By Jazelle Hunt
NNPA Washington Correspondent

WASHINGTON (NNPA) – Last year, in an effort to improve accountability and return-on-investment in higher education, President Obama unveiled a plan to rate institutions and tie federal funding to those ratings. But at a time when state and federal funding for schools is becoming performance-based, and merit-based student aid is expanding at the expense of need-based aid, Historically Black Colleges and Universities (HBCUs) and other minority-serving institutions (MSIs) say the plan puts them at a disadvantage.

The rating system is the Department of Education’s College Scorecard, an online tool that provides general information on institutions, and rates them on five metrics: costs, graduation rate, loan default rate, median borrowing, and employment. The Scorecard tool is already in operation in the informational stage. By next year, it will issue ratings based on these metrics and by 2018, federal aid rely on these ratings.

“The federal government provides over $150 billion each year in student financial aid, while states collectively invest over $70 billion in public colleges and universities. Almost all of these resources are allocated among colleges based on the number of students who enroll, not the number who earn degrees or what they learn,” states a White House fact sheet on the rating proposal. “Students can continue to choose whichever college they want, but taxpayer dollars will be steered toward high-performing colleges that provide the best value.”

On September 2, the University of California-Los Angeles Civil Rights Project convened educators and advocates for a forum featuring research on the shortcomings and possible unintended consequences of the proposed system. While the concept of accountability is widely welcomed in the higher education community, many have concerns about whether this rating system is fair.

“In this era of accountability and outcomes-based funding, MSIs are deeply vulnerable—because of their financial situations…and also due to the risk that they take in enrolling many of the students that other institutions don’t enroll,” said one researcher, Marybeth Gasman, professor of higher education at the University of Pennsylvania. “And these risks result in uneven outcomes for MSIs.”

The system is another step in a national trend toward performance-based funding, in which student GPAs and completion/graduation rates determine aid. But Historically Black Colleges and Universities (HBCUs), Predominantly Black institutions (PBIs), and other minority serving institutions attract and accept more low-income, first-generation, and underprepared students than do better-resourced schools.

“We take students with many challenges and we graduate them, whereas other well-financed institutions with higher admissions standards cherry-pick off the top and get the top students. I submit that Dillard can probably graduate 95 percent of those students as well,” said researcher Willie Kirkland, professor and director of Institutional Research and Effectiveness at Dillard University in New Orleans. “If we were more properly resourced, we could overcome some of the challenges we face with financial aid. But I would challenge those institutions who graduate 99 percent, to take Dillard students and graduate the same percentage we graduate.”

Another rating system feature that has raised eyebrows is the student default rate metric. With this, schools will be rated on the percentage of students with certain federal loans who default within the first three years of the repayment period.

Almost all HBCUs serve a majority low-income student body. In the 2011-2012 school year, 90 percent of Black fourth-year students had received a federal loan at some point during their matriculation. The same was true for more than half of all Black undergrads that year, according to the National Center for Education Statistics. Because of myriad socioeconomic realities, these students are more likely to default on loans.

“What it looks like is going to happen is that the institutions that don’t have [resources], that don’t have much instructional spending for their students, or that enroll high numbers of disadvantaged students, will simply be poorly rated and cut off,” said researcher Sara Goldrick-Rab, a professor of educational policy studies at the University of Wisconsin-Madison. “Are they going to close poorly rated institutions and leave disadvantaged students with no options? That’s the worst part of our system – how risky it is for somebody who’s disadvantaged to enter our system, and how likely it is that they’re going to end up with debt and no degree.”

Financial aid options on the whole have taken a hit, most notably with the PLUS loan program. In an attempt to protect borrowers from taking on more debt than they can handle, the Obama administration tightened approval standards during summer 2011. With the new PLUS loan standards, the denial rate for students and families at HBCUs increased from roughly 50 percent, to 70 percent.

Because the change took effect almost immediately, previously approved students had their PLUS loans revoked just as the fall semester began, forcing them to suspend their educations.

Institutions themselves are also receiving less state and federal funding to support their operations. Schools that do not have large endowments, affluent donors and alumni, and other resources to fall back on, have been particularly affected. In turn, such schools have less financial aid to offer cash-strapped students, and rely more on student tuition and fees to remain solvent.

According to the Center on Budget and Policy Priorities, state schools earned 24 percent of their revenues from student costs, in 1988. Over the next 20 years that percentage doubled.

Even with these challenges, affected institutions are making significant inroads in closing societal gaps in both degree attainment and workforce diversity.

“We hear a lot about the shortages of teachers…we hear much about men of color, especially right now, and we also hear about our great needs in STEM,” said Gasman. “What we’d like to urge people to do is – when they’re thinking about how institutions are funded – to think about how MSIs contribute in these critical areas.”

Other criticisms of the accountability plan include concerns about College Scorecard’s data source, the Integrated Postsecondary Education Data System (IPEDS). Researchers point out that among other blind spots, IPEDS does not include part-time, transfer, or non-traditional students, who are largely of color and/or low-income. Additionally, plans for the rating system do not yet include provisions to help poorly rated institutions improve.

“The goal is to have lots of opportunities for people to go to schools that serve them well. Our objective is not to eliminate, it’s to improve the overall system ability,” said policymaker Jamienne Studley, Deputy Under Secretary of Education, adding that schools with effective practices will be recognized and protected. “We’re not looking to eliminate unless there are places that are truly not using federal funds to get educational value for people. So improvement would be very important for us.”

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