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Reforms to Title IV Eligibility Process

By their mission and nature, APLU and public universities share the administration’s goal of improved transparency and accountability. APLU believes that some important reforms are needed, particularly to the Title IV institutional eligibility process, but that a college ratings system is misguided and would be too complex to fairly create and implement.

APLU has developed a proposal with two key components to improve transparency and increase accountability without rating or ranking institutions.  Both require improvements in the coverage and quality of the data sources that would serve as their foundation.

  1. Public reporting of a limited set of key metrics using more complete and accurate data in a manner that offers widespread access to students, families, policymakers, and the general public.  Better data will also help faculty and staff at institutions make more informed decisions about ways to improve educational outcomes.
  2. A more robust institutional accountability system that fairly evaluates institutional performance for the allocation of Title IV funding to better protect student and taxpayer expenditures.  Such a process should include a limited set of meaningful outcomes, adjusted for the college readiness of the student population served.
  • Improving Transparency

    Essential and accurate information about all higher education institutions should be made widely available so that students, their families and the public can make judgments on institutions based on their own priorities.  Examples of key metrics include:

    • Student progress and completion rates: In lieu of the current graduation rates reported on the College Scorecard, institutions should have the option to utilize their Student Achievement Measure (SAM) outcomes.  SAM offers a more realistic picture of student progress and completion by including transfer students, part-time students, full-time students, and the outcomes of students who enroll in multiple institutions.
    • Median net price by income level: The out-of-pocket costs for a student to attend a college or university vary greatly among students from different financial backgrounds.  Providing an estimate by income will be particularly useful for students from low income/disadvantaged backgrounds.
    • Post-collegiate outcomes: The employment rate of former students at appropriate time intervals (e.g., five or ten years) is useful information for students and their families.  Employment rates should be supplemented with student enrollment in graduate and professional programs as well as military service.  APLU would also support a measure of the proportion of students whose wages are above an income floor, but not a simplistic calculation of average earnings directly out of college that could steer institutions away from offering programs in professions that don’t typically pay well.
    • Loan repayment rates: Metrics that measure student repayment of federal loan debt can be helpful in assessing whether an institution is successfully preparing students for their future careers and lives without undue debt burden. The cohort default rate that the Department of Education currently reports is too easily gamed and of decreasing value to consumers as an indicator given the rise of income-driven repayment options.
  • Increasing Accountability

    Title IV eligibility should be leveraged to protect students and taxpayers from committing money to institutions that don’t do right by their students.  In order to fairly compare all institutions on a level playing field, APLU calls for the creation of a student readiness adjustment, which would account for varying factors of an institution’s student body. In addition, three metrics should be used to increase accountability:

    • Student progress and completion rates: The rates used to judge the educational success of an institution’s students should be comprehensive and include the outcomes of transfer students, part-time students, full-time students, and students who enroll in multiple institutions, such as their SAM outcomes.
    • Post-collegiate outcomes: Employment rates, enrollment in an advanced level of education, and military service are indicators of the quality of the education provided by an institution.
    • Loan repayment rates: The new income-driven payment options make repayment rates a key component of a robust accountability system.  In addition to examining whether or not a student is making timely payments, there should be further exploration of methods that analyze the amount of federal loan debt to determine if institutions are burdening students with too much debt that is unlikely to be fully paid off.  The appropriate consideration of student debt and repayment for both undergraduate and graduate students will be necessary.

    Given the diversity of students enrolled in postsecondary education, institutional outcomes cannot be evaluated without taking into consideration the level of preparation and entering characteristics of an institution’s student body.  In other words, an institution’s expected performance on outcomes must be adjusted based on their students’ readiness to achieve.

    If after going through the student readiness adjustment an institution’s actual performance was far below the expected performance, the institution would be subjected to closer scrutiny and the possibility of sanctions.  The sanctions could result in partial or full withdrawal of future Title IV funds.  (Note that the current “all or nothing” eligibility determination process appears to be part of the reason that very few institutions are currently penalized.)  The same method could be used to identify institutions performing much better than expected for recognition or reward such as additional dollars to support underrepresented or disadvantaged students.

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