In a recent New York Times op-ed, Senator Lamar Alexander (R-Tenn.) outlined his three-part proposal for reauthorizing the Higher Education Act (HEA): simplify the FAFSA, restructure and streamline student loan repayment, and hold programs accountable for student loan defaults.
Holding programs accountable for student loan repayments is, arguably, the most critical part of Sen. Alexander’s proposal. Although federal spending on higher education has expanded access, it has also had an unintended effect. Federal funds are available on a pay-for-enrollment basis: schools receive government-subsidized tuition payments for each course in which a student enrolls, regardless of whether that student successfully completes the course, or whether that course helps them make progress toward a degree. The exclusive focus on enrollment means that federal funds are responsible for keeping programs with low course-completion and dismal graduation rates afloat.
Funding also is not tied directly to a program’s track record of placing students into good jobs, and inevitably, many students end up with debt that they struggle to repay—over a million new defaults every year.
Fleshing out Sen. Alexander’s critical accountability system proposal, here are a few of the overarching considerations lawmakers should take into account:
Consideration: A focus on multiple outcomes for accountability.
Starting with a student’s ability to pay off student loans is a good first step toward thinking of institutions not as a set of inputs, such as faculty degrees and shared governance, but of outcomes. Besides a student’s ability to repay their student loans, other outcome measures appropriate to each school’s mission should also be part of the accountability equation, such as learning assessments; graduation rates; student employment outcomes; salary growth; return on investment (for both students and taxpayers), and graduate satisfaction.
Consideration: Better data.
Higher education data today is collected by colleges and universities themselves and is largely self-reported. If a student attends multiple institutions, a reliable record of his experiences is weak at best. This makes it nearly impossible to assess the performance of schools. Do low graduation rates mean that colleges are failing students? Or are some institutions helping students traverse an expensive higher ed landscape in an affordable way? We have no idea. Collecting data at the institutional level also means that we know very little about which programs at each school are effectively equipping students with the skills they need to succeed—and which are not. This makes it very hard for students to make good decisions about where to attend school. While there are school rankings for some majors, these ranking systems are input driven, and say little about the outcomes students can expect to achieve.
The best system would be one that counted all students, tracked their pathways through higher education (potentially across multiple institutions), gave us program level information, and information on outcomes after college. This is called a student-level data system, and it’s a contentious issue among lawmakers—but fairly straightforward for almost everyone else, including key student advocacy groups like Young Invincibles. A more transparent higher education system would allow families to make better decisions about how they invested in college, and it would give schools an incentive to innovate against the outcomes that matter to students.
Consideration: Accreditation should focus on outcomes.
Accreditation opens the door for institutions to participate in federal financial aid programs. If an institution can’t meet the quality standards of accreditors, its students can’t take out federal loans. Right now, the accreditation process is almost entirely input-based, meaning that it assesses the resources and processes that institutions have in place, but doesn’t assess the outcomes that students experience.
Congress should go one step further in its accountability reform, tying accreditation to outcomes and designing an accreditation system that is friendlier to innovation across new instructional models and/or new business models in higher education. Accreditors should be encouraged to focus primarily on whether institutions are creating value for students. Schools that do should be given wide latitude in how they do so. Institutions that do not create value for students should be heavily scrutinized.