A New Higher Education Act Is Coming. Are We Ready?

by Julie Margetta Morgan October 03, 2017

This piece argues that to prepare for Higher Education Act reauthorization, the research and policy community need more than just student and institution-level data: We need to dig deeper into how the Department of Education administers the federal financial aid programs.

The Higher Education Act is due for reauthorization: overdue, in fact. Given that the higher education community has been waiting for almost 10 years, it may seem silly to ask: Are we ready? But while legislators, policy analysts, and the entire higher education community are busy drafting policy prescriptions, we are missing the opportunity to determine whether we have diagnosed the problem correctly.


The Higher Education Act has an extraordinary impact on the shape of higher education in the United States. It provides more than $120 billion in student financial aid, and it sets up a raft of regulatory requirements that shape institutions’ policies and practices in a number of areas. Since the last reauthorization of HEA, higher education leaders have turned their attention toward college completion,  and increasingly, affordability, and these topics are likely to figure prominently in the debate over changes to HEA. Policymakers and advocacy groups are considering some significant new policies that would drastically reshape the requirements for institutions to participate in federal student aid, the shape of student aid programs themselves, and the relationship between the government and its student loan borrowers. But while the research is clear that completion and affordability are enduring problems for many students, the solutions are less so, as available evidence is more ambiguous about the best course of action.


Over the past several years, researchers, governments, and policy experts have amassed a substantial amount of data about higher education. For many years, advocates have pushed for access to student-level data that fall into three primary categories: first, data about how students flow through college, or their access and enrollment patterns, course-taking, graduation and employment outcomes; second, data about how students pay for college; and third, data about students’ beliefs about their college experiences. These data make a compelling case that many students are not getting the benefits of their and taxpayers’ investments. They also help us to identify institutions that are particularly struggling, and to look for pain points in the college application, and enrollment, and academic processes.


But there are pain points in the college process that student-level data will not reveal. For example, when the for-profit college chain Corinthian Colleges closed its doors in February and evidence of fraudulent practices came to light, lawmakers on both sides of the aisle expressed concern about the burden taxpayers would be forced to shoulder to cover student loan discharges and any financial aid that could not be recouped. The Department of Education responded to this concern by proposing to expand its practice of requesting letters of credit from colleges that are struggling financially, to cover any losses the government might incur if those colleges failed.


Requiring more letters of credit might sound like a reasonable approach to protecting students and taxpayers from investing in failing schools. But a recent Inspector General report suggests that expanding the Department’s ability to request letters of credit will not address the issue because the Department failed to follow through on its requests. The IG report revealed that, from the time the Department knew that Corinthian would likely require a letter of credit, it took 18 months to officially request a letter of credit. Further, the IG found that the Department failed to oversee colleges’ reporting of their financial status, resulting in manipulation of financial scores as well as further risk to both taxpayers and students.

If the Department of Education is not using its authority effectively, no amount of tweaks to its powers will fix what’s broken in our higher education system. The example cited here is not an isolated incidence of bureaucracy gone wrong. Rather, the Department of Education and the other entities involved in administering our student financial aid system are implementing a vast web of policies under circumstances that greatly affect their outcomes: conflicts of interest, intense industry pressure, constrained budgets, competing goals and complex incentive structures. If we are to fix our higher education system to ensure taxpayer dollars are well spent and students and families can make good on the promise of a college education, then we need to understand the whole picture of how current higher education policies work in practice.


There are things we can do now to fuel more nuanced, effective policy making in higher education. Here are three steps that, when taken together, could yield a richer picture of how our higher education system works, and who influences it.




Both taxpayers and policymakers have the right to understand what is happening to the public dollars fueling the nation’s colleges, and our laws already give them some ability to do so. The Freedom of Information Act and state open records laws allow interested citizens to make requests for information from government agencies, and the agencies are bound to respond (though not always to produce the requested documents). Policymakers have even broader powers to request information about the status of government programs, from simple letters to agencies, colleges, and loan servicers, to the subpoena authority of congressional committees. These methods of transparency are far from perfect, and advocates should push for better vehicles for disclosure. But the higher education policy community should use open records laws in a systematic way to uncover information about how federal financial aid programs are being implemented. Moreover, policy advocates and researchers should work with policymakers to ensure that they are using their investigatory powers as effectively as possible.




Many companies that assist in the dissemination and use of federal financial aid, including student loan servicers, debt collectors, and publicly-traded colleges, are required by law to make public disclosures of information related to their financial health. Some of this same information is relevant to learning how colleges, servicers, and collectors are implementing financial aid programs, and how they interact with the government. For example, when Corinthian Colleges was closing its doors, its SEC filings contained many of the details of Corinthian’s dealings with the Department of Education. In addition, public colleges and universities are required to publish certain information under state open records laws or other public disclosure requirements, including budgets, operating procedures, and certain investigatory reports, which can be combed for important information.




Taken together, the two tactics above can yield important information to inform policymaking. To be sure, researchers and policy wonks have used both of these methods to uncover problems in our higher education system. But once these authors are done with their analyses, the documents they obtained get placed in a drawer. To make the most of the information uncovered, we need a single repository where the higher education community can post documents obtained through open records requests or other transparency efforts, and the public can search for information by financial aid program, institution, program, state, or other criteria. Building a central repository will allow researchers and policy advocates to pool the fruits of their transparency efforts as well as create connections across information obtained from disparate sources. Similar repositories have been enormously helpful in other policy areas, such as death penalty research, where information sits in a variety of different locales, and the sum is far more valuable than the individual parts. The Death Penalty Information Center has become a significant source of information about trends in death penalty cases across the country, allowing the public greater insight into how capital punishment affects certain geographies or high-risk populations.


The steps suggested here can never provide a complete picture of what happens inside the administration of federal student aid programs. But when targeted toward key areas of inquiry, like the Department of Education’s oversight of colleges, or the administration of the student loan program, they can uncover key information that will help us understand the way current policies are implemented, the actors who influence them, and the constraints and incentive structures in which those policies take shape.

Cite This Article as: Teachers College Record, Date Published: October 03, 2017
http://www.tcrecord.org ID Number: 22178, Date Accessed: 10/23/2017 12:29:27 AM

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