The Edge: Student-Loan Pause Undercuts Accountability for Colleges

The latest suspension of U.S. student-loan repayment extends colleges’ “free pass” on default rates, but would a new metric be more meaningful? ADVERTISEMENT [The Edge Logo]( Did someone forward you this newsletter? [Sign up free]( to receive your own copy. I’m Goldie Blumenstyk, a senior writer at The Chronicle covering innovation in and around higher ed. We’re doing some innovating of our own here at The Edge. Each week I will share my latest thinking on the people and ideas reshaping higher ed, alternating between my own reporting and my picks for thought-provoking and useful stories and resources from other organizations. I’ll also mix in some quick takes, noteworthy quotes, and stats that catch my eye, as well as occasional contributions from my colleagues. This week I report on the implications for colleges of debt relief for borrowers — and how we might create more meaningful accountability measures. ADVERTISEMENT SUBSCRIBE TO THE CHRONICLE Enjoying the newsletter? [Subscribe today]( for unlimited access to essential news, analysis, and advice. The “pause” on student-loan repayment undercuts a key accountability measure. The latest [pause on federal-student-loan repayment]( offers borrowers a “fresh start”: Anyone who is currently delinquent or in default will have that designation wiped off their record. Colleges have been getting a different sort of fresh start. One of the federal government’s only universal accountability measures — the cohort-default rate — will be skewed for years to come. The extended pause will also affect a key metric on the College Scorecard, which shows the share of students who repay their loans. “It’s more than borrowers who are getting a free pass,” noted Jason Delisle, a senior policy fellow at the Urban Institute’s Center on Education Data and Policy. The hobbling of the cohort-default rate as a useful measure is itself noteworthy, even if it’s just a temporary and unintended side effect of the student-loan pause (more geeky policy stuff on that below). More compelling to me is the potential for alternative measures to arise. Could another metric do a better job of keeping colleges accountable, while also reflecting public expectations for higher education today? To date, much of the conversation about suspending student-loan repayment [has centered on borrowers](. But I think this could be an inflection point for broader debates on assessment, accountability, and the value of college — discussions that go beyond ideas like the Education Outcomes Quality Standards (recently acquired by Jobs for the Future) that I’ve [highlighted in previous newsletters](. To be clear, the cohort-default rate is still on the books as a required measure. And [as in 2021]( the U.S. Department of Education will probably publish again this September the default rates for all colleges taking part in federal student-aid programs. But those stats won’t tell us much. That’s because they measure the proportion of borrowers who have defaulted on their loans in the previous three years. Yet no federal-student-loan borrowers have gone into default since the first pandemic-era pause, in March 2020. That’s a big reason for [the record-low default rate]( reported in 2021 (for the cohort of borrowers whose repayment obligations began between the fall of 2017 and the fall of 2018.) The extended pause will continue to skew the calculation for four more years (five if the pause is extended again in August, as many predict it will be). Department officials haven’t said much about the impact on the measure. When I inquired this week, the only enlightenment I got was a statement saying they “will communicate directly with institutions about cohort-default-rate calculations.” Colleges with high default rates lose eligibility to participate in federal student-aid programs. But because the bar is so high, [few do,]( and [it’s not that hard to game the numbers](. Plenty of folks (myself included) have long raised questions about the accountability value of this measure. However, it does serve a purpose. Accreditors, for example, look at trends in institutions’ default rates, along with other data, for signs that colleges are emphasizing enrollment over fit or completion. The WASC Senior College and University Commission makes default rates one of the six items that are front and center on the data-summary page of its [Key Indicators Dashboard](. And I can vouch for the fact that journalists, too, examine rates when trying to understand how colleges are serving their students. If the pause renders CDRs pretty much irrelevant for the next several years, though, I wondered if this was the time to dump them altogether. But I got some quick pushback on that. Once repayment resumes, the measures could still be a “good warning sign,” Sameer Gadkaree, president of the Institute for College Access & Success, told me. “Better to keep the guardrail in place.” But maybe, he added, the rule shouldn’t be all or nothing. Currently, colleges are cut off completely if their default rates exceed 40 percent in a single year or 30 percent for three consecutive years. What about reviving proposals to impose lesser penalties at lower thresholds? A group of policy experts, student advocates, and current and former government officials convened by the Urban Institute has also considered options for beefing up accountability in the wake of the weakened CDR measurement. Among their suggestions: that the Education Department start some “targeted scrutiny” of institutions that have come close to failing — and introduce new measures based on students’ average earnings in the five years after leaving college. That convening, [summarized here]( also looked at how to strengthen the College Scorecard given the weakened CDR and absent repayment data. During this period, said Kristin Blagg, the Urban Institute senior research associate who got the group together, “we certainly don’t want to be flying blind.” At the very least, she said, the government could be doing more to promote to prospective students the data unaffected by the pause to prospective students. The WASC senior-college commission has been looking for new metrics in place of the CDR. The dream, said Jamienne S. Studley, its president, would be an independent assessment — universal, but not simplistic or narrow — showing if colleges were delivering what students came to get. I have a hard time imagining what that would look like. But I love the idea of exploring it further. And I’m hoping you’ll contribute your ideas. Can you think of any universal and meaningful measures of student outcomes that higher ed could or should be using to hold colleges accountable? Please [send me](mailto:goldie@chronicle.com) your thoughts, and I’ll share the cream of the crop in a future newsletter. Following the money. What’s driving colleges’ programs in continuing, professional, and online education? Money, apparently, according to [a survey released this week]( by Upcea and Modern Campus. Asked to identify the main drivers of business for their units, 90 percent of the survey respondents cited revenue generation, 76 percent said overall enrollment growth, and 73 percent said creating additional pathways to existing programs. The survey sample size is small — about 200 — but the findings are still illuminating. 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