WASHINGTON -- A congressional hearing here Wednesday was the latest illustration of what has, in recent years, become a bedrock reality of the politics of higher education at the federal level: lawmakers across the political spectrum want to hold colleges more accountable for student outcomes.
Democrats and Republicans on the Senate education committee were in agreement that the government’s existing accountability metrics, like default rates, are inadequate. And nearly all backed the concept of risk sharing -- the idea that individual colleges need to have a greater financial stake in what happens to the federal loans that students use to attend their institutions.
For all the bipartisan rhetoric about risk sharing, though, Wednesday’s hearing also showed that hammering out the details of a new accountability regime won’t be easy.
Senator Lamar Alexander of Tennessee, the Republican who chairs the committee, said that he was “seriously considering” including some type of new risk-sharing program in his rewrite of the Higher Education Act.
Alexander first floated the idea in a series of policy papers he released earlier this year. One approach he is eyeing would require colleges to pay back to the government some share of the defaulted loans of its former students.
Several Democratic Senators -- Rhode Island's Jack Reed, Illinois's Dick Durbin and Massachusetts's Elizabeth Warren -- have also introduced a risk-sharing proposal along those lines. Their plan, which they first introduced in 2013, would require colleges to repay a share, based on a sliding scale, of the defaulted debt of their graduates.
The Democratic plan carves out certain exemptions for colleges that have low rates of borrowing. That would likely benefit many community colleges.
Alexander called the Democrats’ plan on Wednesday “an important framework worth considering.” But he said he wants any risk-sharing plans to apply to all colleges, even though the plans might have to be structured differently for different types of institutions.
Alexander also said that requiring colleges to have a greater stake in the outcomes of their students -- along with the power to limit students’ borrowing -- would reduce overborrowing.
Federal law currently treats access to student loans mostly as an entitlement. Colleges have little authority to limit the amount of money that students take out in loans. The issue has created a rare agreement between community college leaders and for-profit college supporters, who are both pushing Congress to give them the ability to curb their students’ borrowing.
“It’s clear that some students borrow too much,” Alexander said.
The Obama administration, too, has expressed some interest in the idea of letting colleges limit borrowing. The U.S. Department of Education has waived existing rules for some colleges that want to experiment with borrowing limits.
But not all student and consumer advocates agree that overborrowing is a widespread problem that is driving up student loan debt. More often, those advocates say, low-income students are dropping out of college without a degree because they can’t afford the cost of college and the living expenses they incur while pursuing their studies.
Allowing colleges to limit students’ access to federal loans would only exacerbate that problem, they argue.
The Institute for College Access and Success and other groups said in a letter to lawmakers on Tuesday that a better approach might be prorating federal loan eligibility for students who attend college only part time.
Currently a part-time student can access just as many federal loan dollars as a full-time student. Pell Grants, however, fluctuate based on the number of credits a student is taking.