Washington — Colleges and universities that enroll too few low-income students and those that have the worst graduation rates could suffer financial penalties under a bipartisan bill introduced Thursday.
The bill — formally known as the ASPIRE Act — could affect some of the nation’s most highly regarded institutions that matriculate low levels of Pell Grant recipients, such as Georgetown, Duke University and Notre Dame, to name a few.
The bill could also impact a number of for-profit universities, HSIs and HBCUs that have some of the worst graduation rates in the nation, according to an analysis performed by Education Reform Now, an organization that seeks to influence education policy and which supports the bill.
While the bill has the backing of a number of college presidents and higher education organizations, it seemed to catch unaware some of the organizations whose college and university members would be impacted by the proposed legislation.
The 47-page bill — which takes both a carrot-and-stick as well as a Robin Hood approach to higher education reform — is aimed at fixing what is a “clear system of failure,” according to U.S. Senator Chris Coons (D-Delaware), who introduced the bill along with U.S. Senator Johnny Isakson (R-Georgia).
“This bill incentivizes access and completion — areas that aren’t really assessed and incentivized at anywhere near the level they should be,” Coons said Thursday during a phone conference with reporters.
On the admission side of the bill, Coons said if the 80 institutions with low Pell Grant recipient enrollment would enroll about 2,500 more students, collectively, it would “address the entire issue.”
“The shortfall, in terms of admitting qualified, low-income students, is not that significant,” Coons said.
While the admission side of the bill affects mostly well-resourced organizations, the completion side affects quite a few for-profit colleges, as well as HBCUs and HSIs, which struggle financially, Coons noted.
The bill is “completely self-financing,” according to Coons, and offers a series of rewards and punishments.
Under the bill, colleges and universities that rank in the bottom five percent when it comes to Pell Grant recipient enrollment would be given four years to improve access to those students or “risk paying a penalty.” The penalties would be steered toward completion efforts for struggling universities with low completion rates.
The bottom five percent calculation is based on a snapshot, so there would not be a perpetual bottom five percent, Coons said.
Mary Nguyen Barry, senior policy analyst at Education Reform Now, said the fees would operate on a sliding scale and would be calculated based on how much each college spends on educating its students, multiplied by the number of additional low-income students the college would have to enroll in order to not be in the bottom five percent.
“The idea is to embolden colleges to boost their enrollment of low-income students,” Barry said. “They can either spend the money and actually educate more low-income students or pay a similar corresponding amount to the colleges that do.”
Through the bill, the institutions that rank in the bottom five percent when it comes to six-year graduation rates could “choose to opt-in to the bill’s completion standards” and would get funding and five years to develop and implement plans to improve completion, or risk paying a penalty and eventual loss of federal financial aid for new students for three years, according to a summary of the bill. Up to $200 million a year would be devoted to completion efforts.
The Education Reform Now analysis shows that about a dozen private non-profit HBCUs and about half a dozen public HBCUs could be affected and opt into the program.
Johnny C. Taylor, president and CEO of the Thurgood Marshall College Fund, an organization that represents 47 publicly-funded HBCUs, says his organization backs the proposal, primarily because the legislation is “an option, not a requirement.”
“It is important to note the ‘penalty’ will only apply to schools that decided to participate and use the funds for the special purpose covered under the statute,” Taylor said. “Schools who do not choose to participate do not face any penalty under this proposal.
“The result is schools that believe they can meaningfully improve their graduation rates by investing dollars in their completion programs will opt-in and participate,” Taylor said. “Those who do not believe the investment will work, won’t participate.”
All of the institutions listed in the analysis have graduation rates under 22 percent. That is substantially lower than the 60 percent national average six-year completion rate at 4-year institutions.
About a dozen or so private for-profit 4-year institutions could be affected by the bill because of their low completion rates. While the bill says public or nonprofit institutions may elect not to participate in the program, apparently there is no such provision for for-profit institutions, based on a scan of the document for the terms “profit” and “elect.”
Career Education Colleges and Universities, or CECU, an organization that represents the for-profit college sector, did not respond to a request for comment.
In terms of colleges and universities that rank in the bottom five percent for low enrollment of Pell Grant recipients, 13 are public 4-year institutions but the vast majority — 67 — are private, nonprofit 4-year institutions.
Paul F. Hassen, a spokesman for the National Association of Independent Colleges and Universities, or NAICU, said the organization had no comment. Efforts to reach some of the private nonprofits that would be impacted were not successful.
The bill also seeks to reward institutions that are “already on the right track when it comes to access and completion by making additional competitive funding available for completion efforts,” according to a summary of the bill. Priority would be given to minority-serving institutions and HBCUs.
The bill also enables high-performing institutions on access and completion to apply for non-financial rewards, such as bonus points in federal competitive grants or a reduced regulatory burden, according to the summary.
“The bill would not prescribe improvement strategies — institutions must create their own plans,” the Coons statement says.
Jamaal Abdul-Alim can be reached at [email protected] or follow him on Twitter @dcwriter360.