U.S. Department of Education

On Wednesday, the House Education & Workforce Committee convened to debate Chairman John Kline's (R-MN) proposed Elementary and Secondary Education Act reauthorization. Ranking Member George Miller (D-CA) also proposed his own version of the bill. ICYMI, here's the play-by-play.

Click here for the Storify of last week's Senate HELP Committee markup.

Click here for the Storify of last week's Senate HELP Committee markup.

Last year the U.S. Department of Education tightened eligibility requirements for federal PLUS loans, leading to a significant increase in rejection rates, from 28 to 38 percent.  Many families and higher-education institutions were shocked to find that parents approved for Parent PLUS loans one year were suddenly denied the next. Some sectors, like historically black colleges and universities (HBCUs), were hit harder than others. In response to concerns over the changes, the Education Department added PLUS loan eligibility criteria to a list of potential topics to be considered for regulatory action. As part of this process, the Education Department asked for written comments and held four public hearings to allow individuals to provide testimony. One of these hearings was held at Spelman College, an HBCU in Atlanta. I attended the day-long meeting, where scores of representatives from HBCUs criticized the changes made to the credit requirements for Parent PLUS Loans.

The testimony from the president of Clark Atlanta University was representative of the day’s tone: “The drastic decision to change the credit regulations for Parent PLUS loans without effective evaluation of its impact nationally and specifically on HBCUs and without prior communication and input has resulted in a tornadic effect …A one-year drop in over 50 percent of approved Parent PLUS applications, [and] more than $50 million in revenue lost.” It was a storyline repeated throughout the day—not only did the PLUS loan change inhibit access to college for low-income students, but it also caused institutions to lose millions of dollars in revenue.

While the Department of Education was opaque in the changes it made to the credit requirements that caused the rug to be pulled out from under many students, the subsequent bad publicity surrounding the Department’s bungled implementation masked an equally important part of the PLUS loan story. The changes were modest and were meant to prevent overburdening low-income families with significant amounts of debt.

The Department was right in trying to prevent parents from borrowing loans they cannot afford. Unlike federal student loans, Parent PLUS loans are borrowed by parents. PLUS loans allow parents whose children are already eligible for student loans to borrow even more. Since parents are investing in the future of their child, not in their own human capital, it means that their earnings—and the ability to repay loans—are largely unchanged by their child’s education. Since parents don’t receive direct financial benefit from the loan in terms of increased income, it’s not good federal policy to saddle parents with debt they can’t afford—debt that is seldom dischargeable in bankruptcy and that doesn’t qualify for the protections of other federal student loans, including a lower interest rate and income-sensitive repayment.

While it makes sense for the federal government to provide students access to loans without consideration of their current ability to pay, this should not be the case for parents. Because an “Ability to Pay” metric is not currently included in approval for Parent PLUS loans, the Department had to figure out other criteria to identify whether parents could pay off these loans. Before October 2011, prospective parent borrowers couldn’t have any current accounts more than 90 days delinquent, or any foreclosures, bankruptcies, tax liens, wage garnishments or defaults in the past five years. After October 2011, the Department expanded its definition of what was considered a 90-day delinquency to include accounts whose most recent status was “in collections” or “charged off” in the last five years. This means that if a parent went into collections in the past five years and fixed her status, then she would be approved. But if a parent went into collections within the past five years and never managed to rehabilitate the status—indicative of continued financial troubles—she would be ineligible for a Parent PLUS loan. Even though she would not be able to borrow, her child is still able to borrow $9,500-$12,500 in federal Stafford loans depending on the student’s year in school.

Most of the HBCU representatives at the hearing urged the Department to return to the pre-October 2011 credit standards for PLUS. They provided anecdotes of students and families who were denied access to college once they were denied a PLUS loan. But these anecdotes often did more to highlight the problematic nature of the Parent PLUS loan program as providing pure revenue to the institutions on the front end with no institutional accountability on the back end.

The sole parent in attendance, a Spelman alumna, was the only one to point out that the cost of an HBCU education, and college in general, has increased greatly during a time when wages have been stagnating. “We want our students to attend the schools we’ve been to but they’ve become very expensive,” she said. “While my student was attending, we were getting angry with the school for going up so much for tuition.” If the mission of an institution is to serve a specific group of students, and those students and their families are being priced out, then the institution must have a difficult conversation about how to provide an education for the students they have at an affordable price. Instead, institutions use these loans to kick the “affordability” can down the road at the expense of parents.

An administrator from North Carolina A&T, offered one of the final comments that highlights this unfortunate mission drift at HBCUs, “A PLUS loan is the mechanism to offer all students a higher education. We have to remember that this is not a hand out, it is a loan. The students and parents must pay them back, we just need to be able to pay it forward so that they have an opportunity to attend, matriculate, and graduate so they become positive vehicles in moving our economy forward.”

It seems that one person’s loan is another’s grant. PLUS loans act like grants to institutions that parents are on the hook for repaying. A Parent PLUS loan should never be the mechanism to a college education. So many other programs exist—from the Pell Grant to Stafford loans—that are meant to help students pay for college. No student should be expected to move the economy forward by burdening their parents with unaffordable debt.  

Stay tuned to Higher Ed Watch for the continuing coverage of the Parent PLUS loan crisis at HBCUs.

After the partisan markup in the Senate Health, Education, Labor, and Pensions Committee, it is the House of Representatives' turn to debate reauthorization of No Child Left Behind. The Student Success Act, offered by Rep. John Kline (R-MN), is set for a markup Wednesday morning in the House Education and Workforce Committee. Accordingly, we’ve updated our Senate markup cheat sheet to provide a comprehensive, side-by-side comparison of current law, the Obama administration’s waiver policy, and the current legislative proposals in the Senate and House. You can download the new cheat sheet here.

Here are a few of the highlights from the Kline proposal:

• The Student Success Act would eliminate over 70 programs and consolidate many stand-alone programs (for instance, Title III for English Language Learners) into Title I, with flexibility for states and districts to shift money between them. The bill would also eliminate maintenance of effort requirements, meaning states and local school districts would not be penalized for spending less on required education programs.
• Kline would not require states to adopt college- and career-ready standards, but they would have to maintain academic content standards – and aligned assessments – in reading, math, and science. And the bill includes really specific language, over and above the Alexander proposal, to prohibit the federal government from promoting participation in the Common Core State Standards initiative in any way.
• The bill, similar to the Alexander proposal, would allow states to design whatever school accountability and improvement systems they want, including setting performance targets (if any). Kline would also clamp down on the Secretary of Education’s authority to offer waivers to states and districts in exchange for external conditions.
• Kline, however, would be more prescriptive than either Harkin or Alexander in one area: teacher evaluations, with states required not only to develop them, but also to use the results to make personnel decisions.
• Kline would not allow Title I funding to follow the child to other public or private schools, but there is speculation that a backpack funding provision could be added to the Student Success Act at a later point. House Majority Leader Eric Cantor (R-VA), for example, has expressed an interest in some sort of portability provision.

Stay tuned to Ed Money Watch and Early Ed Watch for continuing coverage of these bills and the markup, as well as any alternative proposal from Rep. George Miller (D-CA), the Ranking Member on the House committee. And be sure to follow the markup on Twitter with me, @afhyslop, and my colleagues @LauraBornfreund and @ConorPWilliams

Earlier today, U.S. Secretary of Education Arne Duncan weighed in on the question of whether states can delay their timeline for using Common Core assessments in accountability systems for schools and teachers. The tests are set to be fully deployed during the 2014-15 school year, and according to the original policy for offering No Child Left Behind waivers, the results from the assessments would also be used for school accountability and educator evaluations that year (except in states that applied for waivers after August 2012 – see this nifty chart for a full breakdown). Under the new policy, however, states would be able to apply to hold off using the evaluation results for personnel decisions for an extra year – meaning that, in some states, the results from the 2014-15 year would be used to provide feedback and inform professional development only.

The question of whether to “pause” or place a “moratorium” on Common Core implementation has divided education stakeholders. Fifteen organizations, including the American Federation of Teachers and National Education Association, support a moratorium on high-stakes accountability (including student promotion and graduation policies, personnel decisions, and school improvement designations) associated with the Common Core. Instead, these groups - the Learning First Alliance - would like to focus all immediate efforts on improving the supports teachers have to adopt the Common Core, including professional development, curriculum, technology infrastructure, and other resources. On the other hand, Chiefs for Change – a group of eleven reform-minded chief state school officers – urged Secretary Duncan to maintain the Common Core implementation timeline, even for high-stakes decisions, noting that states made these commitments years ago and should not backtrack on accountability.

Others took a slightly more measured approach, but still supported a pause on some components of implementation. The Council of Chief State School Officers asked for state flexibility in three areas: school ratings, teacher evaluations, and which assessments to use for accountability during 2013-14. Some states could maintain the rigorous timelines laid out in their waiver plans, while others could choose to slow down on one or all of these components.

And it appears that Secretary Duncan chose to take the CCSSO route, more or less. States could apply – if they want – to delay the most serious consequences for teachers, like decisions to award tenure or dismiss staff, for one year. Additionally, states would have new flexibility for implementing assessments and school accountability systems. They could apply to use either existing state assessments or Common Core field test results for accountability in the 2013-14 school year (to avoid the so-called “double testing” problem).

While Secretary Duncan insisted the new policy is not a “pause” or a “moratorium” on Common Core, it’s hard to distinguish between an “extension” – the language used by the Department – and a “pause.” No matter what you call it, the requirement for waiver states to use evaluations for personnel decisions can be shelved for a year. And there is no question that states have had a lot of time to fully transition to the Common Core – in most cases, over four years, longer than they had to implement all of the components of No Child Left Behind. In the words of Chad Aldeman, “If this isn’t enough time, what would be?” Will opposition to using teacher evaluations for personnel decisions really die down by the time 2016 rolls around? Further, the new policy could create additional confusion in an already confusing waiver process. It says something that the Department has to release a four-page, state-by-state chart just to explain the timeline for implementing the waiver components (still waiting for a state-by-state chart explaining what they’re actually doing – a far more complicated question).

Still, the Secretary’s decision is a fair compromise between the competing advocacy groups’ positions. And I give credit to the Department for one thing: holding firm on the most critical component of accountability, continuous improvement. More so than the punitive consequences, like school closures and teacher dismissals, accountability really serves to provide meaningful and transparent feedback to schools and educators and give them a roadmap to improve. During the transition to college- and career-ready standards, it is imperative for both schools and teachers to be evaluated on their progress and to use information from evaluations to improve the implementation process. If accountability and other incentives for educators are not aligned to the standards, what kind of signal does that send about the value of implementing them well?

So yes, there will be a pause. And members of Congress can now wave binders full of waivers, and then waivers of waivers, during hearings. But at least the Department is not pressing pause on what’s most important: its expectations for higher standards, better assessments, and continuous improvement.

The parade of bills that could replace No Child Left Behind continues this week with Wednesday’s markup of Rep. John Kline’s (R-MN) version. All signals suggest that this won’t be the year Congress finally updates the nation’s most comprehensive education law—and the substantial differences between Kline’s and Sen. Tom Harkin’s bills have a lot to do with these dim prospects. We’ve already seen what Harkin’s Strengthening America’s Schools Act would mean for English Language Learners (ELLs). Today we’ll take a similar look at Kline’s bill, the Student Success Act (SSA).

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?

Tuesday and Wednesday, the Senate HELP Committee convened to mark up Chairman Tom Harkin's (D-IA) bill to reauthorize the Elementary and Secondary Education Act. @NewAmericaEd's Anne Hyslop and Conor Williams live-Tweeted, and we've collected some of the main takeaways here, ICYMI.

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.