TOPICS > Education

Colleges appeal to Congress to cut regulations they say drive up costs

BY   February 23, 2015 at 12:43 PM EDT
Hartwick College in Oneonta, New York has just 1,500 students but President Margaret Drugovich estimates the schools spends $297,800  and 7,200 staff work hours to comply with what critics call onerous government regulation and reporting requirements. Photo: Hartwick College

Hartwick College in Oneonta, New York, has just 1,500 students but President Margaret Drugovich estimates the schools spends $297,800 and 7,200 staff work hours to comply with what critics call onerous government regulation and reporting requirements. Photo by Hartwick College

When letters of admission go out soon from colleges and universities to hopeful applicants, they’ll be quickly followed by offers of financial aid some advocates for students say require a college degree to understand.

Among other problems, the letters often fail to distinguish between grants that don’t have to be repaid and loans, which do. They’re also “laden with jargon,” according to the Consumer Financial Protection Bureau, and “make it unnecessarily difficult to compare different financial aid awards side-by-side.”

But a two-year-old U.S. Department of Education effort to fix that problem by presenting this information on a simple, consistent form called the “Shopping Sheet” is “extremely confusing for students,” according to a new report by a Senate task force on higher-education regulation.

Debbie Cochrane is confused, too. Research director at an advocacy organization called The Institute for College Access and Success, she wonders “how comparing six or 10 totally different award letters could be less confusing than reading one standardized one” — especially when “a lot of schools will hide information” such as how much financial aid is in the form of loans.

This point of view is not included in the report of a task force that the Senate appointed to study regulations on colleges and universities, which consists entirely of past and present university and college presidents and chancellors and representatives of higher education associations. The report itself was produced by the principal lobbying organization for universities and colleges, the American Council on Education, or ACE.

At a time of calls for greater public accountability about high costs and low success rates, it urges watering down or eliminating many regulations governing a sector that gets nearly $200 billion a year in federal taxpayer money in the form of financial aid, tax breaks and grants for research and development. Senate hearings on the findings are scheduled for Tuesday.

“This is a propaganda report,” said Louisiana State University President F. King Alexander, who takes strong issue with the recommendations.

Alexander said following the report’s suggestions would reduce the government’s ability to monitor not only the performance of conventional universities and colleges—which, he said, “don’t like regulation, but they love federal money”—but also of private, for-profit institutions that get almost all of their revenue from taxpayers through federal student grants, loans and GI Bill benefits, and some of which have very low graduation rates, very high numbers of student-loan defaults and questionable recruiting practices.

“The for-profits love what’s going on,” he said. “They want the federal government to put money on the stump and leave.”

The cochairs of the task force, University System of Maryland Chancellor William “Britt” Kirwan and Vanderbilt University President Nicholas Zeppos, both declined to be interviewed until after the hearings are over.

As for whether it was a conflict of interest for universities and colleges to draw up a Senate report recommending easing regulations on themselves, Terry Hartle, senior vice president of ACE, said it was “only logical” to ask people closest to the issue to participate in the process.

“Washington policymakers frequently call on a trade groups to help them better understand how federal policies impact their industry or place of work,” said Hartle.

A spokeswoman for the Senate Committee on Health, Education, Labor, and Pensions, which appointed the task force, said, “It’s silly to imagine that anyone other than a college leader would understand the time and effort involved in satisfying each regulation and its effect on student learning and safety.”

But critics said they found it inconceivable that no advocates for students, parents or federal taxpayers were involved.

“I don’t think it’s surprising that a report written by industry for industry would say, ‘Thanks for the money now leave us alone,’” said Amy Laitinen, a former Education Department policy advisor who now serves as deputy director for higher education at the nonpartisan think tank the New America Foundation. “They didn’t even try to include a token student-protection voice. This is just so slanted.”

Instead, the “one-sided report” would “strip valuable student protections,” said Jennifer Wang, policy director of the group Young Invincibles, which represents students.

Policymakers should collect and publish better, not less, data about graduation rates and other measures of success, letting competition help improve results, the conservative American Enterprise Institute said in it’s own October 2014 report on improving higher education quality.

The report contends that some of the information universities are required to disclose to consumers is not only confusing, but excessive and “of marginal value.” This includes the federal definition of graduation rates, which takes into account only full-time freshmen who start and finish at the same institutions, even though increasing numbers of students transfer and finish somewhere else.

Yet it was a higher education lobbying group, the National Association of Independent Colleges and Universities, that persuaded Congress in 2008 to block letting the government track individual students, which would have provided a much more accurate picture of how many graduate.

Efforts by the Obama administration to expand some of these reporting requirements are also under fire in the House, where education subcommittee chair and former community college president Representative Virginia Foxx, R-N.C., has introduced a bill to block a White House plan to rate universities based on cost, graduation rates and other measures.

The task force report also suggests doing away with a time-consuming requirement that students who drop out be given counseling about the repayment options on their college loans. It proposes having the Education Department instead create a website to provide such information in these cases. (The separate Shopping Sheet is a voluntary program, not required.)

“They seem to be arguing against basic consumer disclosures people need to know,” said Cochrane. “It’s out of step with the record levels of concern about student loan, delinquency and default.”

The report also says the Education Department uses outdated accounting methods to determine whether a university or college is financially healthy enough to continue receiving federal student aid, and urges that colleges judged to be in trouble be allowed to review and appeal their scores before they’re publicly released.

And at a time when administrative staffing is rising and the proportion of faculty who work full time is falling, it suggests suspending the requirement that universities report information about how many employees they have, and in what jobs.

Even critics of the report agreed there are higher-education regulations that seem useless or are confusing or repetitive, or don’t seem as if they should be colleges’ responsibilities.

For example, institutions are responsible for confirming that students who apply for financial aid have registered for the Selective Service and have never been convicted of drug offenses. They’re also required to distribute voter-registration forms and to have policies to prevent illegal file sharing.

Universities and colleges have long argued that complying with what the report calls “inordinately costly” rules — the task force report says the Department of Education alone has 2,000 pages of them, and produces an average of one additional document per day—is among the reasons they’ve been forced to raise tuition, though the report also says that calculating the precise cost “is both difficult and time-consuming.” (The department wouldn’t comment, other than to say it is reviewing the recommendations and is “always interested in finding ways to improve the efficiency and effectiveness of our regulations and reporting requirements.”)

The report cites a 1997 study at Stanford estimating that the university spent 7.5 cents of every tuition dollar to comply with regulations. A more recent review last year by Vanderbilt reportedly found that more than one-tenth of the university’s expenses, or $150 million a year, went to complying with federal regulations alone. Vanderbilt declined to provide details or answer questions about this figure.

The report also makes reference to a study by the right-leaning American Action Forum that the number of university and college employees with the title “compliance officer” has grown by 33 percent in the past decade; this includes loan and credit counselors who help students navigate the complex process of borrowing to pay tuition. It quotes the same study as saying that institutions collectively spend 26.1 million hours a year completing U.S. Department of Education forms, although the study actually says that’s the number of hours not only institutions put into this task, but also students and their parents.

Hartwick College, which has about 1,500 students, spends $297,800 and more than 7,200 hours annually collecting information and filing required reports and forms to 60 federal, state and local government agencies, its president, Margaret Drugovich, said.

“This is a story of something that was intended to make sure there’s a certain standard of quality, which has turned into a huge burden on colleges of all sizes,” said Drugovich, who served on the task force.

LSU’s Alexander said he’s all for trimming seemingly pointless busywork. “I’m fine with getting rid of the nuisance requirements,” he said.

“But higher education needs real accountability — not less of it,” Alexander said. “The more that we can demonstrate to the consumer, to the students and parents, which institutions have greater value and which institutions put students into massive debt with a worthless piece of paper, I think we owe them that.”

Editor’s note: This story has been updated to correct Amy Laitinen’s title and to clarify that the task force report suggests ending exit counseling for student borrowers who drop out, that the American Enterprise Institute paper preceded the report, and that the National Association of Independent Colleges and Universities was the higher-education lobbying group that opposed changing the federal graduation rate calculation.

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Read more about higher education.

Related stories:
Obama ratings would divide colleges into high and low performing
College-rating proposal shines spotlight on powerful lobby
Colleges that pledged to help poor families have been doing the opposite
Ranks of nonacademic staffs at colleges continues to outpace enrollment, faculty

PBS NewsHour coverage of higher education is supported by the Lumina Foundation and American Graduate: Let’s Make it Happen, a public media initiative made possible by the Corporation for Public Broadcasting.