College Quality

Last week, Higher Ed Watch took a look at some of the gainful employment policy questions raised in the over 900 public comments submitted to the Department of Education. While policy discussions will ultimately be the most important considerations as the regulatory process moves forward, it's also important to remember that these issues do affect real people. So today we're looking at what some current and former students at these programs had to say in their comments.

Ambition and hope do not pan out in Wisconsin

For many low-income and non-traditional students, going to college can be a source of hope and a chance for a better life, even in spite of fears about not having succeeded academically in the past. That sense of opportunity is prevalent in a combined set of 13 comments from students who now appear to be enrolled in courses at Milwaukee Area Technical College. These comments almost all start on a hopeful note with a sense of excitement for a better life. Many detail previously unachieved academic successes in these programs--high grade point averages, scholarship-winning essays--the type of accomplishment that shows they are college-caliber material. But then the reversal--a degree with no return, a dispute over further debts, no change in status--that leaves them arguably worse off and in debt. (The original comments have been temporarily taken down from Regulations.gov with a request to remove personally identifiable information, so I created a redacted version here.) 

A story from one woman who enrolled at Sanford Brown to become a probation officer encapsulates this emotional roller coaster:

I was so excited about going to Sanford Brown College. I was sold because I was told I could get small class sizes and get extra help if I needed and graduate faster because the courses were 5 weeks long and you went to school year round until you graduated. 

...

I went ahead and took the admissions test and paid $50.00 for it. I was told by the financial aid personnel that I could also write a 500 word paper on why higher education was important and win a $1,500 scholarship. I won the scholarship because of the paper I wrote. I was so excited and proud of myself. I was looking forward to the wonderful future my 3 kids and I were going to have. I was going to finish college and finally have a career which I loved which was helping people. I was assured by all the admissions people at Sanford Brown College that I had made the right choice to attend that college. They all were so friendly and seemed to want this as much as I did.

 

Signs some schools are taking steps to improve--is it enough?

Circle September 9 on your calendars. That's the date according to a Federal Register notice published yesterday that the Department of Education will bring together a committee to develop new regulations defining gainful employment. While it had been clear since a notice published in mid-May that the Department was going to be considering gainful employment in its next round of rulemaking, yesterday's announcement provides exact timing for negotiations, as well as the types of negotiators to be considered. 

With the first negotiating session still not for several months, it is going to be some time before the Department puts forth any public proposal, but with more than 900 public comments already submitted in response to initial thoughts on the regulatory agenda, there's already some clear indications of what we can expect to see from a policy standpoint. In a separate post I'll put up some of the more interesting comments received from students. (New America also submitted its own comments on the regulations, which can be found here.)

Arguments in favor--stronger, more comprehensive

By far the largest number of comments came similar short submissions calling for a stronger rule and protections for students and taxpayers (see here for an example). On the more substantive side, a few themes emerged:

The gainful employment rule should be stronger: Multiple comments cited the 2011 rule's "nine strikes and you're out" policy whereby a program had to fail each of three measures for three years straight as being overly generous. Several comments called for initiating penalties for programs that failed two out of the three measures. Others, such as those from The Institute for College Access and Success argued for a higher threshold on the repayment rate based upon prior studies of delinquency and default as well as how Congress set thresholds for cohort default rates. Not surprisingly, among the most thoughtful and creative comments were those from Robert Shireman, the former Department official who helped craft the initial set of regulation. Shireman's comments suggested a new structure that would draw distinctions between institutional and program eligibility depending on repayment rates, with debt to earnings tests used if repayment rates fell below a certain level.

Accountability in this space is about more than just gainful employment: Many comments touched on the idea that gainful employment is only one piece of an accountability framework that also includes cohort default rates and the 90/10 rule. Given that, many commenters stressed the need for the Department to address the use of deferments and forbearances by some institutions to keep their default rates low by limiting the number of students that could default during the measurement window. Similarly, commenters also stressed the need to consider tactics like delaying the disbursement of student aid funds so some dollars would not count as part of the 90/10 calculation for a given year.

Relief for borrowers at failing programs: The final gainful employment regulation never included any relief for borrowers that had debt from a program that eventually lost eligibility on the grounds that discharge requirements were statutory and could not be changed. This time, several comments, such as those from the National Consumer Law Center, stressed that borrowers in programs that lose eligibility should be given relief much the same way that those who attend institutions that shut down receive assistance.

Job placement matters: The comments also included several submissions from attorneys general from states such as Colorado, Illinois, and Kentucky. One issue these focused on is the importance of greater clarity in definitions of successful job placement. Inaccurate, misleading, and outright fraudulent have been an ongoing problem at some proprietary institutions for many years, but the lack of a clear definition can make enforcement of the issue more complicated (the Department's National Center for Education Statistics did hold a technical review panel on creating a definition a few years ago, but did not end up putting together a definition).

Arguments against--wait for reauthorization 

Not surprisingly, there was a pretty clear divide on whether the Department should approach the gainful employment rule again, and what to do so if it does. In general, proprietary colleges and their lobby groups argued that the Department should delay action on the grounds that Congress would be scheduled to reauthorize the Higher Education Act in short order (see page 2 of the comments from the industry's main lobby group, the Association of Private Sector Colleges and Universities for a typical form of this argument). Since reauthorizations these days have a cicada-like periodicity  that's effectively calling for a delay of many years.

In a similar vein, several institutions also brought forward the idea that the gainful employment rule should be applied to all types of institutions, not just a subset of programs at public and private nonprofit institutions and essentially all programs at proprietary colleges. DeVry and LIM College had the clearest forms of this argument, while Strayer University took a slightly different approach, arguing why it resembles other institutions that are not subject to the gainful employment requirement and should thus be excluded. (Whether including more programs is legally allowable, a good policy idea, or just something that would be designed to get other sectors of higher education opposed is debatable.) 

By far the two most thoughtful and interesting comments from those opposed to gainful employment came from Strayer University and Champion College Services, which provides default management and would have provided gainful employment support if the rule were still in effect. Strayer's comments suggests relying on the cohort default rate to set thresholds and penalties, while Champion put forth an argument for creating a repayment rate that is based on the number of borrowers, not dollars, and define "repayment" as not being in default or more than 120 days delinquent. Other ideas more commonly raised included allowing institutions to limit the amount of debt a student can take on and risk-adjusting the measures based upon the characteristics of students enrolled. 

Not surprisingly then, we're already clearly headed for a pretty significant divide on the policy questions in gainful employment. In a subsequent post I'll pull out some of the more interesting submissions from former students and faculty at proprietary institutions. 

With the economy stuck in neutral, tuition prices and student loan debt skyrocketing, and parents and students increasingly questioning the value of a college degree, our public institutions urgently need a different approach to the challenge or educating an increasingly diverse mix of students at a reasonable cost. Today, New America's Education Policy Program released The Next Generation University, a policy report about the future of public higher education. The report comes at a time when too many public universities are failing to respond to the nation's higher education crisis. Rather than expanding enrollment and focusing limited dollars on the neediest of students, many institutions are instead restricting enrollments and encouraging the use of student-aid dollars on merit awards. But, according to the report, some schools are breaking the mold by boldly restructuring operating costs and creating clear, accelerated pathways for students.

For more than 100 years, the time-based credit hour has been the currency of higher education. Originally created to calculate eligibility for Andrew Carnegie’s free faculty pension system, the credit hour evolved to become much more. Entire systems have been built around and upon the time-based credit hour, including the economic lifeblood of many colleges and universities—federal financial aid. But today, the U.S. Department of Education approved Southern New Hampshire University’s (SNHU) College for America (CfA) to be the first program in the country to receive federal financial aid based on “direct assessment” of student learning, rather than the credit hour. This move from the federal government could signal a new era for higher education—one in which we value and pay for learning rather than time.

Southern New Hampshire University, a small, private liberal arts institution, is familiar with pushing the boundaries of what is possible. Over a decade ago, it added a three-year competency-based bachelor’s degree to its regular course offerings. Rather than squeeze four years of “time” into three years through summer and weekend classes, the faculty identified the core competencies students should have upon graduation and then wove those competencies into every course and assignment. By looking at the program holistically, rather than just as a combination of courses, the school was able to eliminate redundancies in the curriculum and focus on what students were expected to learn and do.

A federal district court judge dealt a huge blow yesterday to the U.S. Department of Education’s efforts to regulate the for-profit college sector. More broadly, the court’s decision in the case, which deals with the Department’s Gainful Employment regulations, could make it much more difficult to bring greater transparency and accountability to higher education as a whole.

The roots of this case go back to June when the federal district court vacated some of the Department of Education’s Gainful Employment (GE) regulations. While the judge affirmed the department’s authority to regulate on GE and held up requirements that GE programs disclose information like median debt to students, he found that one of the three measures used to determine whether a program prepared students for gainful employment -- the student loan repayment rate -- “lacked a reasoned basis.” And since the judge concluded that all the metrics were intertwined, he threw them all out. With no metrics to report, the disclosure requirements included in the regulations were also effectively eliminated.

The Department went back to the court and asked the judge to reinstate the reporting requirements so that it could implement the disclosure provisions of GE (without program-level information, disclosure would be impossible to achieve). In yesterday’s decision, the judge denied this request on the grounds that the reporting requirements would violate one of the worst laws in the history of higher education: the federal ban on a student unit record system.

As I wrote on Tuesday at Higher Ed Watch, the recently introduced “Students First Act” would require the U.S. Department of Education to automatically conduct program reviews of colleges that are most at risk of violating federal law. But this is only one way in which the bill, which was sponsored by Democratic Senators Frank Lautenberg of New Jersey and Tom Harkin of Iowa, would strengthen the tools that the Education Department employs to protect the integrity of the federal student aid programs and safeguard students from unscrupulous schools. Here are some key features that would greatly enhance the Department’s oversight and enforcement authority and provide relief to students who have been harmed.

The bill would:

• Hold School Executives Accountable for Compliance

Under the measure, college presidents, chief executive officers, and chief financial officers would personally sign the student aid program participation agreements that the Education Department enters with their schools. They then would be held liable if their schools “knowingly and willfully” violated the agreements, or engaged in “gross negligence.” In such cases, these officials would be fined an amount equal to their yearly compensation, and they would be barred from working at another college that participates in the federal financial aid programs for at least five years.

Does the U.S. Department of Education have the guts to enforce its own federal student aid program integrity rules? Judging by the Department’s record and legislation recently introduced by Senate Democrats, entitled the “Students First Act,” the answer to that question appears to be “No.”

During President Obama’s first term, administration officials went to great lengths – and spent a substantial amount of political capital – to strengthen the agency’s authority to crack down on schools that deliberately mislead students into enrolling. Yet, the Department has shied away from using these expanded powers, even when evidence of abuse has been delivered to the agency on a silver platter.

Career Education Corporation is a case in point. In the fall of 2011, the publicly-traded for-profit higher education company revealed that a significant number of its schools had been cooking the books on the job placement rates they were disclosing to prospective students. But despite this remarkable admission, the company didn’t receive even a slap on the wrist from the Department.

Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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Poor Scholars Hit by Money Squeeze From Wealthy Colleges, Janet Lorin
Bloomberg

It’s the classic game of bait and switch: Low-income student gets accepted to a selective, high-tuition/high-aid college, only to have institutional aid taken away once awarded an outside scholarship. This practice, known as displacement, reduces the grant aid awarded to students who win outside scholarships, giving aid to other students. Furthermore, many students find they can’t apply their scholarship funds to summer savings requirements. At Barnard, for example, students must save about $2,200 over the summer to help cover costs of their education that cannot be covered by scholarships. The National Scholarship Providers Association, a group whose 320 members include the Gates, Coca-Cola Scholars, and Michael & Susan Dell Foundations, argues that if a college rescinds funding because of outside scholarships, it “takes away a reward that the student earned through hard work and concentrated effort.”

Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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Obama, Rubio Put Higher Education on Notice, David Wessel
The Wall Street Journal

Senator Marco Rubio and President Barack Obama may not agree on much these days, but they do agree that the way the federal government spends money on student aid needs to change. In this year’s State of the Union, President Obama called for incorporating measures of value and affordability into higher education’s accreditation system or establishing a path to alternative accreditation for nontraditional providers. Senator Rubio, in his response to the State of the Union, said, “We need student aid that does not discriminate against programs that nontraditional students rely on—like online courses or degree programs that give you credit for work experience.” While it is unclear how and when accreditation could be changed, something needs to update the archaic 19^th century practice and bring it to the 21^st century. “The focus by Mr. Obama and Mr. Rubio on accreditation suggests a worry that the old system could stifle innovation,” writes Wessel, “And prevent competition from new, perhaps more efficient forms of teaching.”

Starting in 2014, the Affordable Care Act (ACA) mandates that employers with more than 50 employees must provide health insurance to those working more than 30 hours per week. To prevent having to give their employees proper benefits, Papa John’s Pizza voiced intent to cut the hours of employees to fall just below the 30 hour threshold.  Customers expressed reprehension at the prospect of the pizza giant further limiting the earnings of its lowest income employees in the name of corporate revenue. The public backlash was so powerful that Papa John’s founder and CEO, John Schnatter walked back his loophole planning, but it remains to be seen whether universities—American cultural bastions of fairness and opportunity—will fare differently. The government has hedged on behalf of adjuncts, but the question of whether and to what degree universities will ultimately be allowed to implement similar plans to fudge compliance with the ACA remains unresolved.