Noteworthy Provisions of the New Higher Ed Act Draft

[This piece was co-authored by Ben Miller, Clare McCann, and Stephen Burd].

Yesterday, Sen. Tom Harkin (D-Iowa), the retiring chairman of the Senate Health, Education, Labor and Pensions Committee, released the second draft of his proposal for reauthorizing the Higher Education Act. As we noted during our review of the initial draft back in June, there are a number of good proposals in the bill, particularly ones that would increase oversight over for-profit colleges and provide better consumer information that students can use when choosing which college to attend.

Since much of this draft is similar to the initial one, we want to highlight three key new provisions in the bill that are particularly noteworthy.

Ending the Student Unit Record Ban

The most noteworthy change from the first draft to this one is a new section that ends the current ban on the federal government collecting and connecting unit record data from postsecondary institutions. The new statute, which wasn’t ready for prime-time this summer, would allow the Department of Education to understand critical policy questions, like whether colleges are helping their Pell Grant students graduate or whether their graduates are able to find jobs that allow them to repay their student loan debt. The bill also has requirements that deal with the data and privacy concerns raised by those concerned about creating a federal unit record system. We were glad to see the unit-record system added to the higher education agenda. A paper we published earlier this year explains the origin of the ban—and why its repeal is so important.

Sen. Harkin’s call to end the unit record ban now joins several other legislators who have put forward similar proposals. The first bill to repeal the ban on a student unit record system was co-authored by Sens. Ron Wyden (D-OR) and Marco Rubio (R-FL). And in former vice-presidential candidate Rep. Paul Ryan’s anti-poverty plan released last year, he called for a Commission on Evidence-Based Policy Making, which would investigate the creation of a Clearinghouse for Program and Survey Data to join data sources across the government together in pursuit of a more complete picture of federal programs.

Sen. Lamar Alexander (R-TN), incoming chair of the Senate Health, Education, Labor, and Pensions Committee, is more of a question mark. He’s well-known for railing against the burden that the current data system (IPEDS) places on colleges. But while a unit record system could lighten the load by allowing schools to upload files like the ones they already maintain instead of re-tabulating dozens of figures for different groups of students, it’s not clear whether Alexander will come around to the idea. It will be interesting to see if his bipartisan task force on burden reduction for colleges, which is expected to report back early next year with recommendations, touches on the unit record issue.

Implementing a Pell Grant Bonus

One of the Pell Grant program’s flaws is that it awards dollars to institutions solely based upon enrollment. So two institutions with the same number of Pell recipients get essentially the same amount of money, even if one does an excellent job serving students and the other does a terrible job.

Harkin’s bill tries to change the compensation only for enrollment dynamic by introducing a “Pell Bonus” Demonstration Project, which aims to encourage colleges to enroll and graduate more low-income students. New America has argued for the need to create this type of bonus system for several years, dating back to our initial report under the Gates Foundation’s Reimagining Aid Design and Delivery series.

Under the legislation, the U.S. Department of Education would provide grants to colleges in up to five states, which have “a strong record of supporting, reforming, and improving the performance of the state’s public higher education system.”  States would be eligible if they have invested significantly in their public colleges, helped smooth the transfer process between public colleges, and devoted their financial aid dollars primarily to need-based aid.

In exchange, colleges in these states would receive additional funds depending on the proportion of Pell Grant recipients they have in their graduating class, the school’s graduation rate, and its average net price. Funds could be used to increase spending on need-based financial aid; strengthen support programs for low-income students; improve student learning while reducing costs; use technology to scale and enhance improvements; and establish or expand accelerated learning opportunities.

We are encouraged to see that this proposal would encourage colleges to do the right thing — enroll and graduate more low-income students and use their financial aid resources to help those who need the support the most.

One-Time FAFSA

There’s a lot of discussion about the need to make the FAFSA easier to fill out, but the form’s complexity is only one part of the issue. The other problem is that student’s have to re-submit the FAFSA each year. Research suggests that a not-insignificant number of Pell recipients re-enroll in college without filling out the FAFSA again, resulting in them losing access to the grant. And even if students do fill out the FAFSA it still means they have to wait each year to get a sense of what their aid package might look like.

Harkin’s bill includes a new demonstration program that would test whether one-time FAFSA filing could help students get a better sense of their federal and state aid, as well as assist with credit accumulation, enrollment, and other things.

A not-insignificant number of Pell recipients re-enroll in college without filling out the FAFSA again, resulting in them losing access to the grant.

The program would work by authorizing the Secretary to select up to five states where students could lock in their FAFSA information for between two and four years. Students would then not have to fill out the FAFSA again during this time, unless they answered yes to a simpler question about if their income changed dramatically. This multi-year FAFSA would also be determined using multiple years of income data in order to better smooth out the results. Finally, states would be required to lock in their own aid as well using the same FAFSA data.

This idea has a lot of potential and is similar to one we included in a report called Breaking with Tradition, which was released this summer. If effective, moving the FAFSA away from being an annual paperwork exercise could make it possible to start pursuing other exciting reforms, such as presenting student aid as a flexible account that they could draw down at their own pace.

There’s plenty more in the bill, so check back with EdCentral in the coming weeks for more analysis.

[This piece was co-authored by Ben Miller, Clare McCann, and Stephen Burd].

[Cross-posted at Ed Central]

Ben Miller

Ben Miller is a senior policy analyst in the New America Foundation's Education Policy Program. He was previously a senior policy advisor in the U.S. Department of Education.