Senators Tom Harkin and Lamar Alaxander, respectively the Democratic chair and Republican ranking member of the Senate education committee, said Thursday they believed there was a general consensus on simplifying the process by which students apply for federal aid.
Proposals on simplifying how the federal government doles out billions of dollars in grants, loans and education tax credits each year, meanwhile, are likely to be more fraught.
Today the Senate is holding a hearing on student aid and college access with a focus on simplification, in advance of the upcoming reauthorization of the Higher Education Act. Focusing on streamlining federal student aid and making the various programs more flexible is a well-reasoned approach in a fiscal environment where increases in federal funding for the programs appear unlikely. Here are three recommendations policy makers can apply immediately to simplify programs and increase college access:
1. Better align financial aid applications with college admissions by using prior-prior year
Each year a student is enrolled in postsecondary education, he or she must submit a FAFSA to be considered for federal student aid (grants, loans, work-study). Under the current structure, the FAFSA becomes available Jan. 1 and requires tax information from the prior year (PY). However, most students and families haven’t even filed their taxes by then, making it difficult to complete the form in totality. This delay can cause an unfavorable chain reaction: a delay in submitting the FAFSA due to lack of tax information can result in a delayed financial aid award letter, which in some cases could lead to a reduced amount of financial aid, at least when it comes to aid that is awarded on a first-come, first-served basis.
The use of prior-prior year (PPY) income on the FAFSA would have multiple benefits for students and families. These benefits include the ability to: file the FAFSA earlier, often at the time they are applying to college; make better use of the current IRS data retrieval tool, which allows automatic population of a student’s tax return data; receive notification of a financial aid package earlier; and streamline the college-going process by applying for financial aid the same time they are applying for admissions.
This would be welcome news for students who need financial aid the most -- who also happen to be the most likely to miss current financial aid deadlines and overestimate college costs, according to a study by researchers at the University of Illinois at Chicago and an Illinois financial aid official.
The best part? The U.S. secretary of education was already given the authority to implement PPY over five years ago, so Congressional action is not needed to implement this idea.
While there are some concerns about using PPY as a proxy for current financial strength, it is important to remember that prior year information is also a proxy. The National Association of Student Financial Aid Administrators recently released a study on the impact of using PPY data and found that for most of the lowest-income students, using PPY versus PY did not greatly impact the amount of Pell that a student received.
2. Implement an early Pell notification, or “Pell Promise”
Low-income students often decide at an early age that college is too costly and therefore just “not for them.” Enrollment data underscore this pattern, with 52 percent of low-income high school graduates enrolling in postsecondary education compared to 82 percent of high-income graduates, according to the National Center for Education Statistics. Even for low-income students who do go on to college, many are self-selecting out of competitive or elite schools that would have been less expensive than where they ultimately attend. (This issue of "undermatching" has recently attracted significant attention from President Obama, as well as the first lady.)
One recent study of a sample of high school valedictorians found that only 50 percent of those from low-income backgrounds even applied to a selective university, compared to roughly 80 percent of the valedictorians from upper-middle and high-income families. Unfortunately, when a student decides early on that higher education is not an option, it impacts their high school coursework choices and college enrollment behaviors.
A “Pell Promise” -- a commitment of funds from the federal government as early as the ninth grade -- would make low-income students aware of their Pell grant eligibility in much the same way that the Social Security Administration disseminates information to citizens about the amount of social security they can expect in retirement.
While not technically a promised income, Social Security statements allow individuals to plan for an eventual retirement. A Pell promise would assure low-income students that a specific amount of funds would be available to them upon successful completion of high school and incentivize early college-going behaviors and patterns. Early studies from similar state-based programs, such as the 21st Century Scholars Program in Indiana, have shown that when students and parents know there are funds available to them for higher education, there are noticeable increases in college preparatory coursework and college going rates.
Identifying low-income students early would not be difficult given IRS data and other federal and state means-tested benefit programs. This change would also be easy to implement since the Higher Education Opportunity Act (HEOA) already authorized a similar demonstration program, although funds were never appropriated to fulfill the program.
3. Provide flexibility in the Pell Grant program through a “Pell Well” of funds.
The current system of Pell Grant delivery is based on the traditional spring/fall calendar and the traditional student. A student may wish to move through their program at an accelerated pace by taking courses each summer, yet under the current Pell Grant rules, that student would run out of Pell eligibility and be forced into loans to cover academic costs or defer additional enrollment until the next year. This structure is outdated and confusing to families, particularly as nontraditional students and innovative programs with nonstandard academic calendars proliferate.
To increase flexibility and encourage students to complete at a quicker pace, lawmakers could implement a Pell Well system, whereby a student’s lifetime Pell Grant eligibility would be calculated when the student initially applies for aid. The student would then be able to draw funds from their well of Pell Grant at their own pace, not to exceed a certain amount per payment period.
This is different than how Pell eligibility is currently calculated, which is based on telling students annually how much they qualify for in Pell funds and then trying to explain future Pell eligibility as a percentage of full time enrollment. Students and parents understand dollars, not percentages, and they increasingly require predictability and flexibility. Such a change would both simplify and streamline the program, and incentivize continuous enrollment and higher retention and graduation rates.
As Congress considers various proposals through HEA hearings, and as grant makers and college access advocates continue to think of ways to reimagine student aid, we should remember that manageable and realistic changes like these could have a huge impact on college access and success.
Justin Draeger is president and CEO of the National Association of Student Financial Aid Administrators.
Children with professional parents are about three times likelier than those with working-class parents to be admitted to the most selective universities in England and Australia as well as the United States, according to a study reported by Times Higher Education. The study, produced in conjunction with a conference sponsored by the Sutton Trust, a British philanthropy focused on educational access for those with low-income backgrounds, concludes that while a significant portion of the gap in access can be explained by differences in educational preparation, about a quarter of it cannot.