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Although some federal higher ed accountability measures have been ineffective, they should be preserved and strengthened, not scrapped, the Department of Education's inspector general says in a report released Monday.
The report's conclusions contradict the approach Republican lawmakers would take to accountability for colleges and universities in House legislation and a Senate GOP white paper. And it appears to give ammunition to critics who argue that a reauthorization of the Higher Education Act must maintain existing protections, especially those targeting for-profit colleges.
The PROSPER Act, which House Republicans advanced out of committee in December, would eliminate separate definitions of nonprofit and for-profit institutions. It would also kill the 90-10 rule, which limits the proportion of revenue a college can generate from federal student aid, and the gainful-employment rule, which holds career education programs accountable for producing too many graduates with debt they can't repay.
The inspector general's report found that both measures could be improved but said the for-profit sector was deserving of special scrutiny.
"As the OIG has testified before Congress on issues involving proprietary schools over the years, the sector continues to present itself as a high-risk area for the Department," the report says. "This sector, unlike public and nonprofit schools, must produce profit for owners and stockholders, which can create an incentive to evade compliance with obligations to students and taxpayers."
The report found that eliminating existing accountability rules without a proven substitute would create higher risks for students and taxpayers, including loan defaults and loan discharges that would hurt long-term viability of federal programs. But a single loan repayment metric offered by the PROSPER Act would require massive data collection and be subject to manipulation, the report found.
