On a gray, drizzly morning in February, hundreds of university and college leaders gathered in the ballroom of the Hyatt Regency Hotel on Capitol Hill in Washington, D.C., for the annual meeting of the National Association of Independent Colleges and Universities, or NAICU. At the top of their agenda was finding a way to defeat a new college rating system proposed by President Barack Obama, which the administration hopes will give consumers a better idea of which schools are worth the tuition they charge.
Once David Warren, NAICU’s president, took the stage, the tone of the event shifted from trade meeting to church revival. “We have been under steady, unrelenting pressure,” said Warren, who spoke of an “overreaching executive branch” that seeks to use unreliable data to measure the effectiveness of higher education institutions that are vastly different from one another. The rating system would fail to capture “the specific mission of an institution at whose core is where the value can be found.” Then the tall, silver-haired former Ohio Wesleyan University president with a booming voice and a divinity degree from Yale dispatched the members of his congregation out into the rain and toward the mist-shrouded Capitol building to deliver the same message to their congressional representatives. “Tell your story to your member of Congress, why this is an ill-conceived notion,” Warren urged. “No congressman wants an ugly rating for an institution in his district.”
It was a rare glimpse at a lobbying operation that even critics say has been as effective as it is little known: the one that represents American colleges and universities.
NAICU, which advocates for private nonprofit colleges and universities, is one of the “Big Six” trade associations that represent public universities, private universities, community colleges, and other higher education interests. The biggest is the American Council on Education, or ACE, which houses many other higher ed trade organizations in its headquarters at One Dupont Circle—an address that, to Washington insiders, is shorthand for the higher ed lobby.
Virtually unknown outside the Beltway, the denizens of One Dupont have been remarkably effective over the years, as evidenced by the nearly $200 billion the federal government spends annually on higher education, mostly in the form of student financial aid, tax breaks, and research grants. Another testament to the lobby’s power is that most of this funding comes with few strings attached. Schools get the money with, by and large, no requirements that they control their costs, assure their quality, or meet other meaningful standards of performance.
But with voters increasingly alarmed about the ever-rising price of college, which has quintupled student loan debt in the past ten years, the Obama administration has begun pushing policies to get better results. Last summer, the president announced that he was directing the Department of Education to use existing federal data to create a system that would rate the performance of each of America’s thousands of colleges and universities on such things as graduation rates and net price—the actual amount paid, per student, after discounts and financial aid. The stated aim is to provide students and their parents with more and better information so they can make savvier choices when choosing a college, putting more market pressure on the system.
The ratings are the first step in a broader accountability drive by the administration and some other elected officials. Once a system of measuring college and university performance is established, Obama wants to tie federal funding to those results—a connection a growing number of states have already made in their higher education budgets. And because any performance measurement system is only as good as the quality of the underlying data, a bipartisan group of lawmakers has introduced legislation in Congress to strengthen the information the federal government collects and makes public.
So far, the political jockeying over these measures has mostly taken place behind closed doors. But the fight is likely to become more public this fall, when the administration plans to release the first draft of its new ratings proposal. While some congressmen have vowed to expressly block him from doing it, Obama has been able to move forward with the rating system without congressional approval, which has become a signature example of his “pen and phone” strategy to advance his agenda in a gridlocked Washington. But for the very same reason, it is drawing the ire of Republican lawmakers who portray it as a burdensome new regulation pushed by an out-of-control presidency— in short, a perfect illustration of what their broader battle with Obama is all about. And behind the scenes, groups like NAICU are stoking that fight.
Higher ed lobbyists contend that their influence is nowhere near as great as their critics suggest. “People think of the guy in the raincoat and the cash. They don’t understand what lobbying is. Lobbying is using First Amendment rights to talk to members of Congress,” said Sarah Flanagan, vice president for government relations at NAICU. “I’m always amused at the descriptions of our enormous power,” added Terry Hartle, senior vice president for government and public affairs at ACE. “We don’t have PACs, we don’t do fund-raisers, we can’t deliver votes.”
But while the lobby largely doesn’t play in the campaign money game (except for private for-profit colleges like the University of Phoenix and its parent company, the Apollo Group), its power derives from other sources. The Big Six—ACE, NAICU, the American Association of Community Colleges, the American Association of State Colleges and Universities, the Association of American Universities, and the Association of Public and Land-grant Universities—had combined budgets of $110 million in 2011, the last year for which the figures are available from documents they are required to file with the Internal Revenue Service. Such resources allow these groups to hire smart and knowledgeable researchers, wonks, and ex-policymakers, often from the government agencies that regulate them. For instance, ACE in February brought aboard Dan Madzelan, former acting assistant secretary for post-secondary education at the Department of Education, as one of its top lobbyists.
The greatest source of the higher ed lobby’s influence derives from the fact that all members of Congress have colleges and universities in their states and districts. These institutions tend to be major local employers, focal points of civic pride (including for their sports teams), and vehicles for federal research dollars that fuel regional private-sector growth. College and university leaders aren’t afraid to contact their representatives in Washington, often at the prompting of their lobbyists. “They crank out those college presidents to contact their senators and representatives, and college presidents have a lot of clout,” said a former education lobbyist. “They’re doing hand-to-hand combat.”
With their geographically dispersed members, groups like NAICU can usually garner bipartisan support, just as defense contractors typically manage to do by building components for weapons systems in lots of congressional districts. But One Dupont has also learned to adapt to an increasingly partisan Washington. In its fight against the administration’s proposed rating system, for instance, it has won the backing of congressional conservatives who see the move as a classic case of presidential overreach. That includes Senator Lamar Alexander, a former Tennessee governor and U.S. education secretary who serves as the ranking member on the powerful Health, Education, Labor and Pensions Committee. At the annual NAICU meeting, Alexander, who will likely chair the committee if Republicans take the Senate in November, received both an award and a standing ovation for his work on behalf of colleges and universities. The senator, who was once the president of the University of Tennessee, told the approving crowd that government regulation “wastes much-needed dollars that should be used for students.”
After Alexander collected his award, NAICU’s president raised one last objection to the White House’s ratings push. It was an example of the executive branch usurping authority that belongs to Congress, Warren said—a violation of the separation of powers. He urged the people in his audience to make sure their members of Congress were aware of that position.
A few days later, Republican Virginia Foxx of North Carolina and Republican John Kline of Minnesota, chairman of the House Education and Workforce Committee, both echoed this complaint in a letter to the president, blasting his “recent threats to circumvent Congress” in making higher education policy. Alexander has since said he plans to attach an amendment to an appropriations bill to block the Department of Education from using federal funding to “develop, refine, publish or implement a college ratings system.” And two congressmen, Republican Bob Goodlatte of Virginia and Democrat Michael Capuano of Massachusetts, have introduced a resolution opposing the ratings plan. “It shows how smart they are,” said Amy Laitinen, deputy director for higher education at the New America Foundation. “What’s going to get Congress fired up? And right now there’s huge tension between the legislative and executive branches, so let’s get them fired up.”
In addition to feeding GOP concerns about presidential overreach, the higher ed lobby’s most potent argument is that the federal data on which any proposed rating system will be built is flawed and incomplete, and won’t give a wholly accurate picture of the performance of individual institutions. On this point, even many supporters of the administration’s rating push agree. For instance, the federal government only asks colleges for information about those students who are attending full-time at the start of their college careers. This means that the large and growing number of students who begin college as part-timers, or who transfer to other schools, or who leave school altogether and then come back as adults, largely don’t show up.
That raises a question: Why is the federal data so incomplete? A big part of the answer is that the higher ed lobby has worked hard to keep it that way.
Obama isn’t the first president who has attempted to inject some measure of accountability into the federal government’s investment in post-secondary education. In 2005, George W. Bush’s education secretary, Margaret Spellings, appointed a commission to look for ways to reduce the reporting burden the federal government imposes on colleges and universities while also making higher education more accountable. Known as the Spellings Commission, the panel endorsed, among other things, the development of a “student unit record” data system that would follow individual students to see how long it took them to graduate, how much they spent on their education, and what they learned. That data, with the names of individual students stripped out, would then be combined and made available to consumers so prospective students could compare schools and see if they were worth the money. By tracking each student from the start to the finish of their college experiences, the big gaps in federal data would be filled without extra burdens being put on colleges. The government would automatically know, for instance, if someone transferred, even across state lines, and could adjust the data accordingly.
NAICU and other higher education groups cried foul, asserting that using students’ information in this way would violate their privacy. Small-government advocacy organizations such as Phyllis Schlafly’s Eagle Forum jumped into the fray to protest that the government couldn’t be trusted to keep this data safe. This argument was bolstered by an episode in which a Veterans Administration analyst’s laptop computer with information about more than 26.5 million veterans and active-duty troops was stolen. Though authorities later recovered the laptop and determined that the thief had never gotten access to the data, the incident helped strengthen the hand of lawmakers sympathetic to NAICU. Not only did student unit record reform not pass, but Foxx, a former community college president, successfully pushed a measure that banned the use of student unit records. It passed relatively easily, with support from both Democrats and Republicans.
Proponents of student unit record keeping, however, have not stopped pushing for it. Right now, they note, no one knows if the graduates of a particular university, or of a specific program within that university, are working in their chosen fields, or what their average incomes are, or whether they have jobs at all. That, say these reformers, is like denying automobile shoppers gas mileage data on specific models, or keeping prospective investors in the dark about whether the mutual funds they’re looking at have risen or fallen in value over time. The government could provide that information by marrying student unit record data with payroll and other figures it already collects through student loan programs and the Social Security Administration.
In the last few years, interest in overturning the student unit record ban and providing better information about college outcomes has taken root. In the Senate, Oregon Democrat Ron Wyden, Florida Republican Marco Rubio, and Virginia Democrat Mark Warner are sponsoring the Student Right to Know Before You Go Act, which would allow the federal government to track students’ postgraduate earnings, federal loan debt, and financial aid, among other things. The information would be used to show whether the students at particular institutions get a good bang for their buck and whether schools are making good use of taxpayer dollars. A version of the legislation has been introduced in the House by California Republican Duncan Hunter.
Cracks are starting to appear in the coalition of interest groups that helped NAICU defeat student unit record keeping the last time around. Trade associations representing public colleges in particular have determined that opposing federal student unit data no longer makes sense for them. Many of their member schools are already required to report that information to their states. And since so many of their students are now part-timers, adult learners, and transfer students, and therefore are not being counted, these colleges and universities are realizing that better data might show their institutional performance in a more favorable light.
NAICU remains steadfastly opposed to student unit record keeping on the grounds that it would violate student privacy, though its critics say the organization is likely more concerned about protecting its underperforming members—the ones that are expensive, but have low graduation and job placement rates—than shielding students from federal overreach. NAICU’s Flanagan disputes that claim, saying reform advocates haven’t laid out exactly what information they want the government to have or even how it would be used. “NAICU’s concern about creating a national student unit record system has always been, and continues to be, based on privacy concerns for students,” she said. “Saying we are trying to avoid accountability is a smokescreen for those who advocate for a national student tracking system but refuse to acknowledge or address the significant privacy issues for students and parents that the creation of such a system raises.” Flanagan also raised concerns that linking wage data to a person’s college experience could have the unintended consequence of pushing people away from service-oriented jobs that pay less. “This is a separate policy question,” she said. “Should you judge the value of an education based on how much money somebody makes?”
If Washington were a rational place, the political path forward for reform advocates would be obvious. First, they could take advantage of the fractures among the Big Six and push some version of the Wyden-Rubio bill through Congress. Then, with the underlying federal data problems fixed, the administration could implement a rating system with confidence that the best arguments against it—and perhaps at least some of the political resistance to it—would have disappeared.
Washington, however, is far from rational these days. Despite growing support for student unit records, almost no one thinks legislation allowing it will pass in the foreseeable future, especially in the GOP-controlled House. At the same time, despite growing opposition to the rating system, almost no one thinks that the efforts by Lamar Alexander and others to bar the Obama administration from using existing federal funds to build it will pass. Even if they did, Obama could veto them.
So the administration is expected to use its power and put forth a proposed new rating this fall, but one that, in recognition of the data limitations, is less clear and definitive than reformers wanted or opponents feared. The administration is gambling that once the rating system is up and running, the higher ed lobby will decide that improving it makes more sense than continuing to fight it, thus hastening the day when a student unit record bill can pass Congress.
The danger is that the inevitable imperfections in the rating system will be used by opponents as evidence that the federal government doesn’t know what it’s doing and shouldn’t be in the business of regulating colleges, thus making passage of a student unit record bill less likely. Which of these scenarios proves true only time will tell.