With the nation deep in a pandemic that has induced an economic recession, the newly elected Biden-Harris administration has much work ahead to ensure that students are protected in this time of unprecedented uncertainty.
There are worrying signs. Enrollments at community college have dropped significantly during the current crisis, while enrollments at for-profit and online programs have increased. Graduate program enrollment is up. Marketing and recruiting activities, which are often deceptive and misleading, are also on the rise. More colleges are considering using for-profit companies to establish and outsource their online programs. Students are facing greater danger than they did during the last recession, when aggressive and predatory recruiting practices by some for-profit colleges drove millions of students into programs that left them either with no degree or with an essentially worthless degree. Meanwhile, Education Secretary Betsy DeVos has systematically dismantled protections for students and taxpayers that were built up by the Obama administration, leaving students stranded when their colleges closed precipitously and saddled with debt for worthless programs.
Consumer protection issues have never been more important than they are now. That is why the Center for American Progress has teamed up with five other organizations—New America, The Century Foundation, The Institute for College Access and Success, Third Way, and Veterans Education Success—to call on the Biden-Harris administration to make accountability a top priority for the U.S. Department of Education through the following five steps:
- Protect students from shoddy higher education programs. For-profit colleges have driven an increase in student loan default and delinquency and left students unemployed or with unacceptably low earnings. The Obama-Biden administration raised the floor on for-profit and nondegree programs, but Secretary DeVos rolled these protections back. Reinstituting strong requirements for programs that promise to provide “gainful employment” and writing a new rule that deters institutions from preying on and lying to students should be a top priority for the administration. Additionally, the administration should rescind guidance that has allowed schools to skirt rules banning payments that offer an incentive to recruit students in large numbers, often with predatory tactics, using certain types of contracts.
- Ensure that students have access to high-quality programs. Schools have figured out how to evade accountability and game the sole universal measure of terrible borrower outcomes—the cohort default rate. The Trump administration has also weakened federal rules for accreditors charged with improving college quality. Additionally, with the rise of distance education, 49 states (excluding California) and the District of Columbia have joined a reciprocity agreement known as NC-SARA. Under this agreement, member states delegate their role in approving and overseeing colleges their students attend to the state in which the college is located, undermining key higher education safeguards in many states. The administration must create incentives to lower student loan default risk and ensure access to a quality education.
- Protect veterans from predatory colleges. Service members, veterans, and military-connected students have long been targeted by predatory low-quality institutions, and a current loophole in the law gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform. The law was intended as a market viability test, forbidding for-profit schools from being entirely dependent on federal aid from the U.S. Department of Education. But the GI Bill, administered by a different agency, was overlooked, and now the 90/10 loophole allows for-profit universities to load up on GI Bill funds and military student aid to skirt the cap on federal aid. The end result is schools that are now fully or nearly fully taxpayer-subsidized and heavily reliant on recruiting veterans. The administration should work to close the 90/10 loophole, kick predatory colleges out of the GI Bill and military tuition assistance and off of military bases, and crack down on predatory websites designed to scam veterans and service members.
- Prevent failing colleges from using federal money as a bailout fund. The Education Department’s attempts to prevent the waste of taxpayer dollars at colleges that burn through cash, abruptly close, and leave students without a path to graduation are too often inadequate. Financial oversight reform was overdue even before the pandemic. Now, financial shocks from the COVID-19 crisis have heightened both the need for improved accountability—especially among rapidly growing online programs—and the risk that financially failing schools will use federal money as a bailout fund. The Biden administration must triage schools at the greatest risk of closure and take action to protect students and taxpayers.
- Make data and transparency a priority. Data are essential for shining a spotlight on inequity in higher education, revealing who has access to a high-quality postsecondary education and who does not. The Biden-Harris administration should make the publication and utility of federal higher education data a priority throughout the next four years, including by improving information on student outcomes by race and ethnicity, working with Congress to pass the College Transparency Act, and improving the utility of consumer-facing data tools such as the Education Department’s College Scorecard. Consumers and taxpayers alike deserve to know where they are more likely to get a return on their higher education investment.
The next several years look to be difficult ones for the higher education sector. But they will be significantly harder for students if bold steps are not taken to protect them from the rampant abuses and profiteering seen throughout the last recession. The Biden-Harris administration should undo the damage wrought by Secretary DeVos and make consumer protection and accountability issues in higher education a central priority in the White House.
Debbie Cochrane is the executive vice president of The Institute for College Access and Success. Lanae Erickson Hatalsky is the senior vice president for the Social Policy and Politics Program at Third Way. Antoinette Flores is the director for Postsecondary Education at the Center for American Progress. Amy Laitinen is the director for Higher Education Policy at New America. Bob Shireman is the director of Higher Education Excellence and a senior fellow at The Century Foundation. Carrie Wofford is the president of Veterans Education Success.